Salkhi v. Dueweke

Background

Ali Salkhi sued individually and as trustee of the Ali Salkhi and Fatemeh Salkhi 1993 Revocable Family Trust. Salkhi Family Holdings, Inc. also sued. The Trust owns three service stations in Petaluma, and Salkhi Family Holdings manages them and operates their underground storage tanks. The defendants were Paula Dueweke, Jessica Power, and the City of Petaluma. Dueweke worked for the City’s Fire Prevention Bureau, and Power was the City’s fire marshal and the chief executive officer of that bureau.

The amended complaint alleged that the defendants made it more difficult and expensive for the plaintiffs to operate the stations. The alleged conduct included requiring replacement of fuel lines in 2014, continuing to issue underground-storage-tank permits to a prior operator after management changed in 2016, imposing allegedly excessive false-alarm fines between 2017 and 2019, and issuing citations and fines in 2019 based on an allegedly incorrect interpretation of underground-storage-tank regulations. The amended complaint asserted claims for substantive due process, equal protection, and procedural due process. It also sought an injunction concerning the frequency of equipment certifications and declarations about certification requirements, permit decisions, and false-alarm fines.

Rulings

The court applied the standard for a Rule 12(b)(6) motion, which tests whether a complaint states a legally sufficient claim. It granted the motion to dismiss Ali Salkhi in his individual capacity because the alleged injuries were directed at the stations and therefore allegedly affected Salkhi Family Holdings and/or the Trust, not Salkhi personally. The court noted that the plaintiffs did not dispute Salkhi’s standing as trustee.

The court denied the motion to dismiss Count 1, the substantive-due-process claim, based on inadequate allegations about the defendants’ motivation. Although the allegations were inartfully pleaded, the court found that the allegations against Dueweke collectively suggested she may have acted improperly for reasons unrelated to the merits of the underground-storage-tank citations. The court therefore did not dismiss Count 1 on that ground.

The court granted the motion as to Count 2, the equal-protection claim. The plaintiffs were attempting to plead a “class-of-one” claim, which requires alleging intentional treatment different from that of similarly situated people without a rational basis. The court found that the complaint did not identify or describe the comparable service-station owners or operators sufficiently.

The court also granted the motion as to claims concerning the excessive false-alarm fines because the complaint did not identify a viable defendant responsible for those fines. It dismissed claims based on the alleged failure to issue permits to the correct operator because the complaint did not clearly explain the resulting harm or how the conduct violated a constitutional right. The court granted the motion as to the 2014 fuel-line-replacement claim because it was outside the applicable two-year limitations period and the continuing-violation doctrine did not save it. The order also dismissed any remaining claims based on the fuel-line replacement, alarm fines, or failure to acknowledge the change in operator.

Qualified Immunity

Qualified immunity protects government officials from liability unless their alleged conduct violated a constitutional right that was clearly established at the time. The court considered only whether the asserted rights were clearly established, because the defendants assumed for purposes of the motion that violations had occurred. The court found that the plaintiffs had clearly established rights not to be arbitrarily or irrationally denied a permit in which they held a protected interest, to receive a hearing before being deprived of such a permit in a non-emergency situation, and not to be subjected to vague or unpublished rules. The court rejected the defendants’ arguments at this stage because they depended on disputed facts outside the pleadings. It therefore denied the qualified-immunity motion without prejudice.

Municipal Liability

The court dismissed the City of Petaluma because the plaintiffs failed to plead municipal liability under Monell v. Department of Social Services. A Monell claim requires a constitutional deprivation caused by a municipal policy, custom, or practice, including conduct approved or ratified by an official with final policymaking authority. The plaintiffs relied on former fire marshal Cary Fergus, but they did not allege that he committed or knowingly approved the later conduct underlying the due-process claims. The court concluded that the plaintiffs had not adequately pleaded ratification or another basis for holding the City liable.

Disposition

The court granted in part and denied in part the motion to dismiss the amended complaint with leave to amend. It dismissed Ali Salkhi in his individual capacity only, Count 2 in its entirety, and the City of Petaluma. It also dismissed claims based on the fuel-line replacement, excessive alarm fines, and erroneous permit issuance or failure to acknowledge the change in operator. The qualified-immunity motion was denied without prejudice. Judge Yvonne Gonzalez Rogers gave the plaintiffs one final opportunity to amend, subject to the deadlines stated in the order.