United States District Court, N.D. California
For Ling La, an individual, Plaintiff: Spencer Freeman Smith, LEAD ATTORNEY, Dow Wakefield Patten, Smith Patten, San Francisco, CA.
For San Mateo County Transit District, a Special Transit District, Michael Scanlon, in his individual and official capacity, Sheila Tioyao, in her individual and official capacity, Defendants: Diane Marie O'Malley, LEAD ATTORNEY, Alexandra V. Atencio, Hanson Bridgett LLP, San Francisco, CA.
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS THE SECOND AMENDED COMPLAINT
WILLIAM H. ORRICK, United States District Judge.
Re: Dkt. No. 36
Plaintiff Ling La was terminated from her job as an accountant for defendant San Mateo County Transit District (" SamTrans") after repeatedly complaining to coworkers, supervisors, and several outside authorities about accounting irregularities she suspected were taking place within SamTrans. She then filed this employment retaliation action against SamTrans and two individual defendants -- Michael Scanlon, SamTrans's Chief Executive Officer, and Sheila Tioyao, her supervisor during most of her period of employment -- for: (i) retaliation in violation of Cal. Labor Code § 1102.5(b); (ii) retaliation in violation of 42 U.S.C. § 1983 and the First Amendment; and (iii) deprivation of substantive due process in violation of 42 U.S.C. § 1983 and the Fourteenth Amendment; and (iv) retaliation in violation of Cal. Gov. Code § 12653, the whistleblower retaliation provision of the California False Claims Act.
Defendants move to dismiss La's Second Amended Complaint (" SAC") under Federal Rule of Civil Procedure 12(b)(6), arguing, among other things, that the Cal. Lab. Code § 1102.5(b) and Cal. Gov. Code § 12653 causes of action are barred by La's failure to allege compliance with the California Tort Claims Act. They are correct, and further amendment would be futile. Those causes of action are DISMISSED WITHOUT LEAVE TO AMEND. Scanlon and Tioyao contend that La has failed to allege sufficient facts to hold either of them liable under the section 1983 causes of action. That is also true, and those claims are DISMISSED WITH LEAVE TO AMEND. Because La adequately alleges that she spoke as a private citizen when making her complaints, the motion to dismiss the First Amendment retaliation claims against SamTrans is DENIED.
I. FACTUAL BACKGROUND
La's allegations are set out in detail in the September 16, 2014 order on SamTran's motion to dismiss the First Amended Complaint (" FAC"), so I have only briefly summarized them here. Where relevant, I have included more detailed explanations of La's allegations in the discussion section below.
La was hired by SamTrans as a Senior Accountant in May 2011. SAC ¶ 4. In February 2012, La was transferred from the Treasury Division to the General Ledger and Accounts Payable Division, at which point Tioyao, who was the manager of that division, became La's supervisor. SAC ¶ 9. Between November 2012 and July 2013, La repeatedly complained to Tiaoyao, other supervisors, and various outside entities about accounting irregularities she suspected were taking place within SamTrans. In March 2013, Tioyao gave La a negative performance review, a " Performance Improvement Plan, " and a six month probation. SAC ¶ 29. On July 31, 2013, La received a Notice of Intent to Terminate. SAC ¶ 73. She alleges the Notice " was issued pursuant to SamTrans's policy and/or custom of terminating the employment of SamTrans employees who report suspected financial irregularities, fraud, waste, and abuse." SAC ¶ 74. Defendant Scanlon is SamTrans's Chief Executive Officer. SAC ¶ 8. The SAC does not allege that either Tioyao or Scanlon participated in the decision to terminate La.
The primary difference between the FAC and the SAC is that the SAC alleges with greater detail and clarity the particular regulations and statutes which La complained were being violated by the alleged accounting irregularities. The regulations and statutes include:
o 2 C.F.R. § 200.303. SAC ¶ 17.
o Cal. Pub. Con. Code § § 20330-20331. SAC ¶ 36.
o Cal. Pub. Con. Code § 20207.6. SAC ¶ 37.
o 29 C.F.R. § 3.4. SAC ¶ 45.
o 49 U.S.C. § 5325 and 49 C.F.R. § 18.36. SAC ¶ 47-48.
o Cal. Gov. Code § § 29120, 29121, and 29125. SAC ¶ 67.
The SAC also includes new allegations regarding communications between La and SamTrans following her receipt of the July 31, 2013 Notice of Intent to Terminate. See SAC ¶ ¶ 79-84. The communications concern La's request for " information concerning the reasons for the Notice of Intent to Terminate, " including " documentation supporting all discipline issued to Ms. La[, ] email correspondence concerning the basis for Ms. La being placed on a Performance Improvement Plan[, ] and email correspondence concerning why she is not being permitted to complete the Performance Improvement Plan." SAC ¶ 79. La eventually reviewed the requested documents at SamTrans's counsel's office on August 23, 2013. SAC ¶ 84.
II. PROCEDURAL BACKGROUND
La filed her initial complaint on April 16, 2014. Dkt. No. 1. On June 9, 2014, SamTrans responded with a motion to dismiss under Rule 12(b)(6). Dkt. No. 10. Rather than oppose the motion, on July 8, 2014, La filed the FAC, alleging four causes of action: (i) retaliation in violation of Cal. Labor Code § 1102.5(b); (ii) retaliation in violation of 42 U.S.C. § 1983 and the First Amendment; (iii) deprivation of substantive due process in violation of 42 U.S.C. § 1983 and the Fifth and Fourteenth Amendments; and (iv) retaliation in violation of Cal. Gov. Code § 12653, the whistleblower retaliation provision of the California False Claims Act (" CFCA"). Dkt. No. 19.
SamTrans once again moved to dismiss under Rule 12(b)(6). Dkt. No. 21. On September 16, 2014, I issued an order granting in part and denying in part the motion. Dkt. No. 33. I dismissed the state law whistleblower claims on the ground that La had failed to adequately plead protected activity within the meaning of either Cal. Labor Code § 1102.5(b) or Cal. Gov. Gode § 12653. Id. at 7-10, 18-20. I gave La leave to amend both causes of action. Id. at 21. I also dismissed with prejudice La's claims under the Fifth Amendment on the ground that SamTrans is not part of the federal government. Id. at 16. I denied SamTrans's motion to dismiss La's section 1983 claims for First Amendment retaliation and deprivation of substantive due process in violation of the Fourteenth Amendment. Id. at 10-18.
La filed the SAC on October 6, 2014. Dkt. No. 35. The SAC alleges the same four causes of action as the FAC, minus any claims under the Fifth Amendment. SAC ¶ ¶ 89-138. The state law whistleblower causes of action are alleged against only SamTrans, while the section 1983 causes of action are alleged against all defendants. Id. Defendants filed the instant motion on October 20, 2014. Dkt. No. 36. Although Scanlon and Tioyao did not join in SamTrans's prior motions to dismiss, they do join in this one. This appears to be because Scanlon and Tioyao were not served until after the FAC had been filed. See Mot. 6 (Dkt. No. 36). Pursuant to Local Rule 7-1(b), I found the motion suitable for resolution without oral argument and vacated the hearing set for December 3, 2014.
A motion to dismiss for failure to state a claim under Rule 12(b)(6) tests the legal sufficiency of a complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). A complaint " must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (internal quotation marks omitted). A claim is facially plausible when it " allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. In considering whether the complaint is sufficient to state a claim, the court accepts as true all factual allegations contained in the complaint. Id. However, the court need not accept as true " allegations that contradict matters properly subject to judicial notice." In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008) (internal quotation marks omitted). " Nor is the court required to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable ...