Opinion ID: 810771
Heading Depth: 3
Heading Rank: 1

Heading: Desert Palace

Text: Tsao alleges that her arrest and detention for trespassing by Desert Palace, acting through Makeley, were without probable cause because the casino had invited her to return to the premises through the promotional offers. Because Tsao has sued Desert Palace and not Makeley, we must initially address whether the suit against Desert Palace could be proper. [1] To decide that question, we begin by considering, for the first time in this circuit, whether Monell v. Dep’t of Soc. Servs., 436 U.S. 658, 691 (1978), applies to suits against private entities under § 1983. In Monell, the Supreme Court held that municipalities and other local government units could be sued for constitutional violations under § 1983. Id. at 690. The court also held, however, that “a municipality cannot be held liable solely because it employs a tortfeasor—or, in other words . . . on a respondeat superior theory.” Id. at 691 (emphasis in original). To create liability under § 1983, the constitutional violation must be caused by “a policy, practice, or custom of the entity,” Dougherty v. City of Covina, 654 F.3d 892, 900 (9th Cir. 2011), or be the result of an order by a policy-making officer, see Gibson v. County of Washoe, 290 F.3d 1175, 1186 (9th Cir. 2002). Whether Monell applies to suits against private entities under § 1983 is a threshold question with regard to Desert Palace’s liability because, if it does, Monell establishes the parameters of such liability. [2] Every one of our sister circuits to have considered the issue has concluded that the requirements of Monell do apply to suits against private entities under § 1983. See Buckner v. Toro, 116 F.3d 450, 453 (11th Cir. 1997); Street v. Corr. Corp. of Am., 102 F.3d 810, 818 (6th Cir. 1996); Rojas v. Alexander’s Dep’t Store, Inc., 924 F.2d 406, 408-09 (2d Cir. 1990); Lux v. Hansen, 886 F.2d 1064, 1067 (8th Cir. 1989); Iskander v. Vill. of Forest Park, 690 F.2d 126, 128-29 (7th Cir. 1982); Lusby v. T.G. & Y. Stores, Inc., 749 F.2d 1423, 1433 (10th Cir. 1984), vacated on other grounds sub nom. 12860 TSAO v. DESERT PALACE, INC. City of Lawton v. Lusby, 474 U.S. 805 (1985); Powell v. Shopco Laurel Co., 678 F.2d 504, 506 (4th Cir. 1982); see also Benn v. Universal Health Sys., Inc., 371 F.3d 165, 174 (3d Cir. 2004); Lyons v. Nat’l Car Rental Sys., Inc., 30 F.3d 240, 246 (1st Cir. 1994). Like those circuits, we see no basis in the reasoning underlying Monell to distinguish between municipalities and private entities acting under color of state law. As Monell observed, the text of § 1983 “cannot be easily read to impose liability vicariously on governing bodies solely on the basis of the existence of an employer-employee relationship with a tortfeasor.” 436 U.S. at 692. On the contrary, the Court observed, Congress explicitly provided “that A’s tort became B’s liability if B ‘caused’ A to subject another to a tort.” Id. Thus, the Court held, “constitutional deprivations” could subject a municipality to liability under § 1983 if they were the result of a “governmental ‘custom’ ” sufficient to establish causation. Id. at 690-91. It would be odd indeed to suggest that this interpretation has less force in the context of a suit against a private entity. See Powell, 678 F.2d at 506 (“No element of the Court’s ratio decidendi lends support for distinguishing the case of a private corporation.”). [3] To make out a claim against Desert Palace under Monell, Tsao must show that (1) Desert Palace acted under color of state law, and (2) if a constitutional violation occurred, the violation was caused by an official policy or custom of Desert Palace. See Harper v. City of Los Angeles, 533 F.3d 1010, 1024 (9th Cir. 2008). We address each requirement in turn.
Desert Palace is a private corporation. Although § 1983 makes liable only those who act “under color of” state law, “even a private entity can, in certain circumstances, be subject to liability under section 1983.” Villegas v. Gilroy Garlic FesTSAO v. DESERT PALACE, INC. 12861 tival Ass’n, 541 F.3d 950, 954 (9th Cir. 2008) (en banc). Specifically, a plaintiff must show that “the conduct allegedly causing the deprivation of a federal right [was] fairly attributable to the State.” Lugar v. Edmondson Oil Co., 457 U.S. 922, 937 (1982). “The Supreme Court has articulated four tests for determining whether a private [party’s] actions amount to state action: (1) the public function test; (2) the joint action test; (3) the state compulsion test; and (4) the governmental nexus test.” Franklin v. Fox, 312 F.3d 423, 444-45 (9th Cir. 2002). We hold that Desert Palace’s actions are “fairly attributable to the state” under the joint action test.14 [4] The joint action test asks “ ‘whether state officials and private parties have acted in concert in effecting a particular deprivation of constitutional rights.’ ” Id. at 445 (quoting Gallagher v. Neil Young Freedom Concert, 49 F.3d 1442, 1453 (10th Cir. 1995)). This requirement can be satisfied either “by proving the existence of a conspiracy or by showing that the private party was ‘a willful participant in joint action with the State or its agents.’ ” Id. (quoting Collins v. Womancare, 878 F.2d 1145, 1154 (9th Cir. 1989)). Ultimately, joint action exists when the state has “ ‘so far insinuated itself into a position of interdependence with [the private entity] that it must be recognized as a joint participant in the challenged activity.’ ” Gorenc v. Salt River Project Agric. Improvement & Power Dist., 869 F.2d 503, 507 (9th Cir. 1989) (alteration in original) (quoting Burton v. Wilmington Parking Auth., 365 U.S. 715, 725 (1961)). Particularly relevant here is the maxim that “if the state ‘knowingly accepts the benefits derived from unconstitutional behavior,’ . . . then the conduct can be treated as state action.” Id. (quoting Nat’l Collegiate Athletic Ass’n v. Tarkanian, 488 U.S. 179, 192 (1988)). [5] Desert Palace’s behavior qualifies as state action under 14 In view of our conclusion, we need not consider whether Tsao’s allegations are sufficient to meet the public function test or either of the other two tests for state action. 12862 TSAO v. DESERT PALACE, INC. the joint action test thanks to its system of cooperation and interdependence with the LVMPD. First, under the SILA program, some Desert Palace security personnel have the authority, normally reserved to the state, to issue a citation to appear in court for the crime of misdemeanor trespassing. To gain this authority, security guards must take a training course given by the LVMPD. This delegation of authority by the police department, Crumrine explained, helps “alleviate some of the manpower concerns of the police” by relieving them from responding to every claim of trespassing that arises at a casino. Security guards with SILA authority may not arrest a suspect who has an outstanding arrest warrant, so they routinely call the LVMPD’s records department to get information concerning warrants. The citations that security guards issue are no different from those issued by police officers, and failure to respond to them by appearing in court constitutes a separate offense. See NRS § 171.17785(1). [6] Desert Palace and the state are therefore joint participants in the SILA program, which produces benefits that accrue to both Desert Palace and the LVMPD. See Tarkanian, 488 U.S. at 192. By training Desert Palace security guards, providing information from the records department, and delegating the authority to issue citations, the State has “so far insinuated itself into a position of interdependence with [Desert Palace] that it must be recognized as a joint participant in the challenged activity.” Gorenc, 869 F.2d at 507. The existence of SILA authority pervasively affected Makeley’s interactions with Tsao. When Makeley dealt with Tsao, he was in a position to invoke his SILA authority to justify his actions, giving Tsao the (accurate) impression that he was “clothed with the authority of state law,” Williams v. United States, 341 U.S. 97, 99 (1951). For example, when Tsao told Makeley on the casino floor that she did not have identification, he told her that she would “rot in jail.” Back in the interview room, Makeley informed Tsao that because he “go[es] to all the classes just like the police department,” he TSAO v. DESERT PALACE, INC. 12863 “get[s] to write . . . tickets” just like they do, and that her options were to “carry ID and get the ticket” or “go to jail.” When Tsao complained that she did not know that she had to carry identification, Makeley told her that she would have to tell it to “the judge.” [7] Furthermore, as the facts of this case illustrate, Makeley’s ultimate decision to make what was in form a citizens’ arrest is part and parcel of the overall trespass enforcement program established by Desert Palace and LVMPD jointly. Under that program, Desert Palace security guards may not issue a citation unless they are able to identify their suspect. Makeley testified that he decided before he approached Tsao that he would either issue her a SILA or make a citizen’s arrest for trespassing, depending on whether he could identify her. Desert Palace’s trespass enforcement program therefore depended in its basic format on the cloak of state authority under which it operated. Lusby v. T.G. & Y. Stores, Inc., 749 F.2d 1423 (10th Cir. 1984), is instructive in this regard. In that case, the Tenth Circuit held that an off-duty police officer employed as a security guard was a state actor when he made a citizen’s arrest for shoplifting. Id. at 1429. Notably, the security guard told the plaintiff that “he was going to jail,” and the police department provided the store that employed him “with special forms prepared for merchants who detained suspected shoplifters which apparently allowed officers the discretion to issue a summons to a suspect . . . without taking the person to jail.” Id. at 1429-30. Thus, “the local police followed a policy that allowed [the security guard] to substitute his judgment for that of the police.” Id. at 1430. “Such cooperative activity between the police department and a private party,” the court concluded, “is sufficient to make [the guard] a party acting under color of state law.” Id. Just as in Lusby, Makeley did more than effectuate a citizen’s arrest—he purported to act on behalf of the state from 12864 TSAO v. DESERT PALACE, INC. the outset of the encounter. That pretense, although not conclusive, supports Tsao’s contention that Makeley was a state actor for purposes of § 1983. See Griffin v. Maryland, 378 U.S. 130, 135 (1964) (“If an individual is possessed of state authority and purports to act under that authority, his action is state action. It is irrelevant that he might have taken the same action had he acted in a purely private capacity . . . .”); see also Flagg Bros., 436 U.S. at 163 n.14; Traver v. Meshriy, 627 F.2d 934, 938 (9th Cir. 1980) (holding that an off-duty police officer employed as a bank security guard acted under color of law when he identified himself as a police officer to a bank robbery suspect); United States v. Temple, 447 F.3d 130, 139 (2d Cir. 2006). Given the particular characteristics of Desert Palace’s program for ousting unwanted gamblers, the District Court’s reliance on Collins v. Womancare, 878 F.2d at 1154, to reject the existence of state action was misplaced. In Collins, an abortion provider obtained an injunction prohibiting certain individuals from protesting immediately in front of its offices. 878 F.2d at 1146. When protestors not subject to the injunction demonstrated in front of the abortion provider, two of its employees effected a citizen’s arrest and turned the protestors over to a waiting policeman. Id. We held that the employees who made the arrest were not state actors, as the police played no role in initiating the arrests, conducted independent investigations, and maintained a policy of neutrality throughout. Consequently, the state had not “so far insinuated itself into a position of interdependence with [the defendant’s employees] that it must be recognized as a joint participant in the challenged activity.” Id. at 1155 (internal quotation marks omitted). [8] Unlike in Collins, Makeley invoked the authority of the state throughout the encounter with Tsao, stressing his authority under the SILA program. Then, Makeley and Crumrine acted in concert from the time Crumrine arrived at the casino. Crumrine did not simply effectuate a citizen’s arrest that had TSAO v. DESERT PALACE, INC. 12865 already been made, maintaining his neutrality throughout, nor did he “refuse[ ] . . . to arrest [Tsao] on his own authority.” 878 F.2d at 1155. Rather, he entered the room where Makeley was questioning Tsao and took over the investigation into Tsao’s identity. Crumrine asked numerous questions, searched Tsao’s purse and pockets, and talked to her lawyer when he arrived. Crumrine also directed Desert Palace security guards to locate Tsao’s car, which helped him determine her identity. Eventually, Crumrine and Makeley both signed the summons Tsao received for misdemeanor trespassing. Makeley, and therefore Desert Palace (if it was otherwise liable), was without a doubt engaged in joint action with the LVMPD when Makeley detained, investigated, arrested, and cited Tsao. Because we conclude that Desert Palace was a state actor, we must next consider whether the casino violated Tsao’s constitutional rights.
Desert Palace arrested Tsao for trespassing in violation of NRS § 207.200. Tsao argues that this arrest violated her Fourth Amendment rights because it was not supported by probable cause. See United States v. Thornton, 710 F.2d 513, 515 (9th Cir. 1983). Tsao had been ejected from Caesars Palace at least five times, most recently on September 23, 2007. If that were the end of the matter, it would be clear that she trespassed when she returned on March 19, 2008. See NRS § 207.200(1)(b); see also Jordan v. State ex rel. DMV & Pub. Safety, 110 P.3d 30, 47 (Nev. 2005), overruled on other grounds by Buzz Stew, LLC v. City of N. Las Vegas, 181 P.3d 670 (Nev. 2008). Tsao argues, however, that the promotional offers from Desert Palace effectively rescinded the earlier trespass warnings and invited her back onto the property, and that she therefore was not trespassing when she returned. The District Court rejected 12866 TSAO v. DESERT PALACE, INC. this argument, holding that (1) the promotional offers were not sufficient to rescind the earlier trespass warning as a matter of law; and (2) even if the promotional offers did represent consent to Tsao’s visit, Makeley still had probable cause to believe Tsao was trespassing because he was not aware of them. As an initial matter, Makeley’s ignorance of the invitations was not sufficient to defeat Tsao’s constitutional claim. Her suit is against Desert Palace, not Makeley. We have repeatedly held that “[i]f a plaintiff establishes he suffered a constitutional injury by the City, the fact that individual officers are exonerated is immaterial to liability under § 1983.” Fairley, 281 F.3d at 917. Fairley applied this rule to Fourth Amendment claims for arrest without probable cause, also at issue here, and made clear that the rule applies “whether the officers are exonerated on the basis of qualified immunity, because they were merely negligent, or for other failure of proof.” Id. at 916-17, 917 n.4 (citing Chew v. Gates, 27 F.3d 1432, 1438 (9th Cir. 1994)). Simply put, the fact that Makeley himself may have had probable cause to arrest Tsao is irrelevant in a suit against Desert Palace. See Restatement (Third) of Agency § 7.04 cmt. b (“If the agent’s conduct is not tortious, the principal is subject to liability if the same conduct on the part of the principal would have subjected the principal to tort liability. For example, an agent’s action may not be tortious because the agent lacks information known to the principal.”). Assuming the promotional offers were legally sufficient to constitute an invitation, Makeley’s ignorance of them has no bearing on whether Desert Palace, if otherwise liable, violated Tsao’s Fourth Amendment rights. Whether the invitations Tsao received from Desert Palace were sufficient to consent to her presence at the blackjack table is, as we explain later, a much more complicated issue, one that involves novel questions of state law. See pg. 12878 TSAO v. DESERT PALACE, INC. 12867 infra. Because we conclude that Tsao has not sufficiently alleged an “official policy, custom, or pattern” on the part of Desert Palace involving such invitations, we need not reach that state law issue, and do not do so.
[9] Tsao must demonstrate that an “official policy, custom, or pattern” on the part of Desert Palace was “the actionable cause of the claimed injury.” Harper, 533 F.3d at 1022, 1026. A “policy” is “ ‘a deliberate choice to follow a course of action . . . made from among various alternatives by the official or officials responsible for establishing final policy with respect to the subject matter in question.’ ” Long v. Cnty. of Los Angeles, 442 F.3d 1178, 1185 (9th Cir. 2006) (alteration in original) (quoting Fairley, 281 F.2d at 918). Gibson v. County of Washoe discussed two types of policies: those that result in the municipality itself violating someone’s constitutional rights or instructing its employees to do so, and those that result, through omission, in municipal responsibility “for a constitutional violation committed by one of its employees, even though the municipality’s policies were facially constitutional, the municipality did not direct the employee to take the unconstitutional action, and the municipality did not have the state of mind required to prove the underlying violation.” 