Wabakken v. California Department of Corrections & Rehabilitation

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

DAVID WABAKKEN, No. 13-56075

Plaintiff-Appellant,

D.C. No.

v. 2:12-cv-01503-

GW-DTB

CALIFORNIA DEPARTMENT OF

CORRECTIONS AND

REHABILITATION; J. W. MORGAN; OPINION

GEORGE DIMAGGIO; GARY GROVER;

KEITH MAYFIELD; FRANK CHAVEZ;

FRANK MARTINEZ,

Defendants-Appellees.

Appeal from the United States District Court

for the Central District of California

George H. Wu, District Judge, Presiding

Argued and Submitted

May 8, 2015—Pasadena, California

Filed September 14, 2015

Before: Harry Pregerson, Richard C. Tallman,

and Jacqueline H. Nguyen, Circuit Judges.

Opinion by Judge Pregerson

2 WABAKKEN V. CAL. DEP’T OF CORR. & REHAB.

SUMMARY*

Collateral Estoppel

The panel reversed the district court’s summary judgment

in favor of prison officials in an action brought by a former

employee of the California Department of Corrections and

Rehabilitation, alleging violations of 42 U.S.C § 1983 and

California’s Whistleblower Protection Act, and intentional

infliction of emotional distress.

The district court found that the plaintiff was collaterally

estopped from relitigating the whistleblower retaliation issue

because it had been litigated during State Personnel Board

proceedings.

The panel held that, pursuant to State Board of

Chiropractic Examiners v. Superior Court, 45 Cal. 4th 963,

976 (2009), the State Personnel Board’s decision did not have

preclusive effect under theories of res judicata and collateral

estoppel and thus did not prevent the plaintiff from litigating

his whistleblower retaliation damages claim in the district

court.

COUNSEL

Derek T. Anderson (argued), Attorney at Law, San Diego,

California, for Plaintiff-Appellant.

*

This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

WABAKKEN V. CAL. DEP’T OF CORR. & REHAB. 3

Mark Schreiber (argued), Deputy Attorney General; Kamala

D. Harris, Attorney General; Alicia M. B. Fowler, Senior

Assistant Attorney General; Jerald L. Mosley, Supervising

Deputy Attorney General; and Patricia Nevonen, Deputy

Attorney General; California Department of Justice, Los

Angeles, California, for Defendants-Appellees.

OPINION

PREGERSON, Circuit Judge:

Appellant David Wabakken was a Lieutenant with the

California Department of Corrections and Rehabilitation

(“Corrections Department”). Between August 2010 and April

2011, the Corrections Department sent Wabakken three

notices of adverse action, each of which contained multiple

charges of misconduct. The third notice of adverse action

resulted in Wabakken’s dismissal from employment with the

Corrections Department. Wabakken appealed the three

adverse actions to the California State Personnel Board.

The Administrative Law Judge (“ALJ”) determined that

the Corrections Department failed to establish by a

preponderance of the evidence the charges against Wabakken

in the first and second notices of adverse action. The ALJ also

determined that the Corrections Department had proved by a

preponderance of the evidence some of the less serious

charges of misconduct alleged in the third notice of adverse

action, but that dismissal from employment was too harsh a

penalty. The State Personnel Board adopted the ALJ’s

decision.

4 WABAKKEN V. CAL. DEP’T OF CORR. & REHAB.

Wabakken filed suit in the United States District Court

against the Corrections Department, J.W. Morgan, George

DiMaggio, Gary Grover, Keith Mayfield, Frank Chavez,

Frank Martinez, and Does 1–10 (“Defendants”) alleging

violations of both 42 U.S.C. § 1983 and California

Government Code § 8547 (known as the California

Whistleblower Protection Act) and intentional infliction of

emotional distress. Defendants moved for summary

judgment, arguing that the State Personnel Board’s decision

precluded further litigation of these issues under collateral

estoppel.

The district court granted the Defendants’ motion for

summary judgment finding Wabakken was collaterally

estopped from relitigating the whistleblower retaliation issue

because it had been litigated during the State Personnel Board

proceedings. We reverse because, pursuant to State Board of

Chiropractic Examiners v. Superior Court, 45 Cal. 4th 963,

976 (2009), the State Personnel Board’s decision does not

have preclusive effect under theories of res judicata and

collateral estoppel and thus does not prevent Wabakken from

litigating his whistleblower retaliation damages claim in the

district court.

BACKGROUND

Appellant David Wabakken started working for the

Corrections Department around September 1995. Wabakken

was promoted to Correctional Sergeant in 2000 and

Correctional Lieutenant in 2004. In June 2007, Wabakken

was transferred to Pilot Rock Conservation Camp. Pilot Rock

is a Corrections Department camp where the inmates “have

less direct supervision and more freedom than inmates housed

at institutions.”

WABAKKEN V. CAL. DEP’T OF CORR. & REHAB. 5

Between June 18, 2007, and May 6, 2011, Wabakken

disclosed alleged improper governmental activities to his

superiors including the following: negligent supervision of

inmates resulting in the temporary escape of one inmate;

exhibiting a movie to inmates that violated the Corrections

Department policy; attempts to collect overtime for work not

done; and allowing contraband into the camp. During the

period that Wabakken made these disclosures, he received

three notices of adverse action.

On August 5, 2010, Wabakken received his first notice of

adverse action. This notice alleged that Wabakken had

discussed the contents of an interview regarding another

Correctional Officer’s misconduct with the officer under

investigation, in violation of the interviewer’s instructions.

Wabakken received a 5% reduction in salary for 36 months

and was transferred to another Corrections Department

facility.

On April 6, 2011, Wabakken received his second notice

of adverse action. The second notice alleged that he

“repeatedly made racially derogatory comments about staff,

inmates, and others[;] . . . repeatedly made derogatory

comments about an employee’s age;” and dishonestly denied

these allegations. As a result, Wabakken was demoted from

Correctional Lieutenant to Correctional Officer.

On April 22, 2011, Wabakken received his third and final

notice of adverse action. The third notice accused Wabakken

of the following: transporting inmates to family residences to

retrieve items; using an unauthorized carpet cleaner at Pilot

Rock; encouraging an inmate to place his penis through a

PVC pipe; falsifying an inmate violation report; exposing his

buttocks to inmates; using Corrections Department equipment

6 WABAKKEN V. CAL. DEP’T OF CORR. & REHAB.

for personal purposes; bringing an inappropriate DVD to Pilot

Rock and showing it to inmates; falsifying a report about a

Correctional Officer’s conduct; making inappropriate racial

and sexual comments to inmates and staff; and dishonestly

denying this conduct. The third notice of adverse action

resulted in his dismissal from service with the Corrections

Department on May 6, 2011.

The California State Personnel Board reviews disciplinary

actions taken against state employees. State Pers. Bd. v. Dep’t

of Pers. Admin., 37 Cal. 4th 512, 521 (2005). Wabakken

appealed the three adverse actions to the State Personnel

Board and the Board consolidated the three matters for

hearing. Wabakken raised multiple affirmative defenses to

the charges that formed the basis for his discipline. The

affirmative defense relevant to this appeal is Wabakken’s

defense that the adverse actions taken against him by the

Corrections Department constituted “retaliation for testifying

against [the Corrections Department’s] witnesses.” California

Government Code § 8547.8(e) provides that an employee can

use whistleblower retaliation as “a complete affirmative

defense.”

Section 8547.8(a) allows employees to use whistleblower

retaliation as a legal sword to file complaints against

employers. In September 2011, Wabakken filed a

whistleblower retaliation complaint with the State Personnel

Board alleging that the Defendants retaliated against him

after he made protected disclosures of their improper

government activities. Wabakken sought damages and

requested the State Personnel Board to take disciplinary

action against the Defendants. On October 20, 2011, the State

Personnel Board dismissed Wabakken’s whistleblower

retaliation complaint after determining that he had failed to

WABAKKEN V. CAL. DEP’T OF CORR. & REHAB. 7

demonstrate that the adverse actions taken against him by the

Corrections Department were in retaliation for his protected

disclosures. See Cohen v. Fred Meyer, Inc., 686 F.2d 793,

796 (9th Cir. 1982) (a prima facie case of retaliation requires

a showing that “a causal link exists between” the protected

disclosures and the adverse employment action).

During the pre-hearing conference regarding Wabakken’s

appeal of the Corrections Department’s disciplinary actions,

the Corrections Department attempted to bar Wabakken from

presenting whistleblower retaliation as an affirmative

defense. The ALJ denied the Corrections Department’s

motion because even though Wabakken’s attempt to use

whistleblower retaliation as a sword had failed, that did not

preclude Wabakken “from asserting retaliation as an

affirmative defense to the charges at hearing.”

The merits hearing before the ALJ1 took place from June

4–8, and June 11–13, 2012. The ALJ issued a 49-page

decision. The ALJ determined that the Corrections

Department had failed to establish by a preponderance of the

evidence the charges against Wabakken in the first and

second notices of adverse action. However, the ALJ

determined that the Corrections Department had proved by a

preponderance of the evidence some of the less serious

charges of misconduct alleged in the third notice of adverse

1

Two different ALJs presided over Wabakken’s case. ALJ Douglas A.

Purdy presided over the hearing on the merits and rendered the decision,

while ALJ Gregory W. Brown presided over the pre-hearing conference.

8 WABAKKEN V. CAL. DEP’T OF CORR. & REHAB.

action, but that his dismissal was too harsh a penalty.2 The

ALJ found that a salary reduction for one year was the

appropriate penalty.

The ALJ also explicitly addressed three of Wabakken’s

affirmative defenses, but did not address his whistleblower

retaliation defense. The State Personnel Board adopted and

accepted the ALJ’s decision.

On September 7, 2012, in the United States District Court

Wabakken filed a second amended complaint against the

Corrections Department, the warden at Pilot Rock, and

several other correctional officers. His second amended

complaint alleged violation of the Whistleblower Protection

Act (Cal. Gov’t. Code § 8547), intentional infliction of

emotional distress, and violation of 42 U.S.C. § 1983.3 The

Defendants moved for summary judgment arguing that the

State Personnel Board decision precluded further litigation of

these issues under res judicata (claim preclusion) and

collateral estoppel (issue preclusion). The district court

rejected Defendants’ res judicata argument. The Defendants

2

The ALJ found that the Corrections Department had proved by a

preponderance of the evidence that Wabakken participated in the

following misconduct, and thus that there was cause for at least some of

his discipline: used a state vehicle and state camera for personal purposes

while on duty; posed for an inappropriate photo while in an office at Pilot

Rock; and brought a DVD to Pilot Rock for training purposes that had not

been approved.

3

Each of these claims was based on the Defendants’ alleged retaliation

against Wabakken for disclosing improper government activities. The

court granted Defendants’ motion to dismiss the fourth claim for relief

during the pleading stage.

WABAKKEN V. CAL. DEP’T OF CORR. & REHAB. 9

do not challenge the district court’s decision on the res

judicata issue.

The district court, however, applied collateral estoppel

and concluded that whether adverse employment action was

taken against Wabakken as a result of whistleblower

retaliation had been litigated and decided against Wabakken

during the State Personnel Board proceedings. The district

court reasoned that the whistleblower retaliation issue before

it was identical to the issue considered by the State Personnel

Board. In addition, the district court determined that the issue

was actually litigated because Wabakken raised

whistleblower retaliation as an affirmative defense and

submitted evidence to support this defense. Further, the

district court found that the ALJ necessarily decided the

whistleblower retaliation issue against Wabakken because the

ALJ applied the preponderance of the evidence standard

which is consistent with a rejection of the retaliation defense.

Under California Government Code § 8547.8(e), the

initial burden of going forward with the evidence rests with

the employee. The employee must produce evidence

sufficient to support a finding based on the preponderance

standard that whistleblower retaliation occurred. If the

employee meets this initial burden, then the burden shifts to

the employer to prove by clear and convincing evidence that

retaliation was not the reason for the adverse employment

action. Cal. Gov’t Code § 8547.8(e). Because the ALJ

employed the preponderance standard when considering

whether the adverse employment actions were warranted, and

not the clear and convincing standard, the district court

determined that the ALJ had implicitly decided the

whistleblower retaliation issue against Wabakken because he

had failed to meet his initial burden of showing under the

10 WABAKKEN V. CAL. DEP’T OF CORR. & REHAB.

preponderance standard evidence sufficient to support a

finding that whistleblower retaliation occurred.

In short, the district court reasoned that because the ALJ

failed to apply the clear and convincing standard, the ALJ

implicitly “never found sufficient credence in [Wabakken’s]

retaliation-based affirmative defense.” For these reasons, the

district court granted the Defendants’ motion for summary

judgment. Wabakken timely appealed.

STANDARD OF REVIEW

The Ninth Circuit reviews a district court’s grant of

summary judgment de novo. Travelers Cas. & Sur. Co. of

Am. v. Brenneke, 551 F.3d 1132, 1137 (9th Cir. 2009).

Summary judgment should be granted “if the pleadings, the

discovery and disclosure materials on file, and any affidavits

show that there is no genuine issue as to any material fact and

that the movant is entitled to judgment as a matter of law.” Id.

(internal quotation mark omitted) (citing Fed. R. Civ. P.

56(c)). Wabakken conceded before the district court, and

again before us in his reply brief, that he raised retaliation as

an affirmative defense before the State Personnel Board, so

there was no genuine dispute as to any material fact. Whether

the Defendants were entitled to judgment as a matter of law

is all that is in dispute.

Whether collateral estoppel bars a party’s claims “is a

mixed question of law and fact in which legal issues

predominate.” United States v. Geophysical Corp. of Alaska,

732 F.2d 693, 697 (9th Cir. 1984). Thus, whether or not

collateral estoppel applies is reviewed de novo. Id. “If

collateral estoppel is available, this court reviews the district

court’s decision giving preclusive effect to the determination

WABAKKEN V. CAL. DEP’T OF CORR. & REHAB. 11

of the municipal hearing officer for abuse of discretion.”

Eilrich v. Remas, 839 F.2d 630, 632 (9th Cir. 1988).

DISCUSSION

The doctrine of collateral estoppel, or issue preclusion, is

“grounded on the premise that ‘once an issue has been

resolved in a prior proceeding, there is no further fact-finding

function to be performed.’” Murray v. Alaska Airlines, Inc.,

50 Cal. 4th 860, 864 (2010) (quoting Parklane Hosiery Co. v.

Shore, 439 U.S. 322, 336 n.23 (1979)). Collateral estoppel

both “protect[s] litigants from the burden of relitigating an

identical issue with the same party or his privy and . . .

promot[es] judicial economy, by preventing needless

litigation.” Id. (quoting Parklane Hosiery Co., 439 U.S. at

326).

Collateral estoppel bars “relitigation of an issue decided

at a previous proceeding if (1) the issue necessarily decided

at the previous [proceeding] is identical to the one which is

sought to be relitigated; (2) the previous [proceeding] resulted

in a final judgment on the merits; and (3) the party against

whom collateral estoppel is asserted was a party or in privity

with a party at the prior [proceeding].” People v. Carter,

36 Cal. 4th 1215, 1240 (2005) (alterations in original)

(internal quotation marks omitted). “[O]nly issues actually

litigated in the initial action may be precluded from the

second proceeding under the collateral estoppel doctrine.” Id.

(citation omitted). “An issue is actually litigated [w]hen [it]

is properly raised, by the pleadings or otherwise, and is

submitted for determination, and is determined.” Id. (quoting

People v. Sims, 32 Cal.3d 468, 484 (1982)) (internal

quotation marks omitted).

12 WABAKKEN V. CAL. DEP’T OF CORR. & REHAB.

Significantly, under California Supreme Court precedent,

“a court may not give preclusive effect to the decision in a

prior proceeding if doing so is contrary to the intent of the

legislative body that established the proceeding in which res

judicata or collateral estoppel is urged.” State Bd. of

Chiropractic Exam’rs v. Superior Court, 45 Cal. 4th 963, 976

(2009) (citations omitted). We find that Wabakken should not

have been collaterally estopped from pursuing his

whistleblower retaliation claim in district court.

In State Board of Chiropractic Examiners, a case with a

similar procedural history, the California Supreme Court held

that “the Legislature did not intend the State Personnel

Board’s findings [in a whistleblower retaliation case] to have

a preclusive effect against the complaining employee.” Id.

When the Legislature drafted the California Whistleblower

Protection Act it “expressly authorized a damages action in

superior court for whistleblower retaliation (§ 8547.8(c)), and

in doing so it expressly acknowledged the existence of the

parallel administrative remedy” with the State Personnel

Board. Id. As a prerequisite to the damages action authorized

in § 8547.8(c), the Whistleblower Protection Act requires the

filing of a complaint with the State Personnel Board. See Cal.

Gov’t Code § 8547.8(c) (“[A]ny action for damages shall not

be available to the injured party unless the injured party has

first filed a complaint with the State Personnel Board

pursuant to subdivision (a), and the board has issued, or failed

to issue, findings pursuant to Section 19683.”).

The employee in State Board of Chiropractic Examiners

filed a complaint alleging whistleblower retaliation with the

State Personnel Board. 45 Cal. 4th at 969. After conducting

an investigation the State Personnel Board’s executive officer

issued a 16-page “Notice of Findings” recommending

WABAKKEN V. CAL. DEP’T OF CORR. & REHAB. 13

dismissal of the complaint. Id. Then the employee brought

suit in state court under the same whistleblower retaliation

theory. Id. at 970. The California Supreme Court held she

was not precluded from bringing this claim in court, even

though the State Personnel Board decision was not in her

favor. Id. at 978.

The California Supreme Court held that § 8547.8(c)

“means what it says: An employee complaining of

whistleblower retaliation may bring an action for damages in

superior court, but only after the employee files a complaint

with the State Personnel Board and the board ‘has issued, or

failed to issue, findings.’” Id. (quoting § 8547.8(c)) (emphasis

omitted). Thus, once the State Personnel Board has issued

findings, or failed to do so, “the employee may proceed with

a damages action in superior court regardless of whether the

[State Personnel Board’s] findings are favorable or

unfavorable to the employee.” Id.

“When interpreting state law, federal courts are bound by

decisions of the state’s highest court.” In re Bartoni-Corsi

Produce, Inc., 130 F.3d 857, 861 (9th Cir. 1997) (quoting

Lewis v. Tel. Emps. Credit Union, 87 F.3d 1537, 1545 (9th

Cir. 1996)). Thus, the California Supreme Court’s

interpretation of § 8547.8 is binding.

Here, Wabakken filed a complaint with the State

Personnel Board alleging whistleblower retaliation, and the

complaint was dismissed by a State Personnel Board

executive officer. Thus, after filing his complaint with the

State Personnel Board and receiving an unfavorable

dismissal, Wabakken was eligible to seek relief in court under

§ 8547.8(c).

14 WABAKKEN V. CAL. DEP’T OF CORR. & REHAB.

Around the same time that Wabakken filed the

whistleblower retaliation complaint with the State Personnel

Board, he filed a claim challenging the disciplinary actions

taken against him by the Corrections Department. The ALJ

also held a merits hearing on whether the Corrections

Department’s discipline of Wabakken was warranted.

Wabakken raised whistleblower retaliation as an affirmative

defense to the disciplinary actions taken against him by the

Corrections Department. The ALJ’s decision upholding some

of the discipline was adopted by the State Personnel Board.

State Board of Chiropractic Examiners explains that

§ 8547.8(c) explicitly reserves a whistleblower retaliation

cause of action in a court for employees. Thus, the decisions

by the State Personnel Board in Wabakken’s case similarly

have no preclusive effect. Even if the State Personnel Board’s

merits decisions were unfavorable to Wabakken,4 they do not

prevent Wabakken from seeking relief on his retaliation claim

in court. See id. at 977 (“[T]he . . . conclusion that the State

Personnel Board’s findings are binding in a court action for

damages under Government Code section 8547.8(c) would

unduly restrict that remedy.”).

CONCLUSION

California Government Code § 8547, California’s

Whistleblower Protection Act, as interpreted by the California

Supreme Court, provides employees with the ability to file

4

We do not reach the issue whether the State Personnel Board decision

rejected Wabakken’s whistleblower retaliation affirmative defense

because even if it did, Wabakken still is not precluded from bringing a

whistleblower claim in court. See State Bd. of Chiropractic Examiners,

45 Cal. 4th at 978 (“[T]he employee may proceed with a damages action

in superior court regardless of whether the [State Personnel Board’s]

findings are favorable or unfavorable to the employee.”).

WABAKKEN V. CAL. DEP’T OF CORR. & REHAB. 15

whistleblower retaliation claims in court after filing a

complaint with the State Personnel Board, regardless of the

favorability of the State Personnel Board’s decision to the

employee. Thus, State Personnel Board decisions do not have

preclusive effect and the district court erred in granting the

Defendants’ summary judgment motion.

REVERSED AND REMANDED.