Dias v. Elique

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRIAN DIAS; WILLIAM MASON, SR., 

Plaintiffs-Appellants,

v. No. 04-15290

D.C. No.

JOSE ELIQUE; MICHAEL MURRAY;

UNIVERSITY AND COMMUNITY  CV-02-00801-PMP

COLLEGE SYSTEM OF NEVADA; (PAL)

UNIVERSITY OF NEVADA, LAS OPINION

VEGAS,

Defendants-Appellees.



Appeal from the United States District Court

for the District of Nevada

Philip M. Pro, Chief District Judge, Presiding

Argued and Submitted

October 17, 2005—San Francisco, California

Filed February 6, 2006

Before: Stephen Reinhardt and Sidney R. Thomas,

Circuit Judges, and Jane A. Restani*, Chief Judge,

United States Court of International Trade.

Opinion by Judge Restani

*The Honorable Jane A. Restani, Chief Judge, United States Court of

International Trade, sitting by designation.

1351

1354 DIAS v. ELIQUE

COUNSEL

Kirk T. Kennedy, Las Vegas, Nevada, for the plaintiffs-

appellants.

Richard C. Linstrom, General Counsel, and Walter L. Ayers,

Assistant General Counsel, University of Las Vegas, Nevada,

for the defendants-appellees.

OPINION

RESTANI, Judge:

The United States District Court for the District of Nevada

dismissed claims brought under 42 U.S.C. § 1983, along with

pendent state-law claims, by two employees, Sergeant Brian

Dias and Officer William Mason, Sr., who were terminated by

the University of Nevada, Las Vegas, Department of Public

Safety (“UNLV”) after allegedly falsifying time entries in a

Department of Public Safety logbook. The district court found

Appellants’ wrongful termination, retaliation, and related

state-law claims were precluded by a determination made by

a hearing officer from the Nevada State Personnel Commis-

sion (the “Commission”) that UNLV had “just cause” in ter-

minating Appellants. Appellants’ remaining claims not arising

from the termination were dismissed under the doctrine of

qualified immunity. We find that the district court erred in

applying issue preclusion but uphold the district court’s appli-

cation of qualified immunity.

I. BACKGROUND

On September 10, 2001, Lieutenant Rochelle Sax told

Michael Murray, Deputy Director of Public Safety for the

DIAS v. ELIQUE 1355

University of Nevada, Las Vegas, that she suspected Appel-

lants had falsified time entries in the Public Safety Depart-

ment logbook. The next day, Murray reported the allegations

to his superior officer, Chief of Police Jose Elique. On Sep-

tember 17, 2001, the matter was referred to the Nevada Attor-

ney General’s Office, which is responsible for investigating

and prosecuting crimes committed by state employees under

Nev. Rev. Stat. § 228.175. On November 27, 2001, the Attor-

ney General’s Office arranged to interview Appellants. On

April 12, 2002, it sent UNLV a report finding sufficient evi-

dence to place Appellants on leave with pay. The next day,

UNLV informed Mason that he was being put on administra-

tive leave with pay pending conclusion of the Attorney Gen-

eral’s investigation. Dias was similarly suspended on April

16.

On May 7, 2002, Appellants jointly filed suit against

Appellees in the District Court for Clark County, Nevada. On

June 6, Appellees removed the case to federal court. On the

same day, Nevada’s Attorney General charged Appellants

with presenting a fraudulent claim to a public officer, a gross

misdemeanor under Nev. Rev. Stat. § 197.160. On June 10,

2002, Appellants were served with notice of charges recom-

mending dismissal. Appellants waived their right to an infor-

mal pre-disciplinary hearing and on July 1, 2002, UNLV

terminated Appellants’ employment. Appellants sought

review of their termination before a Commission hearing offi-

cer pursuant to Nev. Rev. Stat. § 284.390. A hearing was held

on November 5, 2002, during which both Appellants testified,

as did Murray and two other officers.

At the administrative hearing, Appellants conceded the dis-

crepancies in their reported time, but denied that they had

defrauded UNLV. They claimed that the discrepancies were

the result of an informal “flex-time” policy. They maintained

that their previous supervisor, Chief David Hollenbeck, had

created the flex-time system to provide compensation for time

spent doing non-shift work, such as training, while avoiding

1356 DIAS v. ELIQUE

overtime charges. According to Appellants, flex-time was

subject to an honor system and no formal accounting of time

was required. Murray contradicted Appellants’ testimony,

stating that flex-time was used only to change the start and

end time of a shift and required documentation of the change.

