Hanford Exec. Mgmt. Emp. v. City of Hanford

HANFORD EXECUTIVE MANAGEMENT EMPLOYEEASSOCIATION, et al., Plaintiffs,

v.CITY OF HANFORD, et al., Defendants.

1:11-CV-00828 AWI DLB

Do. #12

Do. #16

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA

Dated: November 17, 2011

ORDER GRANTING IN PART

AND DENYING IN PART

DEFENDANTS' MOTION TO

DISMISS AND ORDER

DENYING PLAINTIFFS'

MOTION FOR PRELIMINARY

INJUNCTION

INTRODUCTION

Plaintiffs are Executive Management Employees of the City of Hanford. This case arises out of the Hanford City Council voting to make various changes to Plaintiffs' employment pursuant to a proposal submitted by City Manager Hilary Straus. Plaintiffs initiated the present action against the City of Hanford, Straus and the individual members of the Hanford City Council (collectively "Defendants"). In their Complaint, Plaintiffs assert numerous violations of their constitutional rights under the United States and California Constitutions and bring several other state law claims.

Currently before the Court is Defendants' motion to dismiss pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure and Plaintiffs' motion for preliminary injunction. For the reasons that follow Defendants' motion to dismiss is granted in part and denied in part and Plaintiffs' motion for preliminary injunction is denied.

LEGAL STANDARD

A. Rule 12(b)(1) Motion to Dismiss

Rule 12(b)(1) of the Federal Rules of Civil Procedure allows a motion to dismiss for lack of subject matter jurisdiction. "It is a fundamental precept that federal courts are courts of limited jurisdiction. The limits upon federal jurisdiction, whether imposed by the Constitution or by Congress, must not be disregarded nor evaded." Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 374 (1978). A challenge to jurisdiction "can be either facial, confining the inquiry to allegations in the complaint, or factual, permitting the court to look beyond the complaint." Savage v. Glendale Union High Sch., Dist. No. 205, Maricopa Cnty., 343 F.3d 1036, 1039 n.2 (9th Cir. 2003). Thus, the Court is not restricted to the face of the pleadings and "may review any evidence, such as affidavits and testimony, to resolve factual disputes concerning the existence of jurisdiction." McCarthy v. United States, 850 F.2d 558, 560 (9th Cir. 1988) (citation omitted). Furthermore, when subject matter jurisdiction is challenged under Rule 12(b)(1), the plaintiff has the burden of proving jurisdiction in order to survive the motion. Stock West, Inc. v. Confederated Tribes, 873 F.2d 1221, 1225 (9th Cir. 1989).

B. Rule 12(b)(6) Motion to Dismiss

Under Federal Rule of Civil Procedure 12(b)(6), a claim may be dismissed because of the plaintiff's "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). A dismissal under Rule 12(b)(6) may be based on the lack of a cognizable legal theory or on the absence of sufficient facts alleged under a cognizable legal theory. Johnson v. Riverside Healthcare Sys., 534 F.3d 1116, 1121 (9th Cir. 2008); Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). In reviewing a complaint under Rule 12(b)(6), all allegations of material fact aretaken as true and construed in the light most favorable to the non-moving party. Marceau v. Blackfeet Hous. Auth., 540 F.3d 916, 919 (9th Cir. 2008); Vignolo v. Miller, 120 F.3d 1075, 1077 (9th Cir. 1999). The Court is not required "to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1056-57 (9th Cir. 2008); Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). As the Supreme Court has explained:

While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the 'grounds' of his 'entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).

To avoid a Rule 12(b)(6) dismissal, "a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face[.]" Telesaurus VPC, LLC v. Power, 623 F.3d 998, 1003 (9th Cir. 2010) (citations omitted). "In sum, for a complaint to survive a motion to dismiss, the non-conclusory 'factual content,' and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief." Moss v. United States Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009).

If a Rule 12(b)(6) motion to dismiss is granted, "[the] district court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts." Doe v. United States, 58 F.3d 494, 497 (9th Cir. 1995). In other words, leave to amend need not be granted when amendment would be futile. Gompper v. VISX, Inc., 298 F.3d 893, 898 (9th Cir. 2002).

