Opinion
NO. CIV. S-02-0850 FCD GGH.
April 2, 2007
MEMORANDUM AND ORDER
This matter is before the court on the parties' supplemental briefing on defendants' motion for summary judgment pursuant to Federal Rule of Civil Procedure 56 on plaintiffs' due process claim. Due to the minimal attention directed to this issue in the original motion and opposition and the resulting oversight of the due process claim in the September 28, 2006 Memorandum and Order, (Docket # 102), at the status conference held January 19, 2007, the court asked the parties to submit supplemental briefing on this claim, not to exceed 10 pages. For the reasons set forth below, defendants' motion for summary judgment on plaintiffs' due process claim is GRANTED.
The court notes that in plaintiffs' supplemental briefing, the caption includes numerous defendants who are no longer in this litigation due to voluntary dismissals by plaintiffs or due to the court's prior rulings. The court also notes the this caption does not include defendant Zambrana. The remaining defendants in this case are Arthur Schubert, Greg A. Ziegler, Vincent Zambrana, Stephanie McCall, and Craig Burson. The court will consider plaintiffs' due process claim against these defendants only.
Any further references to a "Rule" or "Rules" are to the Federal Rules of Civil Procedure unless otherwise indicated.
The court's attention was first directed to its oversight in the joint pretrial statement, filed January 11, 2007. (Docket # 110).
Because oral argument will not be of material assistance, the court orders this matter submitted on the briefs. See E.D. Cal. L.R. 78-230(h).
The facts of this case are set out in the memorandum and order addressing defendants' original motion for summary judgment, and are thus not repeated herein. (See Docket # 102).
STANDARD
Summary judgment is appropriate when it is demonstrated that there exists no genuine issue as to any material fact, and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Adickes v. S.H. Kress Co., 398 U.S. 144, 157 (1970).
Under summary judgment practice, the moving party
always bears the initial responsibility of informing the district court of the basis of its motion, and identifying those portions of "the pleadings, depositions, answers to interrogatories, and admissions on file together with the affidavits, if any," which it believes demonstrate the absence of a genuine issue of material fact.Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). "[W]here the nonmoving party will bear the burden of proof at trial on a dispositive issue, a summary judgment motion may properly be made in reliance solely on the `pleadings, depositions, answers to interrogatories, and admissions on file.'" Id. at 324. Indeed, summary judgment should be entered against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial. Id. at 322.
If the moving party meets its initial responsibility, the burden then shifts to the opposing party to establish that a genuine issue as to any material fact actually does exist.Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 585-87 (1986); First Nat'l Bank v. Cities Serv. Co., 391 U.S. 253, 288-89 (1968). In attempting to establish the existence of this factual dispute, the opposing party may not rely upon the denials of its pleadings, but is required to tender evidence of specific facts in the form of affidavits, and/or admissible discovery material, in support of its contention that the dispute exists. Fed.R.Civ.P. 56(e). The opposing party must demonstrate that the fact in contention is material, i.e., a fact that might affect the outcome of the suit under the governing law, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986), and that the dispute is genuine, i.e., the evidence is such that a reasonable jury could return a verdict for the nonmoving party, Id. at 251-52.
In the endeavor to establish the existence of a factual dispute, the opposing party need not establish a material issue of fact conclusively in its favor. It is sufficient that "the claimed factual dispute be shown to require a jury or judge to resolve the parties' differing versions of the truth at trial."First Nat'l Bank, 391 U.S. at 289. Thus, the "purpose of summary judgment is to `pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial.'"Matsushita, 475 U.S. at 587 (quoting Rule 56(e) advisory committee's note on 1963 amendments).
In resolving the summary judgment motion, the court examines the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any. Rule 56(c); SEC v. Seaboard Corp., 677 F.2d 1301, 1305-06 (9th Cir. 1982). The evidence of the opposing party is to be believed, and all reasonable inferences that may be drawn from the facts placed before the court must be drawn in favor of the opposing party.Anderson, 477 U.S. at 255. Nevertheless, inferences are not drawn out of the air, and it is the opposing party's obligation to produce a factual predicate from which the inference may be drawn. Richards v. Nielsen Freight Lines, 602 F. Supp. 1224, 1244-45 (E.D. Cal. 1985), aff'd, 810 F.2d 898 (9th Cir. 1987).
ANALYSIS
I. Evidence
In support of the supplemental brief regarding their due process claim, plaintiffs submitted additional evidence that had not been previously submitted in opposition to defendants' motion for summary judgment. At the status conference, the court ordered the parties to file supplemental briefing. The court's order did not permit the parties to bring a new motion or new evidence before the court. The parties had an opportunity to present all of their evidence in support of their positions in the briefing and submissions on defendants' motion for summary judgment. The court's direction for supplemental briefing was not an invitation for plaintiffs to take a second bite at the apple in bringing new evidence to the court's attention that could have and should have been brought in the original briefing and submissions. As such, the court will not consider any new evidence filed in support of the supplemental briefing.
The parties were instructed that the briefing was not to exceed ten pages; plaintiffs failed to comply with the page limit requirement set by the court.
II. 42 U.S.C. § 1983
Plaintiffs brings a claim under 42 U.S.C. § 1983, alleging that defendants violated their due process rights by their unreasonable delay in returning property seized pursuant to a search warrant. The basis for plaintiffs' due process claim is set forth in the following allegations in the Second Amended Complaint:
Defendant government entities refused to return many of the items seized during the raids for an excessive amount of time after the seizure, depriving the plaintiffs of the ability to resume and effectively operate their business. Despite the fact that defendant Schubert personally assured plaintiffs that computers they used on a daily basis in their business would be returned the week following the seizure, the computers were in fact not returned for 1.5 months. Other items were not returned until over a year after the raid.
. . .
Plaintiffs have suffered loss to their business due to the continued seizure of their original financial documents.
Defendants informed plaintiffs of the existence of a sealed affidavit in support of the search warrant. Plaintiffs have moved to unseal the affidavit, to quash the search warrant and to have the seized property returned. Their motions have recently been granted and some of the seized property returned.
. . .
At the time the search warrant was executed, defendant Schubert told plaintiffs that their computer files, upon which they were dependent in order to continue running their business, would be returned to them within approximately one week. Defendant Schubert's failure to keep this promise, and his deliberate refusal to return items seized within a reasonable period of time, resulted in the destruction of plaintiffs' business without due process of law.
While the allegations of the complaint allege constitutional violations by defendant government entities, none of which remain viable defendants in this action, the court will broadly interpret the complaint to allege a claim against the individual defendants as well.
(Pls.' 2d Am. Compl. ¶¶ 22-24, 29).
The Fourteenth Amendment to the United States Constitution provides that no state shall "deprive any person of . . . property, without due process of law." The Due Process Clause confers both procedural and substantive rights. Armendariz v. Penman, 75 F.3d 1311, 1318 (9th Cir. 1996) (citations omitted). However, plaintiffs do not specify in their Second Amended Complaint, nor clarify in their briefing, whether they are asserting a procedural or substantive due process claim. As such, the court will address plaintiffs' potential claim under both theories.
A. Procedural Due Process
"The Fourteenth Amendment places procedural constraints on the actions of government that work a deprivation of interests enjoying the status of `property' within the meaning of the Due Process Clause." Memphis Light, Gas, and Water Div. v. Craft, 436 U.S. 1, 9 (1978). It is fundamental to the notion of procedural due process that "[p]arties whose rights are to be affected are entitled to be heard" and that this right to notice and an opportunity to be heard "must be granted at a meaningful time and in a meaningful manner." Fuentes v. Shevin, 407 U.S. 67, 79 (1972). Although plaintiffs concede that most of their property was eventually returned, "even a temporary, nonfinal deprivation of property is nonetheless a `deprivation' in the terms of the Fourteenth Amendment." Perkins v. City of West Covina, 113 F.3d 1004, 1010 (9th Cir. 1997), reversed on other grounds by 525 U.S. 234 (1999), reaffirmed by 167 F.3d 1286 (1999).
