Judge: Christopher K. Lui, Case: 22STCV40889, Date: 2024-08-06 Tentative Ruling
Case Number: 22STCV40889 Hearing Date: August 6, 2024 Dept: 76
Plaintiffs are given 30 days’
leave to amend. Plaintiffs are also ordered to attach a copy of any Government
Claims submitted to the City, as exhibits to the amended complaint.
ANALYSIS
Motion For
Judgment On The Pleadings
Request For
Judicial Notice
Defendant requests that the Court
take judicial notice of the following: (1) The claim for damages filed on June
10, 2022 for Dennis Ashley, Jr. (“Plaintiff”), Claim No. C22-20476, a true and
correct copy which is attached as Exhibit 1.
(2) The claim for damages filed on June 10, 2022 for Dennis Ashley, III
(“Plaintiff”), Claim No. C22-20475, a true and correct copy which is attached
as Exhibit 2. (3) A letter dated June
30, 2022 from Chief Investigator, Brian Sam of the Los Angeles City Attorney’s
Office, denying Dennis Ashley Jr.’s claim, Claim No. 22-20476 (along with the proof
of service by mail), true and correct copies which are attached as Exhibit
3. (4) A letter dated June 30, 2022 from
Chief Investigator, Brian Sam of the Los Angeles City Attorney’s Office,
denying Dennis Ashley, III’s claim, Claim No. 22-20475 (along with the proof of
service by mail), true and correct copies which are attached as Exhibit 4.
Requests Nos. 1 – 4 are DENIED. The
Court is not authorized to take judicial notice of city records. Plaintiff’s
objections to the RJN are SUSTAINED.
Evid. Code
§ 452 provides: “Judicial notice may be taken of the following matters to the
extent that they are not embraced within Section 451: . . . (c) Official
acts of the legislative, executive, and judicial departments of the United
States and of any state of the United
States.” (Bold emphasis added.)
Under Evidence Code section 452,
judicial notice may be taken of decisional law and of public and private
official acts of any state. This provision is also applicable to counties since
they are, of course, legal departments of the state. (Watson v. Los Altos
School Dist., 149 Cal.App.2d 768, 772 [308 P.2d 782].) Cities, however, are municipal corporations which are distinct
individual entities and are not connected political subdivisions of the states.
As such, they do not have the legal status of counties. (Otis v. City of Los
Angeles, 52 Cal.App.2d 605, 611-612 [126 P.2d 954].) Therefore, the trial court properly refused to take
judicial notice of the records of the city's board of rights.
(Marino v. Los Angeles (1973) 34 Cal.App.3d 461, 465 [bold emphasis
added].)
Meet and Confer
The Declaration of Surekha A.
Shepherd reflects that Defendant’s counsel satisfied the meet and confer
requirement set forth in Civ. Proc. Code, § 439.
Discussion
Defendant City of Los Angeles moves
for judgment on the pleadings as to the First Amended Complaint. On a motion
for judgment on the pleadings, the same rules applicable on demurrer apply. (County of Orange v. Association of Orange
County Deputy Sheriffs (2011) 192 Cal.App.4th 21, 32-33.) “Presentation of extrinsic evidence is . . .
not proper on a motion for judgment on the pleadings.” (Cloud v. Northrop Grumman Corp. (1998) 67 Cal.App.4th 995, 999.)
“A demurrer tests the pleadings
alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear
on the face of the pleading or are judicially noticed (Code Civ. Proc., §§
430.30, 430.70). The only issue involved in a demurrer hearing is whether the
complaint, as it stands, unconnected with extraneous matters, states a cause of
action [citation].” (SKF Farms v. Superior Court (1984) 153 Cal. App. 3d 902, 905 [200 Cal. Rptr.
497].)
(Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.)
1. First
Cause of Action (False Arrest).
Defendant
argues that because Plaintiffs admit they did not possess the requisite license
at issue in this case, see FAC ¶ 23-25, Plaintiffs cannot state a claim for
False Arrest and the cause of action must be dismissed.
