Appeal from the United States District Court for the Central District of California Florence-Marie Cooper, District Judge, Presiding D.C. No. CV-07-00838-FMC
The opinion of the court was delivered by: Graber, Circuit Judge
Argued and Submitted November 17, 2008-Pasadena, California
Filed January 27, 2009; Amended March 18, 2009
Before: Susan P. Graber and Richard R. Clifton, Circuit Judges, and Edward C. Reed,*fn1 District Judge.
Opinion by Judge Graber; Partial Concurrence and Partial Dissent by Judge Clifton
The opinion filed on January 27, 2009, slip opinion page 909, and published at 2009 WL 174915, is replaced by the amended opinion filed concurrently with this order.
With this amendment, the panel has voted to deny the petition for rehearing. Judges Graber and Clifton have voted to deny the petition for rehearing en banc, and Judge Reed has so recommended.
The full court has been advised of the petition for rehearing en banc, and no judge of the court has requested a vote on it.
The petition for rehearing and petition for rehearing en banc are DENIED. No further petitions will be entertained.
Plaintiffs Paula Lauren Gibson and Annette D. Goode-Parker work for the Office of the Attorney General of the State of California ("OAG") as a lawyer and a paralegal, respectively. In violation of an internal policy of the OAG, Gibson represented Goode-Parker in a private legal malpractice case without first having obtained permission from the OAG. The OAG informed Gibson that she would be fired if she continued the private representation. Plaintiffs then filed this action against the OAG and individual decision-makers, alleging a violation of their First Amendment rights and a breach of contract. We hold that the district court properly dismissed the action under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim, but erred in awarding attorney fees to Defendants.
Gibson works as a Deputy Attorney General in the Antitrust Law Section of the OAG. Goode-Parker is employed as a Senior Legal Analyst in the same section. On June 25, 2003, Gibson filed a private legal malpractice action on behalf of Goode-Parker against a California divorce lawyer in the Los Angeles Superior Court. The malpractice claim related to the divorce lawyer's representation of Goode-Parker in a divorce proceeding. Although the OAG requires its lawyers to obtain permission in advance to engage in the private practice of law, Gibson did not seek permission to represent Goode-Parker until nearly a year after filing the malpractice case. Defendant Kathleen Foote, Senior Assistant Attorney General for the Antitrust Law Section, ultimately denied Gibson's request on the ground that the existence of a separate, pending claim by the divorce lawyer against Gibson with the State Board of Control created a conflict of interest.
Gibson filed a grievance concerning the denial of her request to represent Goode-Parker. Gibson argued that the OAG's policy of requiring advance permission for engaging in the private practice of law violates the First Amendment. Four months later, without any formal action in response to Gibson's grievance, Gibson was informed that she would be terminated from her employment with the OAG if she did not withdraw from representing Goode-Parker in the malpractice action.
Immediately thereafter, Defendant James Thomas Greene, the Chief Assistant Attorney General for the Public Rights Division, reviewed and denied Gibson's grievance. He noted in his denial that it is difficult for a deputy attorney general to engage in the private practice of law and not come into conflict with the OAG's interests or those of a client. He also noted that the prior-approval process is necessary to prevent conflicts between a public employee's official duties and his or her outside activities, and he opined that the process is not an unconstitutional prior restraint.
Gibson appealed the denial of her grievance, and Defendant Richard M. Frank, Chief Deputy Attorney General, upheld the denial. He agreed with Greene's conclusions that the OAG's pre-approval requirement is not an unconstitutional prior restraint and that Gibson's involvement in the malpractice action created a conflict of interest. Gibson ...