C. Preliminary Injunction

A plaintiff seeking a preliminary injunction must establish: (1) that he is likely to succeed on the merits, (2) that he is likely to suffer irreparable harm in the absence of preliminary relief, (3) that the balance of equities tips in his favor, and (4) that an injunction is in the public interest.Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 22 (2008).

The Ninth Circuit has also concluded that a preliminary injunction may be granted if there are serious questions going to the merits and a balance of hardships that tips sharply towards the plaintiff, so long as the plaintiff also shows that there is a likelihood of irreparable injury and that the injunction is in the public interest. Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1135 (9th Cir. 2011).

ALLEGED FACTS

Plaintiffs Cathy Cain ("Cain"), Louis Camara ("Camara"), George Thomas Dibble ("Dibble"), Timothy Ieronimo ("Ieronimo"), Mary Rose Lindsay ("Lindsay"), Carlos Mestas ("Mestas") and Scott Yeager ("Yeager") are Executive Management Employees of the City of Hanford and are members of the Hanford Executive Management Employee Association ("EMEA"). Complaint at ¶¶ 1-8. EMEA is the exclusive recognized employee organization representing the City of Hanford bargaining unit, which consists of all seven non-exempt Executive Management Employees. Id. at ¶ 1.

On or about November 16, 2010, Camara, Dibble, Ieronimo, Lindsay, Mestas and Yeager signed a memorandum directed to the Hanford City Council and incoming City Council members, entitled, "Vote of No Confidence - City Manager Hilary Straus." Id. at ¶ 18. The Hanford City Council consists of Defendants Dan Chin ("Chin"), Sue Sorensen ("Sorensen"), Jim Irwin ("Irwin"), Lou Martinez ("Martinez") and Joleen Jameson ("Jameson"). Id. at ¶¶ 11-15. Plaintiffs' three-page memorandum set forth the reasons why each of the signatories had no confidence in the ability of Straus to properly perform the duties of Hanford City Manager. Id. at ¶ 18. Some of the stated reasons included allegations of dishonest, unethical and potentially illegal conduct, hiding information from management and the public, improperly awarding contracts to Straus' friends, potential Brown Act violations, and other unprofessional conduct. Id.

On March 10, 2011, Straus met with EMEA representatives. Id. at ¶ 23. It was not untilMarch 10, 2011 that Plaintiffs discovered that Straus had submitted a proposal for the March 15, 2011 Hanford City Council meeting that would make substantial changes to Plaintiffs' employment. Id. The proposed changes included:

a. Converting Executive Management Employees from permanent employees with property rights in their employment to at-will employees;

b. Revising the Seniority, Layoff and Bumping provisions to strip Executive Management Employees of the right to return to previously held positions and reemployment rights in the event of a layoff;

c. Stripping disciplinary appeal rights from Executive Management Employees;

d. Changing the process by which Executive Management Employees progress through salary steps and creating a right to deny what were previously automatic step increases on the grounds of "average" performance; and

e. Increasing Executive Management Employees' contributions toward retirement, and decreasing the City of Hanford's contributions toward retirement for Executive Management Employees, including the individual Plaintiffs herein, which also had the impact of decreasing their salaries for purposes of retirement benefit calculations.

Id. The proposed changes differed from the rules and regulations set forth in the applicable Personnel Rules and Regulations, including the Policy of Administration for Executive Management that was in effect prior to March 15, 2011. Id. at ¶ 24.

On or about March 11, 2011, all seven individual Plaintiffs signed and submitted a Petition for Recognition and Certification petitioning the Hanford City Council for formal recognition of EMEA as the bargaining unit for the individual Plaintiffs. Id. at ¶ 19. On March 15, 2011, prior to the Hanford City Council meeting, the EMEA wrote to the City Council and addressed the chief concerns of EMEA and its members. Id. at ¶ 25. The letter warned that passing the proposal by Straus could expose the City of Hanford to liability and could also expose the individual City Council members and Straus to personal liability. Id.

On the evening of March 15, 2011, the Hanford City Council met to discuss Straus' proposal. Id. at ¶ 26. Numerous individuals, including EMEA's counsel, spoke against the proposal, and highlighted the illegal nature of many of the components of the proposal. Id. TheHanford City Council unanimously ratified the proposal. Id.

On March 22, 2011,...