Conrad v. United States

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

JAMES C. CONRAD,  No. 04-15402

Plaintiff-Appellant,

v.  D.C. No.

CV-00-05568-AWI

UNITED STATES OF AMERICA,

OPINION

Defendant-Appellee.



Appeal from the United States District Court

for the Eastern District of California

Anthony W. Ishii, District Judge, Presiding

Argued and Submitted

April 4, 2006—San Francisco, California

Filed May 10, 2006

Before: Alfred T. Goodwin, Betty B. Fletcher, and

Raymond C. Fisher, Circuit Judges.

Opinion by Judge Goodwin

5277

CONRAD v. UNITED STATES 5281

COUNSEL

Brian C. Leighton, Clovis, California, for the plaintiff-

appellant.

Catherine J. Cerna, Assistant United States Attorney, Sacra-

mento, California, for the defendant-appellee.

OPINION

GOODWIN, Circuit Judge:

After he was unsuccessfully prosecuted on charges involv-

ing an illegal gambling operation, James C. Conrad, a twenty-

six-year veteran police officer, brought a Federal Tort Claims

Act (“FTCA”) action against the federal government alleging

false arrest, false imprisonment, abuse of process, and mali-

cious prosecution. Conrad now appeals a summary judgment

in favor of the government and a judgment on the merits in

favor of the government. Finding no reversible error, we

affirm.

Conrad’s appeal assigns error to three rulings by the district

court: (1) the summary judgment extinguishing his false

imprisonment claim, (2) the findings of fact supporting the

judgment that dismissed his malicious prosecution claim, and

(3) the judgment dismissing his malicious prosecution claim.

I. Factual and Procedural Background

During the course of a combined investigation by the Inter-

nal Revenue Service (“IRS”) and the Fresno County Sheriff’s

Department, Conrad became a suspect in an alleged illegal

gambling operation at a Fresno bar and grill known as the

Elbow Room. During the ten months of the investigation,

investigating officers came to believe that Conrad had

5282 CONRAD v. UNITED STATES

employed his knowledge of, and access to, state and local

police information services to learn that an undercover inves-

tigator, who was also an officer in a neighboring city police

department, had infiltrated the Elbow Room gambling opera-

tion. The investigators also came to believe that Conrad had

“blown the cover” of their undercover man, rendering him

useless, and the investigation compromised.

In due course, IRS Agent Linda Osuna, working with sher-

iff’s deputies and an Assistant United States Attorney

(“AUSA”), prepared a twenty-eight page affidavit and

obtained from a federal magistrate judge search and arrest

warrants. Conrad was among those arrested. The arrests were

accomplished on a Wednesday afternoon. Federal magistrate

judges at that time conducted arraignments in Fresno only on

Mondays, Wednesdays, and Fridays, at 11:00 a.m. The arrest-

ing officers and the AUSA in charge of the investigation

made no effort to arrange a special arraignment for Conrad.

Accordingly, he was not arraigned until the following Friday

at the usual 11:00 a.m. time. This 44.5 hour delay in taking

Conrad before a magistrate judge became the central issue in

Conrad’s civil action, and in this appeal.

Agent Osuna testified before the grand jury that later

indicted Conrad. The indictment charged: (1) conducting, and

aiding and abetting, an illegal gambling business in violation

of 18 U.S.C. § 1955; (2) conspiracy to operate an illegal gam-

bling business in violation of 18 U.S.C. §§ 371, 1955; and (3)

conspiracy to obstruct an agency investigation in violation of

18 U.S.C. § 1505.

Agent Osuna also testified at Conrad’s criminal trial. After

the government rested, Conrad and his co-defendants filed a

Federal Rule of Criminal Procedure 29 motion for judgment

of acquittal with respect to counts one and two of the indict-

ment. The district court granted the motion because the gov-

ernment had failed to introduce any evidence that, for thirty

consecutive days, the gambling operation had five members.

CONRAD v. UNITED STATES 5283

See 18 U.S.C. § 1955(b)(1)(ii)-(iii). Following the acquittal on

counts one and two, the AUSA dismissed count three. On

March 5, 1998, Conrad was exonerated.

On July 15, 1999, Conrad filed a claim with the IRS seek-

ing damages for Agent Osuna’s handling of his criminal case.

The IRS denied Conrad’s claim on October 29, 1999. Having

let the statute of limitations run on any Bivens claim he might

have filed, Conrad commenced this action against the govern-

ment under the FTCA. He named Agent Osuna as a defendant

in her official capacity. He sought damages for: (1) false

arrest; (2) false imprisonment; (3) abuse of process; and (4)

malicious prosecution. He did not sue the AUSA, who was

protected by prosecutorial immunity.

As a basis for his false arrest claim, Conrad alleged that

Agent Osuna knowingly lied in the affidavit she presented to

the magistrate judge who issued his arrest warrant. Conrad

further alleged that the false arrest led to his false imprison-

ment and, alternatively, that he was falsely imprisoned

because Agent Osuna failed to present him to a magistrate

judge the same day he was arrested. Conrad’s abuse of pro-

cess claim was also premised on Agent Osuna’s alleged lies.

Conrad further alleged that Agent Osuna abused process by

continuing to lie throughout her grand jury testimony and trial

testimony. Conrad’s malicious prosecution claim was prem-

ised on the same facts as those he alleged in support of his

abuse of process claim.

II. The Civil Action

Before trial, the district court granted summary judgment in

favor of the government with respect to the false arrest and

abuse of process claims. The district court also granted that

part of the government’s motion for summary judgment relat-

ing to Conrad’s first theory of false imprisonment: that the

alleged lies leading to the false arrest also established false

imprisonment. Initially, however, the district court did not

5284 CONRAD v. UNITED STATES

grant the government’s summary judgment motion on Con-

rad’s second theory of false imprisonment: that the delay in

presenting Conrad to a magistrate judge for arraignment

established false imprisonment. The latter question was

resolved, in the government’s favor, when the district court

determined that the delay in taking Conrad to a magistrate

judge was protected by the discretionary function exception to

the FTCA. Accordingly, both theories of Conrad’s false

imprisonment claim were disposed of on summary judgment.

Only Conrad’s malicious prosecution claim remained to be

tried.

The district court held a six-day bench trial. Seven wit-

nesses, including Conrad and Agent Osuna, testified. Con-

rad’s malicious prosecution claim turned on whether Agent

Osuna lied in her affidavit, lied to the magistrate judge, and

lied in her grand jury testimony. The district court made find-

ings of fact that Agent Osuna did not knowingly: (1) lie in her

affidavit; (2) lie to the magistrate judge; or (3) lie in her grand

jury testimony. The district court did find that there were mis-

takes both in Agent Osuna’s affidavit and in her testimony

before the grand jury. However, the district court found that

those mistakes were honest and that there was no proof that

Agent Osuna intentionally misrepresented the truth because of

malice towards Conrad. The district court then entered judg-

ment for the government and against Conrad.

III. Issues on Appeal

As noted, Conrad challenges three rulings: (1) the order

granting the government summary judgment with respect to

his second theory of false imprisonment; (2) the findings of

fact supporting the judgment in favor of the government on

the malicious prosecution claim; and (3) the judgment in

favor of the government on the malicious prosecution claim.

a. Claim of False Imprisonment

[1] The United States can be sued only to the extent that it

has waived its sovereign immunity. Reed v. United States

CONRAD v. UNITED STATES 5285

Dep’t of Interior, 231 F.3d 501, 504 (9th Cir. 2000). The

FTCA grants such a waiver and authorizes suits against the

United States . . . for injury or loss of property, or

personal injury or death caused by the negligent or

wrongful act or omission of any employee of the

Government while acting within the scope of his

office or employment, under circumstances where

the United States, if a private person, would be liable

to the claimant in accordance with the law of the

place where the act or omission occurred.

28 U.S.C. § 1346(b)(1).

[2] There are, however, a number of exceptions to this

broad waiver of sovereign immunity. Berkovitz v. United

States, 486 U.S. 531, 535 (1988). The exception relevant to

the present case is the discretionary function exception, which

maintains the United States’ sovereign immunity for “[a]ny

claim . . . based upon the exercise or performance or the fail-

ure to exercise or perform a discretionary function or duty on

the part of a federal agency or an employee of the Govern-

ment, whether or not the discretion involved is abused.” 28

U.S.C. § 2680(a). The discretionary function exception marks

the boundary between Congress’ willingness to impose tort

liability on the United States and the desire to protect certain

decision-making from judicial second-guessing. See

Berkovitz, 486 U.S. at 536-37.

[3] In assessing whether the discretionary function excep-

tion applies to a particular case, we look to “the nature of the

conduct, rather than the status of the actor,” and assess the

conduct in two ways. Id. at 536 (quoting United States v.

Varig Airlines, 467 U.S. 797, 813 (1984)). First, the question

is whether the action taken by the government employee is a

matter of judgment. Id. (“[C]onduct cannot be discretionary

unless it involves an element of judgment or choice.”). The

discretionary function exception will not apply if there exists

5286 CONRAD v. UNITED STATES

a statute, regulation, or policy mandating particular conduct

by a government employee and the statute, regulation, or pol-

icy does not allow for the exercise of discretion in fulfilling

that mandate. Id. The exception will not apply in such a case

because the government employee will have no choice but to

follow the mandatory directive. Id.

[4] Second, once it has been determined that the challenged

conduct involves an element of discretion, the question is

whether the discretion is the type of decision-making that the

discretionary function exception was designed to protect. Id.

The purpose of the discretionary function exception is “to pre-

vent judicial second-guessing of legislative and administrative

decisions grounded in social, economic, and political policy

through the medium of an action in tort.” Id. at 536-37 (quot-

ing Varig Airlines, 467 U.S. at 814). Therefore, the discretion-

ary function exception will apply if the discretionary decision

made is a permissible exercise of policy judgment. Id.

In this case, Conrad argues that the discretionary function

exception was not applicable because Agent Osuna was pro-

scribed from exercising any judgment or choice in determin-

ing when to present Conrad to a magistrate judge for

arraignment. According to Conrad, Agent Osuna’s choice was

proscribed by the mandatory directives contained in Federal

Rule of Criminal Procedure 5(a) (“Rule 5(a)”) and Internal

Revenue Manual (“IRM”) Proposition 9.4.12.14.1

[5] Rule 5(a) requires that “[a] person making an arrest

within the United States must take the defendant without

unnecessary delay before a magistrate judge, or before a state

or local judicial officer as Rule 5(c) provides, unless a statute

provides otherwise.” FED. R. CRIM. P. 5(a) (emphasis added).

Similarly, IRM 9.4.12.14 requires that “[a] special agent who

makes an arrest, whether with or without an arrest warrant,

must take the arrested person, without unnecessary delay,

1

The parties cited this rule as IRM 9447.7.

CONRAD v. UNITED STATES 5287

before the nearest available US magistrate or other nearby

officer empowered to commit persons charged with offenses

against the laws of the United States.” I.R.S. Internal Revenue

Manual 9.4.12.14 (July 30, 2004) (emphasis added). The sim-

ilarities between Rule 5(a) and IRM 9.4.12.14 are striking;

IRM 9.4.12.14 even cites Rule 5. Id. It therefore follows that

the import of the IRS rule, including its attendant policy con-

siderations, is the same as that of Rule 5.

According to Conrad, the use of the word “must” in both

rules indicates that Agent Osuna had no choice but to present

Conrad to a magistrate judge on the day he was arrested

because United States Magistrate Judges, United States Dis-

trict Judges, and Fresno County Superior Court Judges were

located in close proximity to Conrad’s place of detention and

could have conducted the arraignment. Therefore, Conrad

contended, because Agent Osuna was required to present

Conrad to a magistrate judge without unnecessary delay she

was not permitted to exercise any judgment in doing so, and

the discretionary function exception would not shield her fail-

ure to present Conrad immediately.

[6] Conrad’s argument, however, ignores the word “unnec-

essary” in Rule 5(a) and IRM 9.4.12.14. It is true that by

using the word “must” the rules mandate performance as

specified. See Berkovitz, 486 U.S. at 542-43. However, the

mandated task in this case is to present an arrested person to

the magistrate judge “without unnecessary delay.” By using

the qualifying term “unnecessary,” the rule commits some

definition of “necessary” to the judgment of the agent in the

field. Because the rule does not define the term “unneces-

sary,” an agent must determine, from all the circumstances

existing at the time, how much delay is necessary before pre-

senting a defendant to the magistrate judge. See FED. R. CRIM.

P. 5(a) advisory committee’s note (“What constitutes ‘unnec-

essary delay’, i.e. reasonable time within which the prisoner

should be brought before a committing magistrate, must be

5288 CONRAD v. UNITED STATES

determined in the light of all the facts and circumstances of

the case.”).

[7] IRS agents, like other law enforcement officers, are

required to avoid unnecessary delay in presenting an arrested

person before an appropriate judicial officer. Execution of this

duty requires exercise of judgment, the first step in the Varig

Airlines analysis. See Reed, 231 F.3d at 504.

[8] The second step of the discretionary function analysis

is also satisfied in this case because, “[w]hen established gov-

ernmental policy, as expressed or implied by statute, regula-

tion, or agency guidelines, allows a Government agent to

exercise discretion, it must be presumed that the agent’s acts

are grounded in policy when exercising that discretion.”

United States v. Gaubert, 499 U.S. 315, 324 (1991). Here, the

notes of the advisory committee for Rule 5 illustrate the

underlying policy decision: that only an agent in the field will

be able to adequately determine how much delay is necessary

before presenting a defendant to a magistrate judge. See FED.

R. CRIM. P. 5(a) advisory committee’s note.

[9] There are numerous factors involved in the decision of

when to present a suspect to a magistrate judge and no statute,

regulation, or policy could adequately predict them all ex

ante. Thus, “[Rule 5(a) and IRM 9.4.12.14] allow room for

implementing officials to make independent policy judg-

ments” and, therefore, the discretionary function exception

must “protect[ ] the acts taken by those officials in the exer-

cise of this discretion.” See Berkovitz, 486 U.S. at 546. Agent

Osuna, acting in conjunction with the AUSA, presented Con-

rad to a magistrate judge in accordance with the practice of

the Eastern District of California, which conducts arraign-

ments principally at times designated by the magistrate

judges. Her decision to do so balanced Conrad’s rights under

Rule 5(a) with such other considerations as the timing of Con-

rad’s arrest (see below) and the fact that magistrate judges

must perform a broad, varied, and substantial volume of

CONRAD v. UNITED STATES 5289

duties that require time themselves: monitoring discovery dis-

putes in civil litigation, trials in delegated civil cases, hearings

and fact finding in habeas corpus and other criminal matters,

and initial appearances in criminal prosecutions. That Agent

Osuna chose to present Conrad at a regularly scheduled time,

instead of at a specially arranged one, does not necessitate the

conclusion that she abdicated the exercise of judgment.

Nor does the record contain evidence that Agent Osuna

deliberately delayed arresting Conrad in order to increase the

amount of time he would spend in custody. Compare United

States v. Jernigan, 582 F.2d 1211, 1214 (9th Cir. 1978)

(refusing to dismiss an indictment even though “agent Horn

deliberately delayed arresting Jernigan until a time when, as

he well knew, Jernigan would not be able to go before a mag-

istrate, have bail reset, and be released”). To the contrary, the

time of Conrad’s arrest was chosen to cause the least likeli-

hood of destruction of evidence and the greatest likelihood of

seizure of gambling monies. Ultimately, the facts of this case

demonstrate that Agent Osuna exercised discretion by not

demanding that other players in the investigation/prosecution

team cooperate in seeking a special arraignment outside the

Eastern District’s schedule. We have been referred to no case

holding that such a choice removes an agent’s decision from

the protection of the discretionary function exception. That

said, we do not suggest that law enforcement agents making

arrests may escape the dictates of Rule 5(a) by rigidly adher-

ing to the magistrate judges’ arraignment schedule, thereby

abandoning any exercise of individualized judgment or dis-

cretion. There is a difference between a case such as this, in

which an agent may validly claim that she exercised discre-

tion (even if she has abused it, see 28 U.S.C. § 2680(a)), and

a case in which the agent is not exercising discretion but

rather exploiting the authority she wields in an effort to cir-

cumvent arraignment proceedings.

[10] Because Agent Osuna’s decision, to the extent that she

was the sole decision maker, involved the exercise of judg-

5290 CONRAD v. UNITED STATES

ment, and because Congress intended to shield this decision-

making from judicial second-guessing, the discretionary func-

tion exception applies to Conrad’s false imprisonment claim.

There are no genuine issues of material fact in dispute on the

matter. Accordingly, no subject matter jurisdiction exists to

hear Conrad’s false imprisonment claim and the district court

did not err in granting summary judgment in favor of the

United States. See Gen. Dynamics Corp. v. United States, 139

F.3d 1280, 1283 (9th Cir. 1998) (“If [the discretionary func-

tion exception] applies, sovereign immunity is not waived,

and no subject matter jurisdiction exists.”).

b. Claim of Malicious Prosecution

In assessing the United States’ liability under the FTCA,

we are required to apply the law of the state in which the

alleged tort occurred. Trenouth v. United States, 764 F.2d

1305, 1307 (9th Cir. 1985). Here, Conrad’s malicious prose-

cution claim is for actions and events occurring in California.

Thus, California law applies.

[11] To prove a claim of malicious prosecution in Califor-

nia, the plaintiff must prove that the underlying prosecution:

“(1) was commenced by or at the direction of the defendant

and was pursued to a legal termination in his, plaintiff’s,

favor; (2) was brought without probable cause; and (3) was

initiated with malice.” Sheldon Appel Co. v. Albert & Oliker,

765 P.2d 498, 501 (Cal. 1989). In this case, our analysis of the

district court’s probable cause determination is dispositive of

the entire claim.

“The question of probable cause is one of law, but if there

is a dispute concerning the defendant’s knowledge of facts on

which [the initial prosecution was] based, the [trier of fact]

must resolve that threshold question.” Sierra Club Found. v.

Graham, 85 Cal. Rptr. 2d 726, 737 (Cal. Ct. App. 1999).

Here, a question of fact existed as to whether Agent Osuna

knowingly lied in her affidavit and grand jury testimony.

CONRAD v. UNITED STATES 5291

Thus, the district court, as the trier of fact, had to resolve that

question before making a legal conclusion as to probable

cause.

To resolve the dispute, the district court held a trial and

heard the testimony of a number of the parties involved in the

criminal prosecution, including Conrad and Agent Osuna.

After hearing Agent Osuna’s testimony, which was not con-

tradicted by extrinsic evidence, the district court credited her

version of events and found that she did not knowingly lie in

her affidavit or grand jury testimony. This was particularly

true, according to the district court, because it would have

been impossible for Agent Osuna to have lied in her affidavit

and grand jury testimony unless three other investigators and

the AUSA were complicit in the lie.

[12] We review the district court’s finding on this point

only for clear error and, therefore, must affirm unless we are

firmly convinced an error has been made. Anderson v. City of

Bessemer, 470 U.S. 564, 573 (1985). “If the district court’s

account of the evidence is plausible in light of the record

viewed in its entirety, [we] may not reverse it even though

convinced that had [we] been sitting as the trier of fact, [we]

would have weighed the evidence differently.” Id. at 573-74.

“[W]hen a trial judge’s finding is based on his decision to

credit the testimony of one of two or more witnesses, each of

whom has told a coherent and facially plausible story that is

not contradicted by extrinsic evidence, that finding . . . can

virtually never be clear error.” Id. at 575.

To determine whether probable cause existed after finding

the necessary facts, the district court had to “make an objec-

tive determination of the ‘reasonableness’ of [Agent Osuna’s]

conduct, i.e., to determine whether, on the basis of the facts

known to [Agent Osuna], the institution of the prior action

was legally tenable.” Sheldon Appel, 765 P.2d at 506. “When

. . . the claim of malicious prosecution is based upon the initi-

ation of a criminal prosecution, the question of probable cause

5292 CONRAD v. UNITED STATES

is whether it was objectively reasonable for the defendant . . .

to suspect the plaintiff . . . had committed a crime.” Ecker v.

Raging Waters Group, Inc., 105 Cal. Rptr. 2d 320, 326 (Cal.

Ct. App. 2001).

In a federal criminal prosecution, a grand jury finds proba-

ble cause. McCarthy v. Mayo, 827 F.2d 1310, 1316 (9th Cir.

1987). And, under California tort law, a grand jury indictment

creates a presumption in favor of the malicious-prosecution

defendant that probable cause existed for the underlying pros-

ecution. Williams v. Hartford Ins. Co., 195 Cal. Rptr. 448,

452 (Cal. Ct. App. 1983). The plaintiff can rebut the presump-

tion, however, by demonstrating that the indictment was pro-

cured on the basis of false testimony. Id. “[I]f [the] defendant

knows that the facts he or she is asserting are not true, then

[the] defendant’s knowledge of facts which would justify ini-

tiating suit is zero, and probable cause is nonexistent.” Sierra

Club, 85 Cal. Rptr. 2d at 737.

[13] In this case, Conrad’s indictment was handed down by

a grand jury, establishing a rebuttable presumption of proba-

ble cause. See Williams, 195 Cal. Rptr. at 452. In an attempt

to rebut this presumption, Conrad alleged that his indictment

was secured using Agent Osuna’s false testimony. As noted

above, however, the district court’s finding with respect to

Agent Osuna’s truthfulness was not clearly erroneous and

cannot be reversed. The district court’s finding conclusively

establishes that Conrad’s grand jury indictment was proper.

Because we conclude that the district court’s findings were

not clearly erroneous, we affirm the district court’s judgment

that Conrad failed to rebut the presumption of probable cause

and that his malicious prosecution claim therefore must fail.

Sheldon Appel, 765 P.2d at 504 (“If the court determines that

there was probable cause to institute the prior action, the mali-

cious prosecution action fails, whether or not there is evidence

that the prior suit was maliciously motivated.”). The district

court did not err by granting judgment in favor of the United

States.

CONRAD v. UNITED STATES 5293

IV. Conclusion

The district court made no legal errors and its findings of

fact are not clearly erroneous. Accordingly, the judgment is

AFFIRMED