The opinion
1
2
3
4 UNITED STATES DISTRICT COURT
5 NORTHERN DISTRICT OF CALIFORNIA
6
7 STACEY KATZ BROWN, Case No. 24-cv-00044-PCP
8 Plaintiff,
ORDER GRANTING MOTION TO
9 v. DISMISS WITH LEAVE TO AMEND
10 CITY OF SAN JOSÉ, et al., Re: Dkt. No. 18
Defendants.
11
12 In this civil rights action, plaintiff Stacey Katz Brown alleges that the City of San José,
13 along with Mayor Mahan and his chief-of-staff James Reed, violated her due process rights under
14 the Fourteenth Amendment by disseminating false statements accusing her of leaking Mayor
15 Mahan’s planned vice mayoral nominee and denying her an opportunity to respond and clear her
16 name. According to the complaint, defendants’ conduct so stigmatized Brown as to prevent her
17 from obtaining new employment. Defendants move to dismiss Brown’s claims under Rule
18 12(b)(6), contending that she fails to state any valid causes of action. For the reasons that follow,
19 the Court grants defendants’ motion with leave to amend.
20 BACKGROUND1
21 Plaintiff Stacey Katz Brown is a resident of Santa Clara County who “carved out a path of
22 consummate achievement in both the public cand private sectors” in Silicon Valley before being
23 appointed as the budget director for the Mayor of the City of San José, Matthew Mahan. Compl.,
24 Dkt. No. 1–2, 5, 14. Defendant City of San José is a municipal corporation located in the County
25 of Santa Clara, California. Id. ¶ 8. Defendant Matthew Mahan, sued in his individual capacity, was
26 elected Mayor of the City of San José in November 2022 and thereafter was an employee of the
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1 City of San José. Id. ¶¶ 6, 20. Defendant James Reed, sued in his individual capacity, was
2 appointed chief of staff to Mahan after his election in November 2022 and was an employee of the
3 City of San José. Id. ¶ 8.
4 Brown alleges that she and Mahan finalized her role as budget director on December 6,
5 2022, and thereafter began her transition into the role. Compl. ¶¶ 22, 26. Brown alleges that on
6 January 5, 2023, she attended a scheduled meeting at which Reed announced that Mahan’s choice
7 of vice mayor had been leaked to his political opponent Cindy Chavez and as a result the mayor
8 was “irate.” Id. ¶¶ 21, 31. Two days later, on a Saturday, Reed called Brown and informed her that
9 “he had heard that she had leaked Mayor Mahan’s vice mayor appointment to Supervisor
10 Chavez,” an accusation Brown “immediately and unequivocally” denied. Id. ¶ 33. Despite
11 Brown’s protests that she was not the source of the leak, the complaint alleges that Reed was
12 unconvinced. Instead, he expressed that “there was no way forward” and placed her on
13 administrative leave. Id. Shortly thereafter, Brown’s cellphone was disconnected from the City’s
14 servers. Id. When Brown attempted to speak with Mahan the next day about the allegations and
15 the impact on her reputation, Mahan “expressed his concern over the leak and stated that he would
16 be deferring to Mr. Reed’s ‘judgment.’” Id. ¶ 34. Defendants provided Brown with “no
17 opportunity to defend herself against this false accusation.” Id. The following day, on January 9,
18 2023, Reed called Brown to inform her that “she could no longer work in Mayor Mahan’s office”
19 and denied Brown’s express request to negotiate the terms of her exit. Id. ¶ 35. In the days and
20 weeks following her termination, Brown alleges that she received calls from “concerned
21 coworkers” and “from news reporters requesting to know whether the accusations were true.” Id.
22 ¶ 36.
23 Brown “alleges that both Mayor Mahan and Mr. Reed repeated the false accusation at City
24 Hall and in the Silicon Valley political community at large.” Compl. ¶ 37. Brown alleges that she
25 “has sought other potential employment opportunities” but that, as a result of defendants’ conduct,
26 “[e]ach went nowhere however as word spread of her firing and the reasons for it.” She alleges
27 that she has “therefore been unable to obtain employment.” Id.
1 alleging that defendants deprived her of a protected liberty interest without due process in
2 violation of the Fourteenth Amendment.
3 Defendants move to dismiss Brown’s claims for failure to state a claim pursuant to Rule
4 12(b)(6). Defendants first seek to dismiss Brown’s claims against the individual defendants on the
5 ground that she fails to plead facts showing that defendants publicly disseminated any stigmatizing
6 charge sufficient to state a “stigma-plus claim,” as well as on the basis of qualified immunity.
7 Second, defendants seek to dismiss Brown’s Monell claim against the City of San José because
8 Brown has failed to plausibly allege a constitutional violation and fails to plead facts showing any
9 official policy for which the City would be liable under a Monell theory.
10 LEGAL STANDARD
11 Under Rule 12(b)(6), the Court must “accept all factual allegations in the complaint as true
12 and construe the pleadings in the light most favorable” to the non-moving party. Rowe v. Educ.
13 Credit Mgmt. Corp., 559 F.3d 1028, 1029–30 (9th Cir. 2009). The pleadings must nonetheless
14 allege facts that would allow the Court “to draw the reasonable inference that the defendant is
15 liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Legal conclusions
16 “can provide the complaint’s framework,” but the Court will not assume they are correct unless
17 adequately “supported by factual allegations.” Id. at 679
18 ANALYSIS
19 “[T]o lodge a cause of action under § 1983, [Brown] must establish that Defendants, (1)
20 acting under color of State law, (2) caused (3) Plaintiff[], as [a] U.S. citizen[] or person[] within
21 the jurisdiction of the United States, (4) a deprivation of rights, privileges, or immunities secured
22 by the Constitution and laws.” Chaudhry v. Aragon, 68 F.4th 1161, 1171 (9th Cir. 2023).
23 Brown anchors her Section 1983 claim on alleged deprivations of procedural due process
24 under the Fourteenth Amendment. Brown was an at-will employee with the City of San José and
25 does not contend that she had any property interest in her particular position with the City. Rather,
26 she alleges that defendants deprived her of a liberty interest—her ability to obtain employment in
27 her chosen profession—without due process. Courts have recognized a narrow circumstance under
1 trigger the requirements of due process. Blantz v. Cal. Dep’t of Corr. & Rehab., Div. of Corr.
2 Health Care Servs., 727 F.3d 917, 925 (9th Cir. 2013) (cleaned up). “[T]he liberty interests
3 protected by the Fourteenth Amendment are implicated only when the government’s stigmatizing
4 statements effectively exclude the employee completely from her chosen profession. Stigmatizing
5 statements that merely cause ‘reduced economic returns and diminished prestige, but not
6 permanent exclusion from, or protracted interruption of, gainful employment within the trade or
7 profession’ do not constitute a deprivation of liberty.” Id.
8 “[T]o prove a deprivation of rights under § 1983 pursuant to a ‘stigma-plus’ due process
9 claim, Plaintiffs must establish: (1) the public disclosure of a stigmatizing statement by a state
10 actor; (2) the accuracy of which is contested; (3) plus the denial of some more tangible interest.
11 Failure to establish any of these enumerated elements will defeat Plaintiffs’ ‘stigma-plus’ due
12 process claim under § 1983.” Chaudhry, 68 F.4th at 1171.
13 I. Brown fails to state a constitutional stigma-plus claim against Mahan and Reed.
14 To state a stigma-plus claim under the Fourteenth Amendment, the “stigma imposed must
15 be severe and genuinely debilitating…. the stigma must seriously damage a person’s reputation or
16 significantly foreclose his freedom to take advantage of other employment opportunities.” Hyland
17 v. Wonder, 972 F.2d 1129, 1141 (9th Cir. 1992). “Accusations of dishonesty or immorality are
18 sufficiently stigmatizing to implicate a liberty interest, but less severe accusations must be
19 analyzed on a case-by-case basis, and allegations of mere incompetence or inability are not
20 sufficient.” Blantz, 727 F.3d 917, 925 n.6 (9th Cir. 2013).
21 The Ninth Circuit has provided guidance as to the kinds of stigmatizing statements that do
22 and do not implicate liberty interests. Campanelli v. Bockrat, for example, involved accusations
23 against UC Berkeley’s head basketball coach. 100 F.3d 1476, 1477 (9th Cir. 1996). After his
24 termination, articles reported that the athletic director and vice-chancellor had fired him because
25 he engaged in “profane and abusive” conduct:
26 In claiming that the defendants’ statements rose to the level of
imposing stigma, Campanelli alleges, inter alia, that: Bockrath
27 publicly stated ‘the reason for Campanelli’s firing was verbal
physically ill; and Washington Post writer Tony Kornheiser reported
1 Bockrath’s and Boggan’s comments by calling Campanelli ‘an
abusive bully’ who ‘cursed his players incessantly,’ and did
2 psychological damage to the players. Through the newspaper articles
appended to and incorporated into Campanelli’s first amended
3 complaint, Campanelli alleges, inter alia, that Bockrath described
Campanelli's players as ‘beaten down and in trouble psychologically.’