This
argument relies upon documents as to which the Court denied Defendant’s request
for judicial notice. As such, this argument is not persuasive.
Defendant
also argue that this claim fails because the arrests following the service of a
judicially-authorized search warrant supported by probable cause.
Reasonable
cause is a justification constituting a defense to a cause of action for false
imprisonment based on false arrest. (Collins v. County of Los
Angeles (1966) 241 Cal.App.2d 451, 456-57; Levin v. United Air Lines, Inc. (2008) 158
Cal.App.4th 1002, 1018-19.) This relies upon evidence extrinsic to the 1AC and
cannot be considered on a motion for judgment on the pleadings.
The motion
for judgment to the pleadings as to the first cause of action is DENIED.
2 Second
Cause of Action (Intentional Infliction of Emotional Distress).
Defendant
argues that because Plaintiffs’ government tort claims did not put the City on
notice of their cause of action for Intentional Infliction of Emotional
Distress, the cause of action must be dismissed.
This
argument relies upon documents as to which the Court denied Defendant’s request
for judicial notice. As such, this argument is not persuasive.
The motion
for judgment to the pleadings as to the second cause of action is DENIED.
3. Third
Cause of Action (Negligent Infliction of Emotional Distress).
Defendant argues that because
Plaintiffs’ government tort claims did not put the City on notice of their
cause of action for Negligent Infliction of Emotional Distress, the cause of
action must be dismissed.
This
argument relies upon documents as to which the Court denied Defendant’s request
for judicial notice. As such, this argument is not persuasive.
The motion
for judgment to the pleadings as to the third cause of action is DENIED.
4. Fourth
Cause of Action (Conversion).
Defendant argues that because
Plaintiffs’ government tort claims did not put the City on notice of their
cause of action for Conversion, the cause of action must be dismissed.
This
argument relies upon documents as to which the Court denied Defendant’s request
for judicial notice. As such, this argument is not persuasive.
The motion
for judgment to the pleadings as to the fourth cause of action is DENIED.
5. Fifth
Cause of Action (Intentional Misrepresentation).
Defendant argues that because
Plaintiffs’ government tort claims did not put the City on notice of their
cause of action for Intentional Misrepresentation, the cause of action must be
dismissed.
Defendant
also argues that this cause of action is also barred by Government Code
Sections 818.8 and 822.2.
While Gov.
Code, § 822.2 relates to the liability of a public employee, there are no
public employee individual defendants.
Defendant
City of Los Angeles is the only Defendant and, that regard, it is immune from
liability for misrepresentation by its employees: “A public entity is not
liable for an injury caused by misrepresentation by an employee of the public
entity, whether or not such misrepresentation be negligent or intentional.” (Gov.
Code § 818.8.)
Because this cause of action is
based on the allegation that Defendant represented to Plaintiffs that
Plaintiffs were able to operate their cannabis business lawfully within the
jurisdiction of the City of Los Angeles (1AC, ¶ 117), the cause of action is
barred by Gov. Code, § 818.8.
The motion for judgment on the
pleadings is GRANTED without leave to amend as to the fifth cause of
action. If Plaintiff discovers information sufficient to name an individual
Defendant, Plaintiff may file a Doe amendment.
6. Sixth
Cause of Action (Violation of the Bane Act).
Defendant argues that because
Plaintiffs’ government tort claims did not put the City on notice of their
cause of action for violation of the Bane Act, the cause of action must be
dismissed.
This
argument relies upon documents as to which the Court denied Defendant’s request
for judicial notice. Defendant must bring a motion for summary judgment or
summary adjudication in this regard.
The motion for judgment on the
pleadings is DENIED.
7. Seventh
Cause of Action (Violation of the Unruh Civil Rights Act).
Defendant argues that because
Plaintiffs’ government tort claims did not put the City on notice of their
cause of action for violation of the Unruh Civil Rights Act, the cause of
action must be dismissed.
This
argument relies upon documents as to which the Court denied Defendant’s request
for judicial notice. Defendant must bring a motion for summary judgment or
summary adjudication in this regard.
Defendant
also argues that the Unruh Civil Rights Act claim also fails as matter of law
because the City is not a “business establishment” as required by the statute, and
Plaintiffs’ Complaint for Damages did not include a cause of action brought
pursuant to the Unruh Civil Rights Act. Therefore, the cause of action is
barred by Government Code Section 945.6(a)(1).
While the
1AC does not cite the statutory section, the Unruh Civil Rights Act is codified
at Civil Code, § 51:
(a) This section shall be known,
and may be cited, as the Unruh Civil Rights Act.
(b) All persons within the
jurisdiction of this state are free and equal, and no matter what their sex,
race, color, religion, ancestry, national origin, disability, medical
condition, genetic information, marital status, sexual orientation, citizenship,
primary language, or immigration status are entitled to the full and equal
accommodations, advantages, facilities, privileges, or services in all
business establishments of every kind whatsoever.
(Civ. Code, § 51(a) & (b)[bold
emphasis added].)
The seventh
cause of action is based on the allegations:
15. The Legislature for the State of
California established and enacted the California Cannabis Equity Act of
2018. The bill authorized the Bureau of Cannabis Control, upon request
by a local jurisdiction, to provide technical assistance, to a local equity
program that helps local equity applicants or local equity cannabis licensees.
16. The bill, funded by the Budget Act
of 2019, required the local jurisdiction that receives funds pursuant to
this act to assist local equity licensees in that local jurisdiction to gain
entry to, and to successfully operate in, the state's regulated cannabis
marketplace.
17. The program was to be designed
to assist households with a household income less than or equal to 60 percent
of the area median income for the applicable local jurisdiction. Bus. &
Prof. Code, § 26249.
18. Pursuant to the foregoing, CITY
applied for and received approximately $7.8 million in accordance with the
Cannabis Equity Act of 2018.
19. CITY thereafter had a duty to,
and advertised that it would, provide direct assistance to equity applicants
and equity licensees in the Social Equity Program.
20. CITY advertised and thereby
promised that the Los Angeles Department of Cannabis Regulation (hereinafter
“DCR”) would regularly engage with applicants and licensees.
21. A “local equity applicant” means an
applicant who has submitted, or will submit, an application to a local
jurisdiction to engage in commercial cannabis activity within the
jurisdictional boundaries of that jurisdiction and who meets the
requirements of that jurisdiction's local equity program. Bus. & Prof.
Code, § 26240.
22. A “local equity licensee” means a
person who has obtained a license from a local jurisdiction to engage in
commercial cannabis activity within the jurisdictional boundaries of that
jurisdiction and who meets the requirements of that jurisdiction's local equity
program. Bus. & Prof. Code, § 26240.
23. Plaintiffs applied to the social
equity program established by CITY, thereby making Plaintiffs “local equity
applicants” pursuant to Bus. & Prof. Code, § 26240.
24. Plaintiffs applied for a retail
license.
25. The application for the retail
license was provided to and handled primarily by CITY through DCR.
26. After applying for the social
equity program Plaintiffs were subjected to hardships which demonstrated
that the process was less than equitable.
27. CITY often changed the rules and
moved the goalposts to be met by Plaintiffs and other applicants. Often,
these rule changes occurred within months of each other at a substantial
cost to Plaintiffs and other applicants.
28. In one such example, CITY
informed Plaintiffs and other applicants that they must secure a location to
operate before their application would be processed once the application portal
was opened.
29. Due to this, Plaintiffs and
other applicants were forced to enter into lease agreements.
30. However, upon opening the
application portal, Plaintiffs and other applicants were told that they did not
need a location to apply. This resulted in Plaintiffs and other applicants
needlessly incurring multiple months of lease payments and financial
obligations.
31. Through this act and the harm
caused by forcing Plaintiffs to needlessly incur these obligations, CITY
breached the voluntary duty CITY undertook provide direct assistance to equity
applicants and equity licensees in the Social Equity Program by assisting local
equity
licensees in CITY to gain entry to, and
to successfully operate in, the state's regulated cannabis marketplace.
