LAWRENCE J. O'NEILL, District Judge.
Plaintiffs Naiel Ammari ("Mr. Ammari") and Turlock RV Center, Inc., dba Best RV ("Best RV"), seek to collaterally estop relitigation of issues pertaining to an underlying state court ruling that a search warrant executed on Best RV lacked sufficient probable cause. Defendants Eugene Brathwaite ("Mr. Brathwaite") and Sylvia Thomas (Ms. Thomas") respond that Mr. Ammari and Best RV (collectively "plaintiffs") fail to establish that collateral estoppel applies to plaintiffs' unlawful search and seizure claims. This Court considered on the record plaintiffs' motion to apply collateral estoppel and VACATES the July 10, 2012 hearing, pursuant to Local Rule 230(g). For the reasons discussed above, this Court DENIES to apply collateral estoppel to the state court ruling on probable cause.
Mr. Brathwaite is a California Department of Motor Vehicles ("DMV") investigator and submitted an affidavit for a search warrant for Best RV, plaintiffs' recreational vehicle ("RV") dealership in Turlock. After execution of the search warrant, plaintiffs successfully challenged the search warrant's lack of probable cause in a state court proceeding. Plaintiffs ask this Court to apply via collateral estoppel the underlying state court ruling to support plaintiffs' unlawful search and seizure claims in this action.
RV dealers, including plaintiffs, charge a pre-delivery inspection fee after receipt of a new RV to cover preparation and safety measures. In late 2009, Mr. Brathwaite investigated complaints against Best RV. Mr. Brathwaite prepared a July 8, 2010 Statement of Probable Cause ("affidavit") to request "a complete search of Best RV Centers [sic] business and computers records from February 1, 2009 through July 7, 2012, as a means to support the unlawful assessment of fees" in that:
Stanislaus County Superior Court Judge Timothy Salter ("Judge Salter") signed a July 8, 2010 search warrant for Best RV's business and computer records. On July 13, 2010, Mr. Brathwaite and other DMV agents executed the search warrant and removed Best RV customer files, business records and computer hardware and software.
On September 17, 2010, plaintiffs filed an underlying Stanislaus Superior Court action ("state action") against DMV and Mr. Brathwaite to seek return of the seized property pursuant to Penal Code section 1540 ("section 1540") ("If it appears ... that there is no probable cause for believing the existence of the grounds on which the warrant was issued, the magistrate must cause it [property] to be restored to the person from whom it was taken.") Judge Salter conducted a hearing on October 21, 2010 and November 3, 2010 to address probable cause to issue the search warrant for Best RV. Mr. Brathwaite and DMV appeared at the hearing through a Deputy District Attorney John B. Goulart ("DA Goulart"), and the parties presented testimony, exhibits and argument.
Judge Salter issued a January 31, 2011 order ("January 31 order") that the affidavit omitted key information, including:
Judge Salter granted plaintiffs' section 1540 motion to restore the seized property and concluded:
Plaintiffs proceed on their First Amended Complaint ("FAC") against Mr. Brathwaite and Ms. Thomas (collectively "defendants") to allege a single 42 U.S.C. § 1983 ("section 1983") claim that defendants "fraudulently obtained a search warrant for Plaintiffs' business based on falsified evidence of probable cause" in "direct violation of the Fourth Amendment."
Based on the January 31 order, plaintiffs seek to invoke collateral estoppel to preclude relitigation of the affidavit's lack of probable cause.
Collateral estoppel or issue preclusion "is a plea available to prevailing parties. The doctrine bars relitigation of determinations necessary to the ultimate outcome of a prior proceeding." Bobby v. Bies, 556 U.S. 825, 829, 129 S.Ct. 2145 (2009). "Collateral estoppel precludes relitigation of issues argued in prior proceedings." Lucido v. Superior Court, 51 Cal.3d 335, 341, 272 Cal.Rptr. 767, 769 (1990), cert. denied, 500 U.S. 920, 111 S.Ct. 2021 (1990). The "party against whom estoppel is asserted has litigated and lost in an earlier action." Parklane Hosiery Co., Inc. v. Shore, 439 U.S. 322, 329, 99 S.Ct. 645 (1979).
"Issue preclusion ... forecloses litigation only of those issues of fact or law that were actually litigated and necessarily decided by a valid and final judgment between the parties, whether on the same or a different claim." Segal v. American Tel. and Tel. Co., Inc., 606 F.2d 842, 845 (9th Cir. 1979). "Issue preclusion bars the relitigation of issues actually adjudicated in previous litigation between the same parties." Littlejohn v. U.S., 321 F.3d 915, 923 (9th Cir.), cert. denied, 540 U.S. 985, 124 S.Ct. 486 (2003). "The issue must have been `actually decided' after a `full and fair opportunity' for litigation." Robi v. Five Platters, Inc., 838 F.2d 318, 322 (9th Cir. 1988).
