Opinion
Case No. 08-5098 SC, Related cases: 07-5800 SC, 07-6045 SC, 08-2052 SC, 08-2268 SC, 08-5096 SC, 09-1469 SC.
September 7, 2010
ORDER GRANTING MOTION TO DISMISS
I. INTRODUCTION
On January 19, 2010, Defendants Captain Peter McIsaac ("McIsaac") and Captain Russell Nyborg ("Nyborg") (collectively, "Moving Defendants") filed a Motion to Dismiss. ECF No. 45 ("Mot."). The Motion includes a request for attorney fees. Id. at 6. Plaintiffs Regal Stone Limited ("Regal Stone") and Fleet Management, Ltd., ("Fleet") (collectively, "Plaintiffs") filed an Opposition, and the Moving Defendants submitted a Reply. ECF Nos. 50 ("Opp'n"), 52 ("Reply"). Pursuant to Civil Local Rule 7-1(b), the Court decides the Motion without oral argument. For the following reasons, the Motion to Dismiss is GRANTED, and the request for attorney fees is DENIED.
II. BACKGROUND
This action stems from the allision of the cargo ship M/V COSCO BUSAN with the San Francisco-Oakland Bay Bridge on November 7, 2007. First Amended Compl. ("FAC"), ECF No. 35, ¶ 17. As a result of the allision, approximately 53,000 gallons of bunker fuel spilled into the San Francisco Bay. Id. At the time of the allision on November 7, 2007, Defendant John J. Cota ("Cota") was piloting the cargo ship. Id. ¶ 19.
The term "allision" is used in maritime cases to describe an accident involving a moving vessel and a stationary object or vessel. Hochstetler v. Bd. of Pilot Comm'rs for the Bays of San Francisco, San Pablo and Suisun, 6 Cal. App. 4th 1659, 1661 n. 1 (Ct. App. 1992).
As explained below, the M/V COSCO BUSAN was required to have a pilot on board, the Board of Pilot Commissioners ("the Pilot Commission" or "the Board") licenses pilots, and a Port Agent supervises the pilots. McIsaac is the current Port Agent, and Nyborg is his immediate predecessor. Mot. at 2 n. 3. Plaintiffs allege that "McIsaac has been the Port Agent and the Chief Executive of the BPA [Bar Pilot's Association] since November 2006," and that Nyborg was the Port Agent and Chief Executive "at various times between 1998 and present." Id. ¶¶ 6-7.
Moving Defendants point out that the reference to their co-defendants as "The San Francisco Bar Pilot's Association" is an error, and that they should be referred to as the "San Francisco Bar Pilots." Reply at 1 n. 1. Unless quoting from Plaintiffs' pleadings, the Court will refer to the San Francisco Bar Pilots as "the Bar Pilots."
Plaintiffs accuse Nyborg of failing to report to the Board that Cota had been convicted of driving under the influence in 1999.Id. ¶ 24. Plaintiffs allege Nyborg also failed to report that the U.S. Coast Guard suspended Cota's federal piloting license from November 1999 to January 2000. Id.
Plaintiffs allege Nyborg and McIsaac knew or should have known that "Defendant Cota was not medically fit to serve as a marine pilot but [they] nonetheless failed to take the required action to remove Cota from rotation and/or initiate procedures to have Cota disqualified." Id. ¶ 25. Plaintiffs accuse McIsaac and Nyborg, along with the Bar Pilots, of having "unlawfully enabled, aided and abetted Cota to continue to serve as a pilot." Id. ¶¶ 25-26.
Plaintiffs allege that McIsaac, in his capacity as Port Agent, should have closed the bar and prevented vessel traffic on the day of the allision because it was extraordinarily foggy that day. Id. ¶ 27. "By law, it is the responsibility of the Port Agent to close the bar . . . when prevailing conditions threatened public, vessel, or pilot safety." Id. "In sum, had Defendants properly discharged their statutory and common law responsibilities to disqualify and/or prevent Cota from acting as a pilot and to close the bar on the morning of November 7, 2007, no damage to the vessel, the Bay Bridge or the environment would have occurred." Id. ¶ 28.
Count II of Plaintiffs' FAC asserts a claim of negligence against the Bar Pilots and McIsaac based on McIsaac's failure to close the bar on November 7, 2007. Id. ¶¶ 111-115. Count III accuses the Bar Pilots, McIsaac, and Nyborg of "negligent failure to prevent Cota from piloting" by failing to disclose to the Board Cota's medical condition and the DUI incident. Id. ¶¶ 116-122. Count IV alleges that the Bar Pilots and McIsaac negligently assigned Cota to pilot the M/V COSCO BUSAN on November 7, 2007, because at that time they knew of his prior incidents and his medical condition. Id. ¶¶ 123-129. Count V alleges that the Bar Pilots and McIsaac negligently failed to maintain adequate procedures for determining and monitoring the medical competence of pilots. Id. ¶¶ 130-136. Count XI accuses the Bar Pilots, McIsaac and Nyborg of willful misconduct in that they disregarded that Cota's continued service could result in an accident. Id. ¶¶ 176-78. Plaintiffs seek money damages as indemnity or contribution from Cota, the Bar Pilots, and the Moving Defendants.
McIsaac and Nyborg move to dismiss the claims against them, pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure, based on the Eleventh Amendment of the United States Constitution, and they seek an award of their attorney fees under section 1198 of the California Harbors and Navigation Code. Mot. at 1.
III. LEGAL STANDARD
When a defendant submits a motion to dismiss under Federal Rule of Civil Procedure 12(b)(1), the plaintiff bears the burden of establishing the propriety of the court's jurisdiction. See Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). As a court of limited jurisdiction, "[a] federal court is presumed to lack jurisdiction in a particular case unless the contrary affirmatively appears." Stock West, Inc. v. Confederated Tribes, 873 F.2d 1221, 1225 (9th Cir. 1989). A Rule 12(b)(1) jurisdictional attack may be facial or factual. White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000) (citation omitted). In a facial attack, the defendant challenges the basis of jurisdiction as alleged in the complaint. Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). In such a case, the court assumes the truth of the factual allegations, and draws all reasonable inferences in the plaintiff's favor. Wolfe v. Strankman, 392 F.3d 358, 362 (9th Cir. 2004).
A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) "tests the legal sufficiency of a claim." Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). Dismissal can be based on the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory.Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). Allegations of material fact are taken as true and construed in the light most favorable to the nonmoving party.Cahill v. Liberty Mutual Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). A motion to dismiss should be granted if the plaintiff fails to proffer "enough facts to . . . nudge[] their claims across the line from conceivable to plausible." Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1974 (2007).
IV. DISCUSSION
A. Eleventh Amendment Immunity
McIsaac and Nyborg contend the Court has no jurisdiction over the claims asserted against them because they have sovereign immunity under the Eleventh Amendment of the United States Constitution. Mot. at 2-3. The Eleventh Amendment provides that "[t]he Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State." U.S. Const. amend. XI. "The ultimate guarantee of the Eleventh Amendment is that nonconsenting States may not be sued by private individuals in federal court." Bd. of Trs. of Univ. of Ala. v. Garrett, 531 U.S. 356, 363 (2001). The Eleventh Amendment "bars suits in admiralty against the States, even though such suits are not, strictly speaking, `suits in law or equity.'" Welch v. Texas Dept. of Highways and Public Transp., 483 U.S. 468, 473 (1987).
"[T]he reference to actions `against one of the United States' encompasses not only actions in which a State is actually named as the defendant, but also certain actions against state agents and state instrumentalities." Regents of the Univ. of Cal. v. Doe, 519 U.S. 425, 429 (1997). The decision to extend sovereign immunity to a public entity turns on whether the entity "is to be treated as an arm of the State partaking of the State's Eleventh Amendment immunity, or is instead to be treated as a municipal corporation or other political subdivision to which the Eleventh Amendment does not extend." Mt. Healthy City Sch. Dist. Bd. of Educ. v. Doyle, 429 U.S. 274, 280 (1977).