32. When CITY finally acted to issue
multiple retail licenses, CITY issued a substantial amount of the licenses to a
single corporate entity thereby further prejudicing Plaintiffs and many of the
other equity applicants.
33. In issuing licenses in this manner,
CITY acted primarily for a purpose other than to provide direct assistance
to equity applicants and equity licensees in the Social Equity Program by
assisting local equity licensees in CITY to gain entry to, and to successfully
operate in, the state's regulated cannabis marketplace.
34. Plaintiffs are informed and believe
and thereon allege that the selection process for retail licensing was
largely based on race, and primarily for the purpose of harming those
individuals in the Social Equity Program who were or appeared to be black or
African American.
35. Having been denied a retail
license due to the racist policies of CITY, Plaintiffs applied for a license
for delivery of cannabis within the Social Equity Program.
36. The application for the delivery
license was provided to and handled primarily by CITY through DCR.
37. Thereafter, Plaintiffs engaged with
CITY, through DCR, in a multi-step process that included multiple inspections
by CITY from several departments including but not limited to the Department of
Building & Safety, the Fire Department, and DCR.
38. Thereafter, and on or about
October of 2020, Plaintiffs were notified that they had been temporarily
approved pending approval of their license by the State of California.
39. Plaintiffs are informed and believe
and thereon allege that a temporary license was issued by CITY through DCR.
40. Plaintiffs are informed and believe
and thereon allege that the State of California will not issue a license unless
and until an applicant is approved by the local jurisdiction.
41. Plaintiffs are informed and believe
and thereon allege that CITY misrepresented the approval status of
Plaintiffs license to Plaintiffs and the State of California, knowing that the
State of California and Plaintiffs would rely on such misrepresentation in the
state license application process.
42. Due to CITY issuing
Plaintiffs’ temporary license, the State of California approved Plaintiffs
delivery license.
43. CITY’s actions were relied on by
Plaintiffs who were misled to believe that they were allowed to begin
operations of their entity in full.
(1AC, ¶¶ 15 –
43.)
The seventh
cause of action is actually based on the following allegations:
136. Defendants intentionally or
recklessly acted to prevent Plaintiffs from fully and equally participating
in the social equity cannabis programs in the State of California.
137. Plaintiffs are informed and
believe and thereon allege that a substantial motivating reason for
Defendants actions were Plaintiffs ethnic background, as African Americans.
(1AC, 136, 137 [bold emphasis and
underlining added].)
A close
read of the foregoing allegations reveals that the gist of Plaintiff’s Unruh
Rights Act cause of action is that they were denied a retail license due to the
racist policies of the City in administering the Social Equity Program and were
instead issued a cannabis delivery license within the Social Equity Program.
Defendant does not cite case law
which expressly holds that a city cannot be held liable under the Unruh Act as
a “business establishment” in administering a license program. Defendant cites
cases which deal with whether a city may be held liable as a business
establishment in enacting ordinances. (Burnett v. San Francisco Police Dep't
(1995) 36 Cal.App.4th 1177; Qualified Patients Ass'n v. City of Anaheim (2010)
187
Cal.App.4th 734); Harrison v. City
of Rancho Mirage (2015) 243 Cal.App.4th 162.)
While a
city administering a license program may or may stand on equal footing as a
city enacting ordinances, there is a specific immunity which applies.
A public entity is not liable for an
injury caused by the issuance, denial, suspension or revocation of, or by the
failure or refusal to issue, deny, suspend or revoke, any permit, license,
certificate, approval, order, or similar authorization where the public entity
or an employee of the public entity is authorized by enactment to determine
whether or not such authorization should be issued, denied, suspended or
revoked.
(Gov. Code §
818.4.)
As such, this cause of action
appears to be barred by Gov. Code, § 818.4.
However, since the Court raised this issue on its own, Plaintiff will be
given leave to amend to plead around this immunity,
The motion for judgment to the
pleadings is GRANTED as to the seventh cause of action with leave to amend.
Plaintiffs are given 30 days’ leave
to amend. Plaintiffs are also ordered to attach a copy of any Government Claims
submitted to the City, as exhibits to the amended complaint.