Collateral estoppel applies to the section 1983 context in that there is "no reason to believe that Congress intended to provide a person claiming a federal right an unrestricted opportunity to relitigate an issue already decided in state court." Allen v. McCurry, 449 U.S. 90, 104, 101 S.Ct. 411 (1980). A "`federal court must give to a state-court judgment the same preclusive effect as would be given that judgment under the law of the State in which the judgment was rendered' under the Constitution's Full Faith and Credit Clause and under 28 U.S.C. § 1738." Holcombe v. Hosmer, 477 F.3d 1094, 1097 (9th Cir. 2007) (quoting Migra v. Warren City School Dist. Bd. of Ed., 465 U.S. 75, 81, 104 S.Ct. 892 (1984)). "A party's ability to relitigate an issue decided in a prior state court determination depends on the law of the state in which the earlier litigation occurred." Kinslow v. Ratzlaff, 158 F.3d 1104, 1105 (10th Cir. 1998); see Holcombe, 477 F.3d at 1097 ("the court applies Nevada law concerning claim preclusion to the Nevada judgment.")
Defendants are correct that California law governs application of collateral estoppel to the January 31 order rendered by a California court.
The party asserting collateral estoppel bears the burden to prove the doctrine's requirements. First N.B.S. Corp. v. Gabrielsen, 179 Cal.App.3d 1189, 1194, 225 Cal.Rptr. 254, 256 (1989). Threshold requirements to apply collateral estoppel are:
Lucido, 51 Cal.3d at 341, 272 Cal.Rptr.2d at 769.
Plaintiffs advocate their satisfaction of the collateral estoppel elements.
"The application of the doctrine of collateral estoppel depends on whether the issue in both actions is the same, not whether the issue arises in the same context." Gabrielsen, 179 Cal.App.3d at 1195-1196, 225 Cal.Rptr. at 257 (italics in original). "[O]nly issues actually litigated in the initial action may be precluded from the second proceeding under the collateral estoppel doctrine. ... An issue is actually litigated `[w]hen [it] is properly raised, by the pleadings or otherwise, and is submitted for determination, and is determined.'" Gottlieb v. Kest, 141 Cal.App.4th 110, 148, 46 Cal.Rptr.3d 7 (2006) (citations omitted).
Plaintiffs argue that the state action and this action address the identical issue as to the affidavit's validity and in turn the unlawful search and seizure of RV Best. Without expanding, defendants offer that the issues in the state action and this action are not identical.
The state action addressed the precise issue at stake here — the validity of the affidavit and in turn the search and seizure of Best RV property. Defendants offer nothing to challenge the identity of issues in the state action and this action. Plaintiffs establish the identical issues element.
To challenge application of collateral estoppel, defendants chiefly dispute similarity of parties in the state action and this action.
In Clemmer v. Hartford Ins. Co., 22 Cal.3d 865, 875, 151 Cal.Rptr. 285 (1978), the California Supreme Court examined the due process implications of collateral estoppel:
Clemmer, 22 Cal.3d at 875, 151 Cal.Rptr. 285 (citations omitted); see Lynch v. Glass, 44 Cal.App.3d 943, 948, 119 Cal.Rptr. 139 (1975) ("collateral estoppel may be applied only if the requirements of due process are met").
Defendants argue that the same parties/privity element is missing in that defendants lacked control or a direct personal interest in the outcome of the state action. Defendants note that in the state action, Mr. Brathwaite appeared not in his individual capacity but merely as a DMV witness "in his official capacity as an investigator" and that DA Goulart appeared only for DMV, not defendants. Defendants point out that Ms. Thomas was not named in the state action and did not appear in it. Defendants contend that defendants lacked a personal interest in the outcome of the state action and were not represented by personal counsel.
Defendants equate the state action to criminal prosecution which law enforcement officers investigated and in which they testify. Defendants point to the absence of privity between an underlying criminal prosecution and a subsequent section 1983 action. See Hardesty v. Hamburg Tp., 461 F.3d 646, 651 (6th Cir. 2006) ("police officer defendants in a § 1983 case are not in privity with the prosecution of a related criminal case and do not have a personal stake in the outcome of the criminal case"); McCoy v. Hernandez, 203 F.3d 371, 375 (5th Cir. 2000) ("a § 1983 plaintiff may not invoke the doctrine of collateral estoppel against officers following a favorable ruling in a prior criminal proceeding"); Kinslow, 158 F.3d at 1106 ("The mere fact that [the officers] happen[ed] to be interested in a particular question, or in proving a state of facts as may have been presented in [the prior action,] ... does not establish that they were in privity with any of the parties in that action. ... Because the officers were neither parties nor privies to the prior state court determination and, therefore, did not have a full and fair opportunity to litigate in state court the constitutionality of the issues in this section 1983 action, the doctrine of issue preclusion does not apply to this case."); Davis v. Eide, 439 F.2d 1077, 1078 (9th Cir. 1971) ("The defendants were city police officers not directly employed by the state; they had no measure of control whatsoever over the criminal proceeding and no direct individual personal interest in its outcome. In these circumstances there was no privity sufficient to invoke the doctrine of collateral estoppel.").
The state court action was not a criminal prosecution. It was an action to seek return of property held by DMV. Nonetheless, the state court action is similar to a criminal prosecution for collateral estoppel purposes and could not have arisen without a criminal prosecution. DA Goulart represented DMV's interests in the state prosecution even though Mr. Brathwaite was a named party in the state action. DA Goulart did not represent defendants' personal interests and in particular those interests at issue in this section 1983 action. Defendants had no direct personal stake in the state action. They do in this action. At most, defendants were interested in particular issues involved in the state action which fails to establish their same parties/privity status. Defendants had no control over DA Goulart and his defense of the state court action. Plaintiffs fail to establish the same parties/privity element.
Plaintiffs contend that the validity of the affidavit and search and seizure of property was actually litigated and "fully explored" in the state action given its two-day hearing with evidence and argument to culminate in Judge Salter's January 31 order. Plaintiffs note that the January 31 order's finding that the "search warrant would not have been issued" with revelation of "full facts" was "critical and necessary" to the determination to restore plaintiffs' seized property. Plaintiffs point out that defendants do not challenge the January 31 order's validity.
Defendants argue that they lacked a full and fair opportunity in the state action to litigate issues at stake in this action.
"[E]specially where collateral estoppel is applied `offensively' to preclude a defendant from relitigating an issue the defendant previously litigated and lost, the courts consider whether the party against whom the earlier decision is asserted had a `full and fair' opportunity to litigate the issue." Roos v. Red, 130 Cal.App.4th 870, 880, 30 Cal.Rptr.3d 446 (2005), cert. denied, 546 U.S. 1174, 126 S.Ct. 1341 (2006). "[C]ollateral estoppel cannot apply when the party against whom the earlier decision is asserted did not have a `full and fair opportunity' to litigate that issue in the earlier case." Allen v. McCurry, 449 U.S. 90, 95, 101 S.Ct. 411 (1980). The "requirement of determining whether the party against whom an estoppel is asserted had a full and fair opportunity to litigate is a most significant safeguard." Blonder-Tongue Laboratories, Inc. v. Univ. of Illinois, 402 U.S. 313, 329, 91 S.Ct. 1434 (1979).
Plaintiffs seek offensive use of collateral estoppel to bar defendants to relitigate the affidavit's probable cause. Defendants argue that such offensive use is "unfair" because defendants lacked "a full and fair opportunity" to litigate plaintiffs' section 1983 claims in that the state action challenged the affidavit's sufficiency for return of the seized property. Defendants note that plaintiffs' section 1983 claims here challenge "the integrity of the warrant and make[] a Franks
In the state action, defendants lacked a full and fair opportunity to litigate the section 1983 claims here seeking to impose personal liability on them. Defendants did not themselves actually litigate and lose the probable cause issue in the state court action which addressed return of plaintiffs' property only. Defendants' personal liability was not at stake in the state action. Although the affidavit was found invalid in the state action, plaintiffs fail to demonstrate that such finding is conclusive on defendants for purposes of their personal liability. As noted above, defendants lacked representation in the state action in that DA Goulart defended DMV interests. Applying collateral estoppel would negate the safeguard of a full and fair opportunity to litigate issues giving rise to defendants' potential personal liability.
For the reasons discussed above, this Court DENIES plaintiffs' motion to apply collateral estoppel that the affidavit lacked sufficient probable cause. Given denial of plaintiffs' motion, this Court need not address additional points raised by defendants, including treatment of plaintiff's papers as a summary judgment motion to require additional time for defendants to oppose.
Littlejohn, 321 F.3d at 923 (bold added).