Courts in the Ninth Circuit employ a five-factor test to determine whether an entity is an arm of the state:
[1] whether a money judgment would be satisfied out of state funds, [2] whether the entity performs central governmental functions, [3] whether the entity may sue or be sued, [4] whether the entity has the power to take property in its own name or only the name of the state, and [5] the corporate status of the entity.Belanger v. Madera Unified Sch. Dist., 963 F.2d 248, 250-51 (9th Cir. 1992) (quoting Mitchell v. Los Angeles Community Coll. Dist., 861 F.2d 198, 201 (9th Cir. 1988)) (hereinafter the "Mitchell test" or "Mitchell factors"). Courts "must examine these factors in light of the way California law treats the governmental agency." Belanger, 963 F.2d at 251.
B. California's Statutory Scheme
The California Legislature has enacted a statutory scheme to govern pilots for and pilotage of the San Francisco, San Pablo, and Suisun Bays ("the Bays"). Cal. Harb. Nav. Code §§ 1100- 1203. In order to ensure the safety of persons, vessels, and property using the Bays and their tributaries, and to avoid damage to these waters and their surrounding ecosystems, pilotage is mandatory for the classes of vessels that are required by statute to secure pilotage services. Id. § 1100.
1. The Board of Pilot Commissioners
The Board licenses and regulates the pilots. Id. §§ 1150, 1154, 1172. Although originally an independent state agency, the Board became a department of the Business, Transportation and Housing Agency on January 1, 2009. See Pls.' Req. for Judicial Notice ("RJN"), Docket No. 51-3, Ex. C ("Overview"). The current version of the statute states: "There is in the Business, Transportation and Housing Agency a Board of Pilot Commissioners for the Bays of San Francisco, San Pablo, and Suisun, consisting of seven members appointed by the Governor, with the consent of the Senate. . . ." Cal. Harb. Nav. Code § 1150(a).
Plaintiffs request the Court to take judicial notice of a document that can be found on the website of the Board entitled "Pilot Commision — Overview." The Court can take judicial notice of facts not subject to reasonable dispute. Fed.R.Evid. 201(b). Although the Court does not need to take judicial notice of this document in its entirety, the Court takes judicial notice of the fact that the Board became a department of the Business, Transportation and Housing Agency on January 1, 2009.
The version of the statute that was in effect from January 1, 2005 to December 21, 2008, stated: "There is in the state government a Board of Pilot Commissioners for the Bays of San Francisco, San Pablo, and Suisun, consisting of seven members appointed by the Governor, with the consent of the Senate. . . ."Id. (amended 2009).
2. The Port Agent
Section 1130 of the Code sets out how a Port Agent is appointed and his or her duties:
A majority of all of the pilots licensed by the board shall appoint one pilot to act as port agent to carry out the orders of the board and other applicable laws, and to otherwise administer the affairs of the pilots. The appointment is subject to the confirmation of the board.Id. § 1130(a); Cal. Code Regs. tit. 7, § 218(a). "The port agent shall be responsible for the general supervision and management of all matters related to the business and official duties of pilots licensed by the board." Cal. Harb. Nav. Code § 1130(b); Cal. Code Regs. tit. 7, § 218(b).
The port agent shall immediately notify the executive director of the board of a suspected violation, navigational incident, misconduct, or other rules violation that is reported to him or her or to which he or she is a witness. The board shall adopt regulations for the manner and content of a notice provided pursuant to this section.
Cal. Harb. Nav. Code § 1130(c).
The California Code of Regulations provides more information concerning the duties of the Port Agent. The Port Agent assigns pilots to vessels. Cal. Code Regs. tit. 7, § 218(c)(1). The Port Agent shall:
(2) Prepare and administer the pilots' vacation schedule.
(3) Represent pilots before the Board and its committees.
(4) Collect data, prepare accounts, and make the payments to the Board required of pilots by the Code and these regulations. . . .
(5) Identify each boat used by the pilots and notify the Board of the names of the pilots responsible for the management of each such boat.
(6) Report to the Board all accidents, groundings, collisions or similar navigational incidents involving vessels to which a pilot has been assigned.
(7) Report to the Board any matter which, in his or her opinion, affects the ability of a pilot to carry out his or her lawful duties.
(8) Ensure that at all times adequate pilots are available. . . .
(9) Order the Bar closed for reasons of public, pilot, or vessel safety.Id. § 218(c)(2)-(9). "In carrying out his or her duties, the Port Agent shall be primarily guided by the need for safety of persons, property, vessels and the marine environment." Id. § 218(d). The Port Agent must also report pilot absences to the Board. Id. § 218(f). The Port Agent has the authority to direct pilots to undergo timely drug and alcohol testing, and the Port Agent "shall expeditiously inform the U.S. Coast Guard and the Board, orally and in writing, of his or her determination and the basis therefor." Id. § 218(h).
C. Plaintiffs' Allegations Concern McIsaac's and Nyborg's Actions or Omissions as Officers or Agents of the Board
Under the Eleventh Amendment, "a state official is immune from suit in federal court for actions taken in an official capacity."California v. Deep Sea Research, Inc., 523 U.S. 491, 502 (1998). Moving Defendants contend that they are state officials immune from suit. Mot. at 3. Plaintiffs respond that there are fundamental factual questions concerning the relationship of the Moving Defendants to the Bar Pilots and the Board that cannot be resolved until after the parties have an opportunity to engage in discovery. Opp'n at 2-3. Plaintiffs focus on the Moving Defendants' role as Bar Pilots or Chief Executives of the Bar Pilots. Id. at 6. Plaintiffs suggest Port Agents function as "liaisons" between the Bar Pilots and the Board. Id. at 6. Plaintiffs contend that McIsaac and Nyborg were Port Agents of the Bar Pilots, not Port Agents of the Board. Id. at 7 n. 5.
The relevant statutes and regulations do not support Plaintiffs' contentions. Title 7, Division 2 of California's Code of Regulations deals with the Board, and the definition and duties of the Port Agent are contained within, and explained within, this division. See Cal. Code Regs. tit. 7, §§ 202, 218. As the regulations creating the office of Port Agent are found within this division, the Court finds that Port Agent is an agent or officer of the Board.
However, it is also clear that the Port Agent sometimes acts on behalf of the Bar Pilots, and sometimes on behalf of the Board. Although confirmed by the Board, the Port Agent is selected by a majority of the pilots. Id. § 218(a). The Port Agent "[r]epresents pilots before the Board and its committees."Id. § 218(3). When doing so, the Port Agent is acting on behalf of the pilots. See Overview at 5 ("the Port Agent . . . is selected by the pilots to represent them at the Board."). It is not inaccurate, therefore, for Plaintiffs to describe the Port Agent as a liaison between the Bar Pilots and the Board.
However, Plaintiffs' allegations against McIsaac and Nyborg focus on conduct performed on behalf of the Board, not on behalf of the Bar Pilots. Plaintiffs allege that McIsaac should not have assigned Cota to pilot the M/V COSCO BUSAN, that Nyborg failed to report information concerning Cota, that McIsaac and Nyborg knew Cota was medically unfit to serve as a pilot but failed to report him, and that McIsaac should have closed the bar on November 7, 2007. FAC ¶¶ 23-28. These allegations correspond precisely to the Port Agent's regulatory duties. See Cal. Code Regs. tit. 7, § 218(c) ("The Port Agent shall. . . . [a]ssign Pilots to Vessels. . . . [r]eport to the Board any matter which, in his or her opinion, affects the ability of a pilot to carry out his or her lawful duties . . . [and] [o]rder the Bar closed for reasons of public, pilot, or vessel safety."). Plaintiffs' FAC explicitly states that "[a]t all times alleged herein, Defendants McIsaac and Nyborg were acting within the course and scope of their capacities as Port Agents, as defined by Title 7, California Code of Regulations section 218, and therefore were acting as agents of the California Board of Pilot Commissioners." FAC ¶ 11. Plaintiffs essentially argue that McIsaac and Nyborg were negligent in their supervision of Cota, and in this supervisory role, McIsaac and Nyborg were acting on behalf of the Board. There is no need for discovery regarding this issue. The Court finds, as a matter of law, that McIsaac and Nyborg were acting as officers or agents of the Board when they engaged in the conduct complained of in Plaintiffs' FAC.
Furthermore, Regal Stone has argued in a related case that McIsaac and Nyborg were acting on behalf of the Board when engaged in the acts or omissions complained of here. In State of California v. Regal Stone et al., Case No. 08-2268, Regal Stone filed a Counterclaim alleging that the Port Agent "is a dual agent, who acts on behalf of the pilots and the Board, depending on the circumstances," alleging that the Port Agent was negligent in carrying out its duties by failing to report matters to the Board and by failing to close the bar, and alleging that the Board "is liable for the negligence of the Port Agent when he acts on behalf of the Board." See Defs.' RJN, ECF No. 53, Ex. 1 ("Regal Stone Countercl.") ¶¶ 26, 68-71. Regal Stone is one of the Plaintiffs in this case. Regal Stone's own allegations in this related case confirms the Court's determination that McIsaac and Nyborg were acting as officers or agents of the Board when they assigned Cota to pilot the M/V COSCO BUSAN, when they failed to report information concerning Cota's past conduct and medical condition, and when McIsaac failed to close the bar on November 7, 2007.
The Court can take judicial notice of Regal Stone's allegations in State of California v. Regal Stone et al., Case No. 08-2268, a related case that is also before this Court. It is not subject to reasonable dispute that Regal Stone made these allegations.
D. The Board is Immune from Suit
Having determined that McIsaac and Nyborg were acting on behalf of the Board, the next question is whether the Board can be considered an arm of the state immune from suit in federal court. Plaintiffs do not dispute that the Board is an agency of the state. Opp'n at 7. Instead, they contend the Board is not a state agency immune from suit under the Eleventh Amendment. Id. The Court disagrees with Plaintiffs. The Mitchell test establishes that the Board is immune from suit.
1. Money Judgment Satisfied out of State Funds
The first prong of the Mitchell test — whether a money judgment against the agency would be satisfied out of State funds — is the "predominant factor." Belanger, 963 F.2d at 251. Plaintiffs contend that a money judgment against the Board would not be satisfied out of state funds because the Pilot Commission Overview states that the Board's expenses "are paid for by industry surcharges on pilotage fees and not by state or local taxes." Overview at 1.
However, the relevant statute provides that:
All moneys received by the board pursuant to the provisions of any law shall be accounted for at the close of each month to the Controller in the form that the Controller may prescribe and, at the same time on the order of the Controller, all these moneys shall be paid into the State Treasury to the credit of the Board of Pilot Commissioners' Special Fund.
Cal. Harb. Nav. Code § 1159(a). The State Controller appropriates money from this fund in the State Treasury for the payment of the compensation and expenses of the Board and its officers and employees. Id. § 1159(b). These statutes imply that any judgment against the Board would be paid from state funds.See Cal. Gov't Code § 900.6 ("`State' means . . . any . . . board, commission or agency of the State claims against which are paid by warrants drawn by the Controller."), § 965.2(a) ("The Controller shall draw a warrant for the payment of any final judgment . . . against the state. . . .").
The mere fact that a state agency collects fees does not bar it from Eleventh Amendment immunity. See Regents of the Univ. of Cal. v. Doe, 519 U.S. 425, 431 (1997) (treating state university as arm of the state immune from suit even though university collects fees); Lupert v. California State Bar, 761 F.2d 1325, 1327 (9th Cir. 1985) (treating Board of Governors and Committee of Bar Examiners of the State Bar of California as immune from suit even though State Bar collects fees). The first, and predominant, Mitchell test factor weighs in favor of finding the Board immune from suit.
2. Central Governmental Functions
Plaintiffs contend the Board does not perform central governmental functions because it provides service for one isolated geographic area of the State, and because at the time of the incident, "it was not part of any governmental department." Opp'n at 9. While it is true that the Board became a department of the Business, Transportation and Housing Agency on January 1, 2009, see Cal. Harb. Nav. Code § 1150(a), it does not follow that the Board was not performing central governmental functions before that date. The Board "was created by [the] first legislative session of the new state of California in 1850 and has been serving continuously ever since." Overview at 1. While the Board's area of coverage does not extend to the whole state, it is the only state pilot commission in California. Id. at 2. Pilots outside the Board's area of coverage operate under the authority of their federal pilot's license. Id. at 2.
California's statutory scheme shows that the Board performs central governmental functions. The California Legislature "finds and declares that it is the policy of the state to ensure the safety of persons, vessels, and property using Monterey Bay and the Bays of San Francisco, San Pablo, and Suisun, and the tributaries thereof . . . by providing competent, efficient, and regulated pilotage for vessels required by this division to secure pilotage services." Cal. Harb. Nav. Code § 1100. The Legislature further finds that "[a] program of pilot regulation and licensing is necessary in order to ascertain and guarantee the qualifications, fitness, and reliability of qualified personnel who can provide safe pilotage of vessels entering and using Monterey Bay and the Bays of San Francisco, San Pablo, and Suisun." Id. § 1101(e). "Bar pilotage in the Bays of San Francisco, San Pablo, and Suisun has continuously been regulated by a single-purpose state board since 1850, and that regulation and licensing should be continued." Id. § 1101(g). Regulating and licensing the Bar Pilots to ensure the safety of person, vessels, and property are central governmental functions. The second Mitchell test factor weighs in favor of finding the Board immune from suit.
3. Other Mitchell Test Factors
Plaintiffs correctly point out that the Board can sue and be sued. See, e.g., Hochstetler, 6 Cal. App. 4th at 1663 (pilot filed petition for writ of mandate in state court seeking to overturn Board's suspension of his state pilot license). However, the Ninth Circuit has found state agencies immune from suit even though they could sue or be sued. In Belanger, the Ninth Circuit noted that the third Mitchell factor "is entitled to less weight than the first two factors," and found California school districts immune even though they can sue or be sued. 963 F.2d at 254.
With regard to the final two factors, Plaintiffs do not contend that the Board can own property in its own name, see Opp'n at 9, and Moving Defendants point out that the Board does not have independent corporate status. Reply at 11. Only the third factor weighs against a finding of immunity, and therefore the Court finds that the Board is a state agency immune from suit under the Eleventh Amendment. As Plaintiffs' FAC focuses on the Moving Defendants' conduct when acting on behalf of the Board, the Court concludes that the Moving Defendants are immune from suit under the Eleventh Amendment and should be dismissed from this case.
E. Attorney Fees
Moving Defendants request that they be awarded fees and costs. Mot. at 6. Moving Defendants rely on Section 1198(c)(1)(D) of the Harbors and Navigation Code, which provides that "[a] pilot who is the prevailing party shall be awarded attorney's fees and costs incurred in any action to enforce a right to indemnification provided pursuant to this subdivision." Cal Harb. Nav. Code § 1198(c)(1)(D).
Here, the Court has dismissed the Moving Defendants because the allegations against them focus upon actions that they took, or failed to take, as agents or officers of the Board. See Part IV.C, supra. While pilots can enforce a right to indemnification pursuant to Section 1198(c), there is nothing in the statutory language to indicate that Port Agents can do so when acting on behalf of the Board. Accordingly, the Court DENIES the Moving Defendants' Section 1198 request for attorney fees.
V. CONCLUSION
For the foregoing reasons, the Court GRANTS the Motion to Dismiss filed by Defendants Captain Peter McIsaac and Captain Russell Nyborg, who are hereby DISMISSED from this case WITH PREJUDICE. The Court DENIES their request for attorney fees.
IT IS SO ORDERED.
Dated: September 7, 2010