On December 10, 2002, the hearing officer issued a “Find-

ing of Fact, Conclusions of Law and Decision” (the “Determi-

nation”), finding “substantial reliable and probative evidence”

supporting UNLV’s decision to dismiss Appellants. In his

findings of fact, the hearing officer stated that “[t]he evidence

is conclusive that both Sergeant Dias and Officer Mason

entered times into the Sign In/ Sign Out Log Book which

were false.” The hearing officer also found it incredible that

Appellants were not aware that department policy required

accurate reporting of time in the logbook. Furthermore, the

hearing officer found that despite Appellants’ assertions that

their dismissals were retaliatory, “[n]o evidence of disparate

treatment was presented” and “[t]here was no evidence of

retaliation.” In his conclusions of law, however, the hearing

officer stated that he reviewed UNLV’s decision for “substan-

tial evidence of legal cause, and to insure that the Employer

did not act arbitrarily or capriciously, thus abusing its discre-

tion.”

On July 8, 2002, Appellees moved for summary judgment

in federal district court, arguing that the hearing officer’s

determination precluded consideration of Appellants’ civil-

rights claims. Appellants objected that the preclusion defense

had been waived, but the district court allowed Appellees to

supplement the pleadings to assert issue preclusion. The dis-

trict court found that the determination constituted a final

judgment on the merits that resolved the factual issues regard-

ing falsification of records and retaliation. With these issues

resolved against Appellants, the district court granted sum-

mary judgment for Appellees “[t]o the extent [the Complaint]

relie[d] on termination based on false allegations and retalia-

tion,” including Appellants’ pendent state-law claims for

DIAS v. ELIQUE 1357

intentional infliction of emotional distress, negligence, negli-

gent supervision and retaliation. The court also found that

Elique and Murray were entitled to qualified immunity in

connection with the non-precluded claims and dismissed the

remainder of the § 1983 action.

II. STANDARD OF REVIEW

An order granting summary judgment is reviewed de novo

on appeal. Lopez v. Smith, 203 F.3d 1122, 1131 (9th Cir.

2000). We “must determine whether, viewing the evidence in

the light most favorable to the nonmoving party, there are any

genuine issues of material fact and whether the district court

correctly applied the relevant substantive law.” Id.

The availability of issue preclusion is also reviewed de

novo on appeal. Miller v. County of Santa Cruz, 39 F.3d 1030,

1032 (9th Cir. 1994). If we determine that issue preclusion is

available, we then review “for abuse of discretion the district

court’s decision to accord preclusion to the agency’s deci-

sion.” Id. Finally, we review de novo a lower court’s decision

to apply qualified immunity. Sorrels v. McKee, 290 F.3d 965,

969 (9th Cir. 2002).

III. ISSUE PRECLUSION

[1] Federal courts give the same preclusive effect to the

decisions of state administrative agencies as the state itself

would, subject to the “minimum procedural requirements” of

the Due Process Clause of the Fourteenth Amendment.

Kremer v. Chem. Constr. Corp., 456 U.S. 461, 481-82 (1982).

We consider the relevant state-law test to “ensure that, at a

minimum, [an agency decision] meets the state’s own criteria

necessary to require a court of that state to give preclusive

effect to the state agency’s decisions.” Plaine v. McCabe, 797

F.2d 713, 719 (9th Cir. 1986); see Roberts v. Las Vegas Val-

ley Water Dist., 849 F. Supp. 1393, 1399 (D. Nev. 1994)

(applying collateral estoppel to Nevada state agency determi-

1358 DIAS v. ELIQUE

nation if “ ‘the general collateral estoppel criteria apply’ ”)

(quoting Jackson v. Gates, 975 F.2d 648, 656 n.8 (9th Cir.

1992)).

[2] Nevada courts may apply issue preclusion if: 1) the

issue decided in prior litigation is identical to the issue pres-

ented in the current litigation; 2) the initial ruling was on the

merits and is final; and 3) the party against whom the judg-

ment is asserted was a party or in privity with a party to the

prior litigation. LaForge v. State ex rel. Univ. & Cmty. Coll.

Sys., 997 P.2d 130, 133 (Nev. 2000). Nevada gives agency

determinations issue preclusive effect, provided they meet the

requirements of this test. State ex rel. Univ. & Cmty. Coll.

Sys. v. Sutton, 103 P.3d 8, 16 (Nev. 2004).

Applying the Nevada test to this case, we find the last two

requirements are met because Appellants are the same people

who participated in the hearing before the Commission hear-

ing officer and the hearing officer’s determination was final

and on the merits. Nevertheless, we find that issue preclusion

is inappropriate in this case because the hearing officer did

not resolve the same factual issues involved to the same

degree required by Appellants’ § 1983 and related state-law

claims. Specifically, the hearing officer only found that sub-

stantial evidence supported UNLV’s decision to terminate

Appellants, while Appellants are required to prove their

§ 1983 and state-law claims by a preponderance of the evi-

dence.

[3] As a general rule, issue preclusion, unlike claim preclu-

sion, “may be defeated by shifts in the burden of persuasion

or by changes in the degree of persuasion required.” 18

Charles Alan Wright, Arthur R. Miller & Edward H. Cooper,

Federal Practice & Procedure § 4422 (2d ed. 2002); see Lit-

tlejohn v. United States, 321 F.3d 915, 924 (9th Cir. 2003)

(success on Department of Veterans Affairs disability claim

at standard of evidence lower than preponderance not entitled

to preclusive effect in tort claim brought under the Federal

DIAS v. ELIQUE 1359

Tort Claims Act because “[s]uch differences in the burden of

proof . . . prevent issue preclusion”); Clark v. Bear Stearns &

Co., Inc., 966 F.2d 1318, 1322 (9th Cir. 1992) (“[C]ollateral

estoppel does not preclude claims that have a different burden

of proof than previously decided claims . . . .”). See also Cobb

v. Pozzi, 363 F.3d 89, 114 (2d Cir. 2004) (“A party’s success

in an earlier proceeding where it faced a lower burden of

proof does not mean that, against a higher burden of proof in

a subsequent proceeding, that party would achieve the same

result.”); Wimsatt v. Beverly Hills Weight Loss Clinics Int’l,

Inc., 38 Cal. Rptr. 2d 612, 619 (Cal. Ct. App. 1995) (stating

that the court of appeals has squarely held that “collateral

estoppel effect should not have been given the earlier findings

because they were made using a different standard of proof

than required for the later hearing.”).

[4] Although Nevada law is clear that agency determina-

tions may be entitled to issue preclusive effect, see Sutton,

103 P.3d at 16, we have found no Nevada precedent inform-

ing us as to whether Nevada law would allow a factual deter-

mination made under a substantial evidence standard to

preclude litigation of that fact under a higher standard such as

preponderance of the evidence. In the absence of a controlling

decision from a state supreme court, a federal court must

interpret state law as it believes the state’s highest court

would. Gravquick A/S v. Trimble Navigation Int’l Ltd., 323

F.3d 1219, 1222 (9th Cir. 2003). We believe that the Nevada

Supreme Court would endorse the general rule in this situa-

tion.

[5] The district court found that the facts established by the

hearing officer’s determination were the same as those neces-

sary to support a claim under § 1983. An agency determina-

tion that, by a preponderance of the evidence, Appellants

were properly terminated for entering false time reports

(rather than in retaliation for exercise of their First Amend-

ment rights) might preclude relitigation of that issue of evi-

dentiary fact in a § 1983 action; however, the hearing officer

1360 DIAS v. ELIQUE

was not required to find those facts by a preponderance of the

evidence.1 The hearing officer’s determination is specific that

“[e]vidence sufficient to support an administrative decision is

not equated with a preponderance of the evidence, as there

may be cases wherein two conflicting views may each be sup-

ported by substantial evidence.” Essentially, under the sub-

stantial evidence standard, the hearing officer was required to

find only that Appellants’ terminations could either have

resulted from violations of department policy or illegal retali-

ation. This does not resolve the factual issues involved to the

extent necessary regarding the § 1983 action, i.e., whether

Appellants, more likely than not, were terminated in retalia-

tion for protected activities instead of as a result of violations

of department policy.2

This holding does not conflict with our treatment of admin-

istrative determinations in other contexts. For example, in

Miller, we upheld the district court’s decision to grant issue

preclusive effect to an unreviewed determination by the Santa

Cruz County Civil Service Commission that a plaintiff was

justly terminated. 39 F.3d at 1038. The law of California, like

Nevada, holds that unreviewed administrative determinations

are binding and have preclusive effect. See Knickerbocker v.

City of Stockton, 244 Cal. Rptr. 764, 768 (Cal. Ct. App.

1988). Nevertheless, California law provides for more thor-

ough review at the administrative level. See Kolender v. San

1

Cf. State Indus. Ins. Sys. v. Khweiss, 825 P.2d 218, 220 (Nev. 1992)

(holding that under Nevada law “an agency’s conclusions of law . . .

should not be disturbed if they are supported by substantial evidence”).

2

Although the Nevada state courts have not so held, an opinion from the

United States District Court for the District of Nevada has applied issue

preclusion to the determination of a Commission hearing officer in a sub-

sequent § 1983 action. Snow v. Nev. Dep’t of Prisons, 543 F. Supp. 752,

757 (D. Nev. 1982). Snow was decided under a previous version of

§ 284.390 which appears to provide for a de novo hearing before the Com-

mission. See Nev. Rev. Stat. § 284.390(9) (1977) (“If a hearing before the

commission is granted . . . it shall be a hearing de novo.”). Current Nevada

law does not provide for such review.

DIAS v. ELIQUE 1361

Diego County Civil Serv. Comm’n, 34 Cal. Rptr. 3d 209 (Cal.

Ct. App. 2005) (“The Commission’s authority to ‘modify’ the

Sheriff’s disciplinary order under Government Code, section

31108 is more consistent with an independent review than

with substantial evidence review . . . .”) (quotation omitted).

Nevada law, by contrast, allows a hearing officer to determine

only whether the agency’s decision was reasonable and sup-

ported by just cause. See Nev. Rev. Stat. § 284.390(1), (6).

Clements v. Airport Authority of Washoe County, 69 F.3d

321 (9th Cir. 1995), does not require a different outcome. In

that case, two employees of Nevada’s Washoe County Airport

Authority alleged they were terminated in retaliation for

whistle-blowing activities protected by the First Amendment.

Id. at 325. We applied issue preclusion to the legal question

of the plaintiffs’ employment status (at-will or civil service).

Id. at 330. Clements does not govern the outcome of this case

because we there relied on an opinion issued by the Nevada

Supreme Court resolving the precluded issue without defer-

ence to the underlying administrative proceeding. Id. (“The

determination to which we give preclusive effect here is the

Nevada Supreme Court’s ruling that [plaintiff] was an at-will

employee . . . .”). No independent state-court opinion is

involved in this case.

Appellees also cite the district court decision in Roberts for

the proposition that Nevada would grant administrative deter-

minations made under a substantial evidence standard issue

preclusive effect. (Appellees’ Br. 22.) That case involved a

lower evidentiary standard than applies here. In Roberts, the

district court applied issue preclusion to “a substantive due

process claim based upon arbitrary and capricious discharge

from employment.” 849 F. Supp. at 1398. Under Nevada law,

the hearing officer reviewed the agency action for arbitrari-

ness, and therefore application of issue preclusion did not

involve use of different standards of review or burdens of

proof. See Nev. Rev. Stat. § 284.390(1), (6).3 Thus Roberts

does not counsel a different result.

3

Appellants argue in their brief that their complaint alleges a substantive

due process injury resulting from arbitrary and unreasonable termination

1362 DIAS v. ELIQUE

[6] We believe that Nevada would follow the majority of

jurisdictions in finding that decisions made under a substantial

evidence standard of review are not entitled to preclusive

effect in later claims involving a more stringent standard of

proof.4 The district court therefore improperly applied issue

preclusion.

IV. QUALIFIED IMMUNITY

Appellants assert Murray and Elique (the “Supervisors”)

violated their clearly established constitutional rights by initi-

ating an investigation without giving Appellants proper notice

under Nev. Rev. Stat. § 289.060, and by denying them “light

duty” when they returned to work following injury-related

leave under Nev. Rev. Stat. § 281.153. The district court

applied the doctrine of qualified immunity and dismissed

these claims.5

of government employment. (Appellants’ Br. 28-29.) While we have yet

to decide whether to recognize such an action in this circuit, see Portman

v. County of Santa Clara, 995 F.2d 898, 908 (9th Cir. 1993), we need not

decide the question here because the hearing officer’s determination,

which reviewed UNLV’s decision for arbitrariness, would preclude such

a claim. See Roberts, 849 F. Supp. at 1399-1400.

4

We recognize that two of our sister circuits have allowed an exception

to the general rule of issue preclusion in cases where a finder of fact

clearly determined an issue at a more stringent burden of proof than neces-

sary. See Lane v. Sullivan, 900 F.2d 1247, 1251 (8th Cir. 1990); Marlene

Indus. Corp. v. NLRB, 712 F.2d 1011, 1017 (6th Cir. 1983). Neither

Nevada nor the Ninth Circuit has considered this exception, but we note

that the hearing officer’s determination declares that it uses a “substantial

evidence” burden of proof, which would prevent us from finding that his

factual determinations were made at a more stringent burden of proof than

necessary.

5

The district court held, and the parties do not dispute, that the Univer-

sity and Community College System of Nevada, the University of Nevada,

Las Vegas, Elique and Murray cannot be liable under § 1983 in their offi-

cial capacities, because, in that capacity, they are not “persons” within the

definition of that statute. (See Appellants’ Br. 27.)

DIAS v. ELIQUE 1363

To determine whether summary judgment on qualified

immunity was proper, we must first evaluate whether, taking

the facts in the light most favorable to the non-moving parties

and drawing inferences in their favor, those facts establish

that the official’s conduct violated a constitutional right.

Ceballos v. Garcetti, 361 F.3d 1168, 1172 (9th Cir. 2004)

(citing Saucier v. Katz, 533 U.S. 194, 201 (2001)). If so, we

must determine whether the right was clearly established at

the time of the improper act. Id. If the right was clearly estab-

lished, we must determine whether the official’s actions were

the result of a reasonable mistake of fact or law. Id.

[7] Appellants contend that Nev. Rev. Stat. § 289.060

required the Supervisors to notify Appellants at the outset of

the Attorney General’s investigation.6 The language of the

statute appears to provide that it is the agency conducting the

investigation — in this case, the Attorney General’s Office —

that must notify a peace officer prior to any interrogation or

hearing it conducts. The subsequent amendments to the stat-

ute further support this conclusion. In its 2005 amendments to

§ 289.060, the Nevada legislature stated that “[e]xisting law

requires a law enforcement agency, if practical, to notify a

peace officer in writing within a reasonable time before inter-

rogating or holding a hearing . . . .”. 2005 Nev. Stat. Ch. 195,

A.B. No. 259 (Legislative Counsel’s Digest) (emphasis

added). Therefore, it appears that under Nevada law, the

responsibility for notifying Appellants was that of the Attor-

ney General’s Office, and the Supervisors did not violate

Appellants’ constitutional rights by failing to do so. In any

event, even if we were to assume that the Supervisors violated

Appellants’ due process rights, they would still be entitled to

qualified immunity because Appellants have not demonstrated

6

Nev. Rev. Stat. § 289.060(1) (amended 2005) states:

The agency shall, within a reasonable time before any interroga-

tion or hearing is held relating to an investigation of the activities

of a peace officer which may result in punitive action, provide

written notice to the officer if practical under the circumstances.

1364 DIAS v. ELIQUE

that such a right was clearly established. A reasonable reading

of the statute suggests that an agency need provide notice only

when the agency itself conducts an interrogation or holds a

hearing in connection with an investigation; there is no

Nevada case law to the contrary. Therefore, at the time of the

Attorney General’s investigation, it was not clear to a reason-

able official holding an office such as was held by the Super-

visors that he must notify a peace officer prior to an

interrogation or hearing conducted by another agency.

Appellants also contend that their constitutional rights were

violated by their Supervisors’ refusal to grant them “light

duty” status upon their return from injury leave. The statute

providing for light work is discretionary. Nev. Rev. Stat.

§ 281.153(2)(b) (an employer “[m]ay allow a police officer or

fireman to return to light-duty employment”) (amended

2005). Appellants cannot assert a property interest in a discre-

tionary benefit. Thornton v. City of St. Helens, 425 F.3d 1158,

1164 (9th Cir. 2005) (“[A] statute that grants the reviewing

body unfettered discretion to approve or deny an application

does not create a property right.”).

In their brief, Appellants argue that they had “clearly estab-

lished federal rights and property/liberty interests in their con-

tinued employment with UNLV which were negatively and

detrimentally impaired by the wrongful termination proceed-

ings against them.” (Appellants’ Br. 28.) This may be con-

strued as a claim that Appellants were denied a clearly

established procedural due process right to a hearing prior to

adverse employment action. See Cleveland Bd. of Educ. v.

Loudermill, 470 U.S. 532, 545 (1985). With respect to their

April suspensions, Appellants had no clearly-established due

process right to a pre termination hearing because they were

put on leave with pay. See id. Nor did Appellants’ final termi-

nations violate a clearly established due process right because

Appellants were offered, but declined to attend, an informal

hearing prior to their final terminations in July 2002.

DIAS v. ELIQUE 1365

[8] Therefore, the district court did not err in holding that

the Supervisors are entitled to qualified immunity on these

claims.

V. CONCLUSION

Because the district court erred in applying issue preclusion

to the hearing officer’s determination, the order granting sum-

mary judgment on the basis of issue preclusion is

REVERSED and the action is REMANDED to the district

court. The district court’s dismissal of the remaining claims

under the doctrine of qualified immunity is AFFIRMED.