4
5 Id. at 1479 (cleaned up). The Ninth Circuit held that these allegations gave Campanelli “at least a
6 fair chance of proving that the defendants placed a stigma on his name by signaling him out as a
7 coach who crossed the line dividing acceptable from unacceptable behavior in coaching.” Id. at
8 1480. This is because “a finder of fact could possibly construe the defendants’ statements as
9 accusing Campanelli not just of yelling and cursing at his players, but of engaging in a campaign
10 of abuse devoid of any constructive purpose, calculated instead simply to inflict harm.” Id. In so
11 holding, the Ninth Circuit suggested that accusations that Campanelli yelled or cursed at players—
12 while they might implicate Campanelli’s character—would not alone be sufficient to support a
13 claim that defendants stigmatized his name. Rather, it was “Campanelli’s allegations that
14 defendants charged him with deliberately abusing the ‘kids’ in his charge through incessant,
15 malicious attacks that resulted in psychological damage” that “could be proven to constitute
16 charges of immorality.” Id.
17 Conversely, in Hyland v. Wonder, the Ninth Circuit held that accusations that a public
18 employer accessed and disclosed confidential information were not sufficiently stigmatizing to
19 implicate the Due Process Clause. Hyland involved accusations against a former volunteer with a
20 city juvenile probation department. The plaintiff alleged that the juvenile hall director, after
21 plaintiff’s termination from the volunteer position, told a newspaper, “Just ask Hyland why he
22 can’t be a peace officer in the State of California” and contacted the governor demanding that the
23 plaintiff’s pardon be denied because “Hyland allegedly had unethically released to the public
24 confidential information from juvenile court files.” 972 F.2d at 1133. Accusations of this nature,
25 the Ninth Circuit held, “[were] insufficiently egregious to activate the protections of the Due
26 Process Clause.” Id. at 1142. The Ninth Circuit approved the district court’s reasoning that the
27 “federal Constitution is not concerned with every insult hurled in the heat of an employment
1 somewhat less attractive to future employers,” this possibility was “not enough to implicate the
2 Due Process Clause.” Id.
3 As pleaded, the accusations against Brown were that she leaked the planned nominee for
4 vice mayor to Mahan’s political opponent after the election. Under Campanelli and Hyland, this
5 accusation did not call Brown’s character into question to a degree sufficient to implicate a
6 protected liberty interest. Brown argues that the accusations against her suggested moral turpitude
7 because charges that she leaked confidential information cast her as someone who could not be
8 trusted. While such charges might implicate her character and trustworthiness generally, as in
9 Hyland they are “not the types of charges of immorality, or dishonesty that can cripple an
10 individual’s ability to earn a living.” Hyland, 972 F.2d at 1142. Indeed, the accusation that Brown
11 leaked a planned vice mayor nominee after a political election is far less stigmatizing than the
12 accusation that Hyland had accessed and released confidential juvenile records, and might very
13 well be understood as a frequent occurrence in the rough-and-tumble world of politics. While
14 defendants’ statements may have made Brown “less attractive” to future employers, without more
15 they do not implicate a liberty interest protected by the Due Process Clause.2
16 Brown’s failure to plausibly allege that she was denied the opportunity to respond to any
17 statement sufficiently stigmatizing to implicate a protected liberty interest defeats her ‘stigma-
18 plus’ due process claim under Section 1983. See Chaudhry, 68 F.4th at 1171. Defendants’ motion
19 to dismiss Brown’s claims against the individual defendants is therefore granted with leave to
20 amend.
21 II. Brown fails to state a Monell claim against the City of San José.
22 Stating a claim against a municipal entity under 42 U.S.C. § 1983 is proper when “the
23 action that is alleged to be unconstitutional implements or executes a policy statement, ordinance,
24 regulation, or decision officially adopted and promulgated by that body’s officers.” Monell v.
25
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2 Defendants also move to dismiss Brown’s claim against the individual defendants on the basis of
qualified immunity. In anticipation of any amended complaint, the Court notes its agreement with
27
defendants that Brown must plead facts supporting a claim that defendants could have reasonably
1 Dept. of Soc. Servs. of City of N.Y, 436 U.S. 658, 690 (1978). Plaintiffs must allege an injury not
2 “inflicted solely by its employees or agents,” but instead one caused by the “execution of a
3 government’s policy or custom, whether made by its lawmakers or by those whose edicts or acts
4 may fairly be said to represent.” Id. at 694.
5 Brown alleges that the City of San José is liable under Section 1983 because “defendant
6 Mayor Mahan and defendant Mr. Reed acted under color of law when each deprived plaintiff of
7 her Constitutional rights, and each had final policymaking and decision-making authority from the
8 City of San Jose concerning their conduct, and each was acting as final policymakers and
9 decision-makers for the City of San Jose at the time they were engaged in their conduct, and their
10 conduct was so closely related to the deprivation of plaintiff’s rights as to be a moving force that
11 caused plaintiff’s injury.” Compl. ¶ 51. Additionally, she alleges that the City is liable because
12 “defendants knew of plaintiff’s rights and specifically made a deliberate choice to approve the
13 deprivation of plaintiff’s rights.” Id. ¶ 52.
14 As pleaded, the complaint fails to state a Monell claim against the City of José for at least
15 two reasons. First, Brown has failed to state a predicate constitutional violation for the reasons
16 stated above. Second, even had Brown adequately stated an unconstitutional action for which the
17 City could be liable, the complaint fails to plead adequate facts from which the Court could infer
18 that the alleged action taken by defendants “implements or executes a policy statement, ordinance,
19 regulation, or decision officially adopted or promulgated by” the City’s officers. Monell, 436 U.S.
20 at 690. The complaint does not identify any particular policy, statement, ordinance, regulation, or
21 decision of the City except for Reed’s decision to terminate Brown’s employment and Mahan’s
22 alleged deferral to that ‘judgment.’
23 Brown contends that the basis for Monell liability is Mahan’s ratification of Reed’s
24 decisions related to Brown’s termination. Even if the complaint sufficiently pleaded that Mahan
25 was the final decision-maker with respect to decisions to hire and terminate staff—which it does
26 not—these facts would not be sufficient here, because the basis for the City’s alleged liability is
27 not Brown’s termination itself but rather the making of and subsequent dissemination of the
1 Brown has pleaded no facts from which the Court can infer that Reed and Mahan acted according
2 || to City policy in making and disseminating the alleged stigmatizing statements without permitting
3 her a further opportunity to respond.
4 Brown invokes the Ninth Circuit’s holding in Galbraith v. County of Santa Clara for the
5 || proposition that “a bare allegation” is “sufficient to withstand a motion to dismiss.” 307 F.3d
6 1119, 1127 (9th Cir. 2002). Her reliance on Galbraith, however, is misplaced, as Galbraith cannot
7 survive the Supreme Court’s holdings in Twombly and Iqbal. See Bell Atlantic Corp. v. Twombly,
8 550 U.S. 544, 555-56 (2007); Iqbal, 556 U.S. at 687 (2009). To state a claim for municipal
9 liability under [gbal and Twombly, Brown must plead facts that establish a plausible claim. □□□
10 || Conclusory allegations alone are insufficient.
11 Finally, Brown objects to defendants’ inclusion of a provision of the San José Charter to
12 || support its motion to dismiss her Monell liability claim, alleging that the charter provision
13 constitutes extrinsic evidence outside of the pleadings that cannot be considered on a Rule
14 12(b)(6) motion. The Court, however, may take judicial notice of this document. Fed. R. Evid.
3 15 201(b). While the Court will take judicial notice of the existence and contents of the document at
a 16 || issue, it will not take judicial notice of the underlying truth of any factual assertions therein.
3 17 Additionally, the Court will not draw any conclusions or inferences therefrom, including that the
18 || version provided by defendants was the version of the charter in effect during the period relevant
19 |) to Brown’s claims.
20 CONCLUSION
21 For the foregoing reasons, defendants’ motion to dismiss is granted with leave to amend.
22 || Any amended complaint addressing the deficiencies in the complaint must be filed within 21 days
23 of this Order.
24 IT IS SO ORDERED.
25 Dated: September 11, 2024
26 Ze
27 £ Coy
28 P. Casey Fitts
United States District Judge