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Allen Coleman, et al v. Kathleen Sterling

March 7, 2011


The opinion of the court was delivered by: United States District Judge Southern District of California Hon. Thomas J. Whelan


Pending before the Court is Plaintiffs' motion for leave to file a second amended complaint. Specifically, Plaintiffs seek to add Joseph McFaul as a defendant to the existing Seventh Claim for violation of 42 U.S.C. § 1983 based on the deprivation of rights under the Fourteenth Amendment of the United States Constitution.*fn1 Defendants oppose.

The Court decides the matter on the papers submitted and without oral argument. See Civ. L.R. 7.1(d)(1). For the following reasons, the Court DENIES Plaintiffs' motion. (Doc. 69.)


On April 16, 2010, Plaintiffs filed a First Amended Complaint ("FAC"), the operative complaint in this action. (Doc. 34.)

Plaintiffs were all senior executives employed by Defendant Tri-City Healthcare District ("District"), a public entity under state law, under written employment agreements, and written procedures and policies adopted by the District. (FAC ¶¶ 11, 125 [Doc. 34].) In December 2008, Plaintiffs were placed on administrative leave "without any notice or explanation." (FAC ¶ 127.) On April 23, 2009, Defendants terminated Plaintiffs' employment "without providing the materials, facts and evidence upon which their contracts were terminated, without having provided timely notice of the allegations of employment wrongdoing[,] and without an opportunity to meaningful [sic] respond to the charges against them." (FAC ¶ 128.) On July 15, 2009, Plaintiffs filed a complaint for breach of contract, constitutional violations, breach of the California Labor Code, defamation, and intentional infliction of emotional distress against Defendants.

McFaul is an attorney who was retained by the District to perform an investigation concerning accusations of misconduct involving Plaintiffs. (McFaul Decl. ¶¶ 2, 3 [Doc. 62]; SAC ¶ 55 [Doc. 69-2].) According to the allegations in the Proposed SAC, McFaul prepared reports "constituting over 250 pages containing allegations of wrongdoing against [Plaintiffs] in concert with Defendant Larry Anderson and [] Biggs." (SAC ¶ 134.) Plaintiffs allege that "[t]hese reports were secretly presented to the District Board which relied upon the information when authorizing Defendant Larry Anderson to terminate [Plaintiffs]." (Id.) Plaintiffs further allege that McFaul, Biggs, and Defendant Anderson "agreed to work together with the intent to terminate [Plaintiffs] in violation of Section 1983 and the due process protections . . . by concealing evidence of alleged wrongdoing from [Plaintiffs], preventing them from addressing the evidence assembled against them, crafting a termination procedure that offered no pre or post-termination hearing . . . ." (Id.)

On November 30, 2010, Plaintiffs filed the instant motion for leave to file a second amended complaint that seeks to add McFaul as a defendant to the Seventh Claim for violation of 42 U.S.C. § 1983. Defendants oppose. (Docs. 75, 76.)


Rule 15(a) of the Federal Rules of Civil Procedure provides that after a responsive pleading has been served, a party may amend its complaint only with the opposing party's written consent or the court's leave. Fed. R. Civ. P. 15(a). "The court should freely give leave when justice so requires," and apply this policy with "extreme liberality." Id.; DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 186 (9th Cir. 1987). However, leave to amend is not to be granted automatically. Zivkovic v. S. Cal. Edison Co., 302 F.3d 1080, 1087 (9th Cir. 2002) (citing Jackson v. Bank of Hawaii, 902 F.2d 1385, 1387 (9th Cir. 1990)). Granting leave to amend rests in the sound discretion of the district court. Pisciotta v. Teledyne Indus., Inc., 91 F.3d 1326, 1331 (9th Cir. 1996).

The Court considers five factors in assessing a motion for leave to amend: (1) bad faith, (2) undue delay, (3) prejudice to the opposing party, (4) futility of the amendment, and (5) whether the plaintiff has previously amended the complaint. Johnson v. Buckley, 356 F.3d 1067, 1077 (9th Cir. 2004). Of these factors, prejudice to the opposing party carries the greatest weight. Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003). However, absent prejudice, a strong showing of the other factors may support denying leave to amend. See id.; Allen v. City of Beverly Hills, 911 F.2d 367, 373 (9th Cir. 1990) (holding that futility supports a court's decision to deny a motion for leave to amend).

Futility is a measure of the amendment's legal sufficiency. "[A] proposed amendment is futile only if no set of facts can be proved under the amendment . . . that would constitute a valid and sufficient claim or defense." Miller v. Rykoff-Sexton, Inc., 845 F.2d 209, 214 (9th Cir. 1988). Thus, the test of futility is identical to the one applied when considering challenges under Rule 12(b)(6) for failure to state a claim upon which relief may be granted. Baker v. Pac. Far East Lines, Inc., 451 F. Supp. 84, 89 (N.D. Cal. 1978); see Saul v. United States, 928 F.2d 829, 843 (9th Cir. 1991) ("A district court does not err in denying leave to amend . . . where the amended complaint would be subject to dismissal." (citation omitted)).


To state a claim for relief under 42 U.S.C. § 1983, plaintiffs must demonstrate that the defendants: (1) were acting under color of state law, and (2) deprived him of a right, privilege, or immunity secured by the Constitution or laws of the United States. West v. Atkins, 487 U.S. 42, 48 (1988); Kildare v. Saenz, 325 F.3d 1078, 1085 (9th Cir.2003). Generally, a private individual is not acting under color of state law. Price v. Hawaii, 939 F.2d 702, 707-08 (9th Cir. 1991). "Private attorneys do not act under color of state law when engaged in the private practice of law." Rushdan v. Hale, No. C02-1325TEH(PR), 2002 WL 981863, at *1 (N.D. Cal. May 7, 2002) (citing Franklin v. Oregon, 662 F.2d 1337, 1345 (9th Cir. 1981)); see also Polk Cnty. v. Dodson, 454 U.S. 312, 325 (1981) ("[A] lawyer representing a client is not . . . a state actor 'under color of state law' within the meaning of ยง ...

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