Gallagher v. City and County of San Francisco

Background

Patrick Gallagher alleged that San Francisco building inspectors, planners, the City, and a former City employee engaged in a “pay to play” scheme and later retaliated against him after he spoke with the Federal Bureau of Investigation about the alleged conduct. According to the first amended complaint, City officials issued notices of violation, revoked or withheld permits and a certificate of completion, required additional work and applications, and delayed approvals concerning Gallagher's San Francisco property. Gallagher alleged that these actions caused multiple property sales to fall through or reduced the property's sale price.

The first amended complaint asserted seven causes of action: slander of title, inverse condemnation, intentional interference with prospective economic relations, a civil-rights claim under 42 U.S.C. § 1983, intentional infliction of emotional distress, negligence, and declaratory relief. The § 1983 claim alleged that the defendants retaliated against Gallagher in violation of his First and Fourteenth Amendment rights. The City removed the case from state court based on the federal claim and moved to dismiss all claims against it.

Issue and legal standard

The court focused on the § 1983 claim because it supplied the basis for federal jurisdiction. A local government may be liable under § 1983 when an official policy or custom causes a constitutional violation, but it is not automatically liable for the acts of its employees merely because they are employees. To state this type of municipal-liability claim, a plaintiff must allege facts supporting an unconstitutional policy or custom, a deliberately indifferent failure to act or train, or involvement in or approval of the conduct by a final policymaker.

Court's reasoning

The court held that the first amended complaint did not adequately allege a basis for municipal liability. The complaint often referred generally to “defendants” without identifying which defendants acted or whether the term included the City. Although the complaint referred to alleged retaliation against a City Planning Commissioner, it did not provide details about who was involved. The court also explained that isolated or random acts by a non-policymaking employee generally do not establish a municipal policy or custom.

The court separately considered the allegation that Duffy, identified as the Chief Building Inspector, was a final policymaker who had participated in or approved the retaliation. The complaint did not allege that Duffy was a final policymaker, and its only specific allegation about him was that he said he had no doubt Gallagher had spoken with the Federal Bureau of Investigation. The court stated that this allegation might indicate retaliation but, standing alone, did not provide a basis for municipal liability or show the required approval by an authorized policymaker.

Disposition

The court granted the City's motion to dismiss the municipal-liability claim and granted Gallagher leave to amend. The second amended complaint was due by November 9, 2023. The court did not address the state-law claims at that time, stating that it would decline supplemental jurisdiction over them if Gallagher could not state a federal claim. The court also vacated the November 17 hearing and initial case management conference, to be rescheduled after the pleadings were settled.