"Procedural due process generally requires a hearing prior to deprivation." Id. (citing Fuentes, 407 U.S. at 90-91). However, "a limited number of `extraordinary situations' justify postponing notice and the opportunity for a hearing until after the seizure of property," such as those circumstances where the seizure is "necessary to an important public interest, present[s] a special need for prompt action, and utilizes legitimate force which the government strictly controls." Id. (citing Fuentes, 407 U.S. at 90-91). Specifically, there is no requirement of a pre-deprivation hearing before the seizure of possessions under a search warrant. Id.; see Fuentes v. Shevin, 407 U.S. at 93 n. 30.
Defendants argue that plaintiffs' procedural due process claim must fail because California law affords adequate post-deprivation process. In Perkins v. City of West Covina, the plaintiffs asserted a claim against the city under § 1983 for an alleged violation of their procedural due process rights on the basis that the city failed to provide a reasonable procedure for the recovery of property seized pursuant to a search warrant. Id. The plaintiffs had remedies available to them, such as a "nonstatutory" motion for the release of property seized under a search warrant or a remedy pursuant to § 1540 of the California Penal Code. The California Supreme Court had previously found that "[t]hese various remedies satisfy the requirements of due process." Aday v. Superior Court, 55 Cal. 2d 789, 800 (1961) (discussing §§ 1539-1540 as remedies to secure the return of property seized pursuant to a warrant). Accordingly, the Ninth Circuit held that plaintiffs had adequate post-deprivation remedies for the return of their property. Perkins, 113 F.3d at 1011. However, the court held that plaintiffs should prevail on their procedural due process claim because they were not given explicit notice of the remedies available to them. Id. at 1011-14. On the city's appeal to the Supreme Court, the Court noted that the Ninth Circuit had found that "the postdeprivation remedies for return of property established by California statute and case law satisfied the requirements of due process." City of West Covina v. Perkins, 525 U.S. 234, 239 (1999). However, the Court reversed the Ninth Circuit's holding that individualized notice of these remedies was required. Id. at 241. On remand, the Ninth Circuit affirmed the district court's grant of summary judgment on the plaintiffs' procedural due process claim and reinstated its prior opinion in all other aspects, including its holding that post-deprivation remedies provided adequate due process for the return of property seized pursuant to a search warrant. Perkins v. City of West Covina, 167 F.3d 1286 (1999).
"Case law clearly establishes that both during and after the pendency of a criminal action, section 1536 empowers the court to entertain a summary proceeding by `nonstatutory' motion, for the release of property seized under a search warrant." People v. Icenogle, 164 Cal. App. 3d 620, 623 (1985) (citing People v. Superior Court, 28 Cal. App. 3d 600, 609 (1972); Buker v. Superior Court, 25 Cal. App. 3d 1085, 1089 (1972)).
Section 1540 of the California Penal Code provides:
If it appears that the property taken is not the same as that described in the warrant or that there is no probably cause for believing the existence of the grounds on which the warrant was issued, the magistrate must cause it to be restored to the person from whom it was taken.
In this case, defendants contend that in addition to § 1540, § 1538.5 of the California Penal Code provides an adequate post-deprivation remedy for the return of property. Section 1538.5 provides that "[a] defendant may move for the return of property . . . obtained as a result of a search or seizure" on the grounds that "[t]he search or seizure with a warrant was unreasonable." Plaintiffs thus had available to them post-deprivation procedures for the return of their property. Both the California Supreme Court and the Ninth Circuit have found that these procedures satisfy the requirements of due process. Perkins, 113 F.3d at 1011. Therefore, the court finds that plaintiffs have not stated a viable claim for violation of their procedural due process rights. As such, defendants' motion for summary judgment regarding plaintiffs' procedural due process claim is GRANTED.
Defendants also assert that California provides other common law remedies for persons who have been deprived of their property such as fraud, negligence, theft, conversion, and imposition of a constructive trust.
B. Substantive Due Process
The Fourteenth Amendment also confers substantive due process rights. See Foucha v. Louisiana, 504 U.S. 71, 80 (1992); United States v. Salerno, 481 U.S. 739, 746 (1987); Daniels v. Williams, 474 U.S. 327, 331 (1986).
However, the use of substantive due process to extend constitutional protection to economic and property rights has been largely discredited. See generally Gerald Gunther, Constitutional Law at 432-65. Rather, recent jurisprudence restricts the reach of the protections of substantive due process primarily to the liberties "deeply rooted in this Nation's history and tradition." Moore v. East Cleveland, 431 U.S. 494, 503 (1977).Armendariz, 75 F.3d at 1318-19. Further, "[w]here a particular Amendment `provides an explicit textual source of constitutional protection' against a particular source of government behavior, `that Amendment, not the more generalized notion of substantive due process' must be the guide for analyzing these claims."Albright v. Oliver, 520 U.S. 266, 273 (quoting Graham v. Connor, 490 U.S. 386, 395 (1989)).
Plaintiffs' § 1983 due process claim arises out of the allegation that defendants' deliberate refusal to return the seized items within a reasonable period of time resulted in the destruction of plaintiffs' business without due process of law. (Pls.' 2d. Am. Compl. ¶ 29). The unreasonable retention of seized property is the type of government conduct for which the Fourth Amendment provides explicit limitations. See United States v. Tamura, 694 F.2d 591, 597 (9th Cir. 1982) (holding that the "Government's unnecessary delay in returning the master volumes appears to be unreasonable and therefore unconstitutional manner of executing the warrant"); see also Fuller v. Vines, 36 F.3d 65, 68 (9th Cir. 1994), reversed on other grounds by 117 F.3d 1425 (1997) ("A seizure of property occurs, within the meaning of the Fourth Amendment, when there is some meaningful interference with an individual's possessory interests in that property.") (internal quotations omitted). The Supreme Court has affirmatively held that where the Fourth Amendment is the source of limitations on the type of conduct challenged by a plaintiff's claims, that Amendment, rather than the more general substantive due process protections guaranteed by the Fourteenth Amendment, must govern the plaintiff's claim. Albright, 520 U.S. at 273;Graham, 490 U.S. at 395; see Armendariz, 75 F.3d at 1321. As such, because the conduct plaintiffs allege is the type of government action that the Fourth Amendment regulates, their substantive due process claim is precluded. Therefore, defendants' motion for summary judgment regarding plaintiffs' substantive due process claim is GRANTED.
In Armendariz, the Ninth Circuit held that the plaintiff' substantive due process claim was precluded because it was regulated by the Fourth and Fifth Amendments. In a footnote, the court noted that permitting the plaintiffs leave to amend would not appear to prejudice the defendants. However, in this case, because a scheduling order is in place, leave to amend not only implicates Rule 15 and the inquiry regarding prejudice to defendants; rather, a modification to the pretrial scheduling order allowing plaintiffs leave to amend must first be analyzed under Rule 16's diligence inquiry. Plaintiffs alleged in their complaint, filed September 16, 2002, and argued during the course of this protracted litigation that defendants' unreasonable retention of property violated their substantive due process rights, not their Fourth Amendment rights. Since the inception of this litigation, plaintiffs were on notice that under Graham and its progeny, their substantive due process claim was precluded. While plaintiffs have not briefed this issue, in light of the circumstances of this litigation, it would be extremely difficult for the court to find that plaintiffs had been diligent in seeking to amend their complaint. As the court has previously noted in this case, the court's acknowledgment of counsel's failure to bring a claim does not constitute the requisite diligence to modify the Pretrial Scheduling Order under Rule 16. (See Mem. Order, Docket #109, filed Nov. 20, 2006, at 10).
CONCLUSION
For the foregoing reasons, defendants' motion for summary judgment regarding plaintiffs' due process claim is GRANTED.
Because defendants' motion for summary judgment regarding plaintiffs' due process claim is granted, the court does not address the issue of damages. In both the original and supplemental briefing, the parties addressed the issue of damages, and the potential limitation thereof, arising out of plaintiffs' due process claim. In the last paragraphs of their supplemental reply, defendants raise issues relating to damages arising out of plaintiffs' First Amendment claim. This issue has not been adequately raised or briefed in defendants' motion for summary judgment and plaintiffs have not been given adequate opportunity to respond. However, the court would entertain such argument if brought as a properly noticed motion in limine prior to trial in this matter.
IT IS SO ORDERED.