290 F.3d at 1185-86 (citing City of Canton v. Harris, 489 U.S. 378, 387-89 (1989)). We have referred to these two types of policies as policies of action and inaction. Long, 442 F.3d at 1185. [10] A policy of inaction or omission may be based on failure to implement procedural safeguards to prevent constitutional violations. Oviatt v. Pearce, 954 F.2d 1470, 1477 (9th Cir. 1992). To establish that there is a policy based on a failure to preserve constitutional rights, a plaintiff must show, in addition to a constitutional violation, “that this policy ‘amounts to deliberate indifference’ to the plaintiff’s constitutional right[,]” Id. at 1474 (quoting Canton, 489 U.S. at 389), 12868 TSAO v. DESERT PALACE, INC. and that the policy caused the violation, “in the sense that the [municipality] could have prevented the violation with an appropriate policy.” Gibson, 290 F.3d at 1194. The Supreme Court has explained that these heightened requirements for establishing responsibility for a policy of omission are necessary to avoid imposing respondeat superior liability, which would run afoul of Monell. See Bd. of Cnty. Comm’rs v. Brown, 520 U.S. 397, 403-04 (1997). After all, when a municipal employee commits a constitutional tort, it could always be alleged that the municipality failed to enact a policy that would have prevented the tort. Without the rigorous state of mind requirements set out in Canton and subsequent cases, there would be nothing left of Monell’s rule against respondeat superior liability. See Connick v. Thompson, 131 S. Ct. 1350, 1359-60 (2011); Bd. of Cnty. Comm’rs, 520 U.S. at 406-07. Canton’s standards thus ensure that, even if the alleged defect in the municipality’s policy is one of omission, the acts of constitutional tortfeasors can still “fairly be said to be those of the municipality.” Bd. of Cnty. Comm’rs, 520 U.S. at 404. As the Supreme Court has also observed, however, such concerns are not present “[w]here a plaintiff claims that a particular municipal action itself violates federal law, or directs an employee to do so.” Id. Under this “direct path” to municipal liability, a plaintiff must “prove that the municipality acted with ‘the state of mind required to prove the underlying violation,’ just as a plaintiff does when he or she alleges that a natural person has violated his federal rights.” Gibson, 290 F.3d at 1185 (quoting Bd. of Cnty. Comm’rs, 520 U.S. at 405). [11] As Tsao has stated her claim, the alleged deficiency is properly seen as one of omission. Desert Palace in effect adopted two policies, with a gap between them that created the circumstances in which Tsao was arrested. First, Desert Palace keeps records of those it ejects from its casinos, and when those people return, it arrests them for trespassing or TSAO v. DESERT PALACE, INC. 12869 issues them citations under the SILA program. Second, Desert Palace sends promotional offers to repeat customers inviting them to visit the casino. Desert Palace’s security staff has no way of determining whether someone they are about to arrest for trespassing has in fact been invited onto the property, and the marketing staff apparently is not informed that someone has been warned never to return. Desert Palace conducts these two functions entirely separately, without any safeguard in place to prevent the situation that arose here. If any patron evicted by the security department were automatically removed from the marketing department’s mailing list, for instance, Tsao would not have received invitations, and there would be no question that she was trespassing. It is this gap in communication between the two departments, this omission, that led to the alleged constitutional violation in this case. A review of our case law on policies of commission further supports the idea that, as Tsao has stated her claim, the policy at issue here is one of omission. An official municipal policy, the Court has explained, “includes the decisions of a government’s lawmakers, the acts of its policymaking officials, and practices so persistent and widespread as to practically have the force of law.” Connick, 131 S.Ct. at 1359. Thus under the “direct path” to municipal liability, a policy may be facially unconstitutional, like “a city’s policy of discriminating against pregnant women in violation of the Fourteenth Amendment.” Gibson, 290 F.3d at 1185 (citing Monell, 436 U.S. at 658). Or the constitutional violation may be the result of a direct order from a policymaking official, like “a policy-maker’s order to its employees to serve capiases15 in violation of the Fourth Amendment.” Id. at 1185-86 (citing Pembaur v. City of Cincinnati, 475 U.S. 469 (1986)). There is no suggestion here 15 “A capias is a writ of attachment commanding a county official to bring a subpoenaed witness who has failed to appear before the court to testify and to answer for civil contempt.” Gibson, 290 F.3d at 1185 n.6 (quoting Pembaur, 475 U.S. at 472 n.1). 12870 TSAO v. DESERT PALACE, INC. that Desert Palace’s overall policy is to oust unwanted gamblers even though they have been invited onto the property, that there is any such persistent or widespread practice, or that a policymaking official directed Makeley to arrest her although the policymaker knew that she was at the casino by invitation.16 [12] As Tsao has stated her claim, the cause of her arrest is thus best seen as an omission in Desert Palace’s policies— the failure to create a coordination system between security and marketing. Tsao therefore must show “that [Desert Palace’s] deliberate indifference led to [this] omission.” Gibson, 290 F.3d at 1186. [13] To show deliberate indifference, Tsao must demonstrate “that [Desert Palace] was on actual or constructive notice that its omission would likely result in a constitutional violation.” Id. (citing Farmer, 511 U.S. at 841). Only then does the omission become “the functional equivalent of a decision by [Desert Palace] itself to violate the Constitution.” Connick, 131 S. Ct. at 1360. As we observed in Gibson, “[p]olicies of omission regarding the supervision of employees . . . can be ‘policies’ or ‘customs’ that create municipal liability . . . only if the omission ‘reflects a deliberate or conscious choice’ to countenance the possibility of a constitutional violation.” 290 F.3d at 1194 (quoting Canton, 489 U.S. at 389-90) (internal quotation marks omitted). Tsao has not alleged that Desert Palace had actual notice of the flaw in its policies. The question thus becomes whether the risk that security personnel might arrest someone who had 16 Makeley did consult with John Banner, the casino manager, before approaching Tsao. But when asked whether Banner had instructed him to arrest her if she didn’t have identification, Makeley insisted that “that call was mine.” Moreover, there is no indication that Banner knew, or was in a position to know, that Tsao had received promotional invitations covering the period in question. TSAO v. DESERT PALACE, INC. 12871 been invited to the casino was so “obvious” that ignoring it amounted to deliberate indifference. [14] Tsao has not introduced facts sufficient to make this showing. First, there is no indication that this problem has ever arisen other than in the case of Tsao herself. In considering claims based on a failure to train municipal employees, the Court has noted that “a pattern of similar constitutional violations by untrained employees is ‘ordinarily necessary’ to demonstrate deliberate indifference.” Connick, 131 S. Ct. at 1360 (quoting Bd. of Cnty. Comm’rs, 520 U.S. at 409). Similarly, the absence here of any evidence of a pattern makes it far less likely that Tsao can prove Desert Palace was “on actual or constructive notice,” Farmer, 511 U.S. at 841 (quoting Canton, 489 U.S. at 396) (internal quotation marks omitted), that its policy would lead to constitutional violations. [15] Second, it is far from obvious that the omissions in Desert Palace’s policies would necessarily give rise to this situation. Tsao is a professional gambler, and, having been kicked out of the casino at least five times under a variety of aliases, was well aware that she was most likely not welcome at the Caesars Palace blackjack tables. For the situation at the heart of this case to arise, two circumstances must coalesce: First, someone like Tsao—who knows that she is persona non grata as far as the casino is concerned—would have to give the casino her real name and address at some point, so they would appear on the marketing department’s mailing list for promotional offers. Second, the unwanted gambler would have to interpret those promotional offers as invitations overriding previous trespass warnings and decide to return to the casino. It is not “obvious” that both of these things will happen, and Tsao has not introduced any evidence suggesting that Desert Palace was on constructive notice that its policy’s omissions made this situation likely. Under Monell, a plaintiff must also show that the policy at issue was the “actionable cause” of the constitutional viola12872 TSAO v. DESERT PALACE, INC. tion, which requires showing both but-for and proximate causation. Harper, 533 F.3d at 1026. We are not convinced that the casino’s omission was the but-for cause of Tsao’s allegedly unlawful arrest. Even if marketing had told the security department that it sent Laurie Tsao an invitation, Makeley had no way at the outset of connecting the woman whose name was on the invitation with the woman he saw at the blackjack table. After all, Makeley had a record that she was ejected under the name Shuyu Deng; she was using a player’s card with the name Monica Lieu; she gave her name Laurie Chang; and she was not carrying identification. Makeley did not learn the name was Laurie Tsao until after he had detained her, handcuffed her, taken her to the interