                           NOT FOR PUBLICATION

                    UNITED STATES COURT OF APPEALS                         FILED
                            FOR THE NINTH CIRCUIT                           MAY 14 2010

                                                                       MOLLY C. DWYER, CLERK
                                                                         U .S. C O U R T OF APPE ALS

RYAN COUCH; KENNETH JIMENEZ;                     No. 09-15599
BARNABE TORRES,
                                                 D.C. No. 1:08-cv-01621-LJO-DLB
             Plaintiffs - Appellants,

  v.                                             MEMORANDUM *

MATTHEW CATE; DAVID SHAW;
JEANNE S. WOODFORD; JOHN
DOVEY; SCOTT KERNAN; MARTIN
HOSHINO; TOMMY WAN; KIMBERLI
BONCORE; RALPH DIAZ; KENNETH
CLARK; KATHY ALLISON; JACK
HUTCHINS,

             Defendants - Appellees.



                   Appeal from the United States District Court
                       for the Eastern District of California
                   Lawrence J. O’Neill, District Judge, Presiding

                     Argued and Submitted February 12, 2010
                            San Francisco, California




        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Before: HALL, McKEOWN, Circuit Judges, and ZILLY, ** Senior District Judge.

      Officers Couch, Jimenez, and Torres, all corrections officers at the

California Department of Corrections and Rehabilitation (“CDCR”), appeal from

the district court’s Rule 12(b)(6) dismissal of their two causes of action under 42

U.S.C. § 1983 and their private civil cause of action under 18 U.S.C. § 1964(c) of

the Racketeer-Influenced Corrupt Organizations Act (“RICO”) against twelve

defendants,1 all employees in either the CDCR prison management or the

California Office of the Inspector General. We affirm in part and reverse and

remand in part.2

I.    S ECTION 1983 F IRST A MENDMENT C LAIMS

      We affirm the district court’s dismissal with prejudice of Couch’s and

Jimenez’s § 1983 First Amendment claims against all defendants other than

Investigator Boncore and Associate Warden Diaz. As to Couch’s and Jimenez’s




          **
             The Honorable Thomas S. Zilly, Senior United States District Judge
for the Western District of Washington, sitting by designation.
      1
         Couch and Jimenez’s § 1983 free speech retaliation claims against
Associate Warden Tommy Wan survived the defendants’ motion to dismiss and is
not at issue in this appeal.
      2
         We agree with the district court that the Eleventh Amendment does not bar
relief as to any of the claims asserted by Couch, Jimenez, or Torres.

                                          2
§ 1983 First Amendment claims against Boncore and Diaz, we reverse the

dismissal with prejudice and remand with instructions to grant leave to amend.

      None of the parties discussed a seminal Supreme Court case limiting First

Amendment protection for public employees, nor did any address subsequent

Ninth Circuit cases discussing this limitation. See Garcetti v. Ceballos, 547 U.S.

410 (2006); see, e.g., Eng v. Cooley, 552 F.3d 1062 (9th Cir. 2009); Robinson v.

York, 566 F.3d 817 (9th Cir. 2009); Posey v. Lake Pend Oreille School Dist. No.

84, 546 F.3d 1121 (9th Cir. 2008); Freitag v. Ayers, 468 F.3d 528 (9th Cir. 2006).

As the Supreme Court stated in Ceballos, “when public employees make

statements pursuant to their official duties, the employees are not speaking as

citizens for First Amendment purposes, and the Constitution does not insulate their

communications from employer discipline.” Ceballos, 547 U.S. at 421.

      On the face of the complaint, there are insufficient facts to ascertain the

scope of Couch’s and Jimenez’s official duties as correctional officers and whether

they made the various statements in their capacity as private citizens or public

employees under Ceballos. To satisfy this step of the inquiry against a motion to

dismiss, Couch and Jimenez would have to plead the official responsibilities of a

correctional officer and identify the speech that they made in their capacities as

private citizens (i.e., outside their official duties). Because Couch and Jimenez


                                           3
might be able to allege facts that could cure this deficiency, dismissal of their

claims against Boncore and Diaz without leave to amend was improper. Polich v.

Burlington Northern, Inc., 942 F.2d 1467, 1472 (9th Cir. 1991).3

      It is well settled that the state may not retaliate against its employees for

asserting “First Amendment rights [its employees] would otherwise enjoy as

citizens to comment on matters of public interest.” Pickering v. Bd. of Educ., 391

U.S. 563, 568 (1968). Even though Boncore, as a correctional officer, may not

herself have the supervisory authority to effect an employment action such as a

transfer, Couch and Jimenez’s pleading of the facts indicates that Boncore “was


      3
         The three plaintiffs did not request leave to amend the complaint at the
motion to dismiss phase, and the district court preemptively stated it would not
grant any attempt to do so. While the denial of leave to amend is reviewed for
abuse of discretion, we have consistently held that “requests for leave should be
granted with ‘extreme liberality.’” Moss v. U.S. Secret Service, 572 F.3d 962, 972
(9th Cir. 2009) (quoting Morongo Band of Mission Indians v. Rose, 893 F.2d
1074, 1079 (9th Cir.1990)). Leave to amend should be granted unless upon de
novo review, it is apparent that an amendment would not save the complaint.
Polich, 942 F.2d at 1472. Although our holding in Alaska v. United States,
suggests that absent certain circumstances, “where a party did not seek leave to
amend a pleading in the lower court, we would not remand with instructions to
grant leave to amend,” 201 F.3d 1154, 1163 (9th Cir. 2000), we also stated in Lee
v. City of Los Angeles, that “we will uphold a sua sponte dismissal without leave
to amend only where the plaintiff cannot possibly win relief.” 250 F.3d 668, 683
n.7 (9th Cir. 2001) (internal quotation marks and citation omitted). Here, the
plaintiffs did not allege, and the district court did not apply, the Ceballos rule on
speech by public officials protected by the First Amendment. The district court’s
statement that it would deny leave to amend was understandably not linked to the
plausibility of plaintiffs’ claims under Ceballos.

                                           4
assigned to lead the ISU [Investigative Services Unit] team,” and thus she did have

some supervisory authority over the two officers, both of whom worked in the ISU.

      Couch and Jimenez may also be able to plead facts to support their

retaliation claims against Diaz. Couch and Jimenez allege that Diaz, in

contravention of normal policy, instructed Couch to show an accused peacekeeper

evidence implicating him in a conspiracy to commit murder, resulting in a threat on

Couch’s life. They also allege that Diaz told another officer that Couch and

Jimenez were removed for “doing their own investigations,” which they

understood to mean that Associate Wardens Diaz and Wan decided to remove them

for prosecuting peacekeepers. These two potential adverse employment actions,

combined with Diaz’s statement to Jimenez that he “didn’t like” the presence of

federal officers at the prison, with whom Couch and Jimenez were cooperating,

constitute a plausible allegation that Diaz personally retaliated against the two

officers for their protected speech.

      These alleged adverse employment actions are only cognizable, however, if

they were done in retaliation for protected speech under Ceballos. Because

amendment of the First Amendment claims might not be futile with respect

Boncore and Diaz, we remand with instructions to allow leave to amend as to those

two defendants.


                                           5
      However, dismissal was proper against Matthew Cate, David Shaw, Jeanne

Woodford, John Dovey, Scott Kernan, Martin Hoshino, Kenneth Clark, Kathy

Allison, and Jack Hutchins. “Because vicarious liability is inapplicable to . . .

§ 1983 suits, a plaintiff must plead that each Government-official defendant,

through the official’s own individual actions, has violated the Constitution.”

Ashcroft v. Iqbal, 129 S. Ct. 1937, 1948 (2009). In pleading facts to suggest each

defendant’s liability, Couch’s and Jimenez’s allegations must be more than

“‘merely consistent with’ a defendant’s liability,” but rather, the complaint must

“plead[] factual content that allows the court to draw the reasonable inference that

the defendant is liable for the misconduct alleged.” Id.

      Couch and Jimenez claim that Cate, Woodford, Dovey, Kernan, Hoshino,

Clark, Allison,4 and Hutchins are liable based on supervisory liability, and that

each of these eight defendants plus Shaw are also liable because they each

“conspired with Defendant Wan and with each other to commit and cover up

potentially criminal conduct and violations of Couch’s and Jimenez’s civil rights.”

In a § 1983 claim, “a supervisor is liable for the acts of his subordinates ‘if the


      4
        Couch and Jimenez also claim that Allison and Clark are liable for First
Amendment retaliation based on their personal conduct. Because they cannot
allege facts that could plausibly state a claim on this basis, we affirm the district
court’s dismissal of this claim against Allison and Clark on this liability theory
with no further comment.

                                            6
supervisor participated in or directed the violations, or knew of the violations of

subordinates and failed to act to prevent them.’” Preschooler II v. Clark County

Sch. Bd. of Trustees, 479 F.3d 1175, 1182 (9th Cir. 2007) (quoting Taylor v. List,

880 F.2d 1040, 1045 (9th Cir. 1989)). To show a conspiracy between the

defendants under § 1983, plaintiffs must allege “an agreement or ‘meeting of the

minds’ to violate constitutional rights.” United Steelworkers of America v. Phelps

Dodge Corp., 865 F.2d 1539, 1540-41 (9th Cir. 1989) (en banc) (quoting Fonda v.

Gray, 707 F.2d 435, 438 (9th Cir. 1983)). “To be liable, each participant in the

conspiracy need not know the exact details of the plan, but each participant must at

least share the common objective of the conspiracy.” Id.

      Couch and Jimenez allege that because Cate, Woodford, Dovey, Kernan,

Hoshino, Clark, Allison, and Hutchins are in the command chain, they authorized

or should have known about the actions of Wan, Boncore, and Diaz. Although

they allege a few other facts, Couch and Jimenez have not shown that they can

allege sufficient facts to create a plausible inference that these defendants are liable

in their supervisory capacity for constitutional violations against Couch and

Jimenez. Similarly, Couch and Jimenez cannot allege sufficient facts to indicate

plausibly that any of these eight defendants or Shaw conspired to violate their First

Amendment free speech rights. The district court therefore properly dismissed


                                           7
Couch’s and Jimenez’s First Amendment claims against Cate, Shaw, Woodford,

Dovey, Kernan, Hoshino, Clark, Allison, and Hutchins.

II.   S ECTION 1983 D UE P ROCESS C LAIMS

      The district court properly dismissed Couch’s and Jimenez’s § 1983 due

process claims, because they could not plausibly allege that they had a protected

liberty or property interest. We have recognized that a liberty interest is implicated

if a charge leveled by the government against an individual impairs that person’s

reputation for honesty or morality. Vanelli v. Reynolds Sch. Dist. No. 7, 667 F.2d

773, 777-78 (9th Cir. 1982). To establish a protected liberty interest under Vanelli,

Couch and Jimenez must establish, inter alia, that some public disclosure has been

or will be made of their allegedly stigmatizing transfers out of the ISU. Id.; see

also Guzman v. Shewry, 552 F.3d 941, 955 (9th Cir. 2009). Self-reporting by

Couch and Jimenez by answering questions on California’s standard application

form, for example, does not constitute public disclosure for purposes of Vanelli.

Guzman, 552 F.3d at 957. Other than such self-reporting, Couch and Jimenez have

pleaded no facts suggesting that the allegedly stigmatizing information has been or

will be published. Indeed, under California law, any documents memorializing the

transfers or alleged demotions would be exempt from a public records disclosure

request. See C AL. G OV’T C ODE § 6254(c) & (k); C AL. P ENAL C ODE §§ 832.7(a) &


                                          8
832.8(d) & (e); see also Comm’n on Peace Officer Standards & Training v.

Superior Court, 165 P.3d 462, 467-68 (Cal. 2007). Nor do the transfers out of ISU

give rise to a property-based due process claim. Couch and Jimenez have not

shown that they were entitled to a specific position or that they were entitled to

remain in ISU, and their transfers were not accompanied by any decrease in salary

or benefits. See Stiesberg. v. California, 80 F.3d 353, 357(9th Cir. 1996). We

affirm the district court’s dismissal of Couch’s and Jimenez’s due process claims

against all defendants and thus have no occasion to analyze whether the defendants

also have qualified immunity as to the due process claims.

III.   RICO C LAIMS

       All three officers sue all twelve defendants in their personal capacities for

injuries to business and property under RICO § 1964(c), which provides a private

civil cause of action for “[a]ny person injured in his business or property by reason

of a violation of section 1962.” 18 U.S.C. § 1964(c). Section 1962, in turn,

contains the criminal provisions of the statute, and Couch, Jimenez, and Torres

allege violations under §§ 1962(b), (c), and (d). We affirm the district court’s

dismissal of Torres’s RICO claim against all defendants, and affirm the district

court’s dismissal of Couch’s and Jimenez’s RICO claims against all defendants

except Wan, Boncore, and Diaz.


                                           9
      As an initial matter, we affirm the district court’s dismissal of the officers’

§ 1962(b) claims against all defendants, because the officers do not allege or even

make any mention of facts or arguments that suggest that defendants engaged in “a

pattern of racketeering activity” in order to “acquire or maintain, directly or

indirectly, any interest in or control of” the enterprise. 18 U.S.C. § 1962(b).

      Under RICO, a “plaintiff only has standing if, and can only recover to the

extent that, he has been injured in his business or property by the conduct

constituting the violation.” Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 496

(1985). In order to survive the motion to dismiss, each of the officers must show

that the defendants’ conduct was the proximate cause of that injury. Holmes v.

Sec. Investor Prot. Corp., 503 U.S. 258, 268 (1992). The Supreme Court recently

clarified that this proximate cause requires “‘some direct relation between the

injury asserted and the injurious conduct alleged’” and explicitly rejected

forseeability as a standard for determining proximate causation. Hemi Group, LLC

v. City of New York, — U.S. —, 130 S. Ct. 983, 989, 991 (2010) (quoting

Holmes, 503 U.S. at 268) (emphasis added). The decision in Hemi Group was

announced after briefing in this case and less than a week before oral argument.

The officers argued in their complaint and briefs that their injuries were a

foreseeable result of the defendants’ predicate acts, thus establishing standing. In


                                          10
doing so, they relied on Diaz v. Gates, which states that the “proximate cause

standard . . . is generous enough to include the unintended, though foreseeable

consequences of RICO predicate acts.” 420 F.3d 897, 901 (9th Cir. 2005).

However, Hemi Group definitively foreclosed RICO liability for consequences that

are only foreseeable without some direct relationship. Hemi Group, 130 S. Ct. at

991. Each officer must allege that the RICO predicate acts of obstruction of justice

in violation of 18 U.S.C. §§ 1512(b)(3), (c)(1), and (d)(1)-(4) are the proximate,

and not just foreseeable, causes of the officers’ injuries.

      There are no facts that Torres could allege to state a claim that the

defendants’ commission of RICO predicate acts had a direct relationship to his

alleged injuries, including stress, need for psychiatric care, and resulting

interference with his ability to pursue contractual relations. The link between the

defendants’ alleged predicate acts and Torres’s resulting injuries is far too

attenuated to confer standing, and we therefore affirm the district court’s dismissal

of Torres’s RICO claim against all defendants. Hemi Group, 130 S. Ct. 983, 989

(“Because [the plaintiff’s] theory of causation requires us to move well beyond the

first step, that theory cannot meet RICO’s direct relationship requirement.”). In

addition, Torres’s injuries are more akin to personal injuries that are not cognizable

under RICO. Diaz, 420 F.3d at 900.


                                           11
      Our de novo analysis indicates that Couch and Jimenez might be able to

allege facts establishing a direct relation between their injuries and some of the

defendants’ predicate acts.5 For example, the transfer of Couch to a different

facility and the allegation that Wan, Boncore, and Diaz effected this transfer to

prevent him from pursuing high profile peacekeepers suggests a direct relationship

between Couch’s injury and racketeering activity in violation of § 1512(b)(3).

Likewise, Jimenez’s transfer to a different facility and the allegation that this

transfer was in retaliation for his concerns about an investigation of the murder of

an inmate also suggests a direct relationship between his injury and racketeering

activity in violation of § 1512(b)(3). Because dismissal without leave to amend is

improper unless “the complaint could not be saved by any amendment,” Polich,

942 F.2d at 1472, and because amendment of Couch’s and Jimenez’s RICO claims

might not be futile with respect to Wan, Boncore, and Diaz, we reverse and remand

Couch’s and Jimenez’s RICO claims with instructions to allow leave to amend to




      5
         It is possible that Couch and Jimenez may not be able to establish the
requisite injury under our en banc decision in Diaz, 420 F.3d at 900. Although we
recognized in Diaz that our decision articulates a more expansive theory of RICO
liability for employment-related losses, we expressly noted that our holding did not
create unlimited standing for loss of wages. Id. at 901. Because we reverse and
remand with respect to proximate cause under Hemi Group, we leave for another
day whether Couch and Jimenez allege sufficient injury under Diaz.

                                           12
allege facts establishing proximate cause Hemi Group, but only as to these three

defendants.

      Dismissal was proper against Cate, Shaw, Woodford, Dovey, Kernan,

Hoshino, Allison, Clark, and Hutchins because the officers allege insufficient facts

that these defendants themselves committed predicate offenses under § 1962(c).

The officers also allege that the defendants “knowingly and willfully conspired . . .

to engage in the violation” of § 1962(c) and that each “aided and abetted, and was

the co-conspirator of, each of the others and was at all times acting, and did act, in

furtherance of, and with full knowledge of, the unlawful purposes of such

conspiracy.” However, “[t]o establish a violation of section 1962(d), Plaintiffs

must allege either an agreement that is a substantive violation of RICO or that the

defendants agreed to commit, or participated in, a violation of two predicate

offenses.” Howard v. Am. Online Inc., 208 F.3d 741, 751 (9th Cir. 2000). The

officers’ RICO conspiracy claims fail as to most of the defendants, because they

allege insufficient facts to demonstrate an agreement to violate RICO or a predicate

statute by any of the defendants except Wan, Boncore, and Diaz.

IV.   C ONCLUSION

      In summary, we affirm the district court’s dismissal of Couch’s and

Jimenez’s § 1983 First Amendment claims against Cate, Shaw, Woodford, Dovey,


                                          13
Kernan, Hoshino, Clark, Allison, and Hutchins. We reverse the dismissal of

Couch’s and Jimenez’s § 1983 First Amendment claims against Boncore and Diaz

and remand for leave to amend in light of Ceballos. We affirm the district court’s

dismissal of Couch’s and Jimenez’s § 1983 due process claims against all

defendants. Finally, we affirm the district court’s dismissal of Torres’s RICO

claim against all defendants. We affirm the district court’s dismissal of Couch’s

and Jimenez’s RICO claims against Cate, Shaw, Woodford, Dovey, Kernan,

Hoshino, Clark, Allison, and Hutchins. We reverse the dismissal of Couch’s and

Jimenez’s RICO claims against Wan, Boncore, and Diaz and remand for leave to

amend in light of Hemi Group.

      AFFIRMED IN PART, REVERSED IN PART AND REMANDED FOR

FURTHER PROCEEDINGS. All parties shall bear their own costs on appeal.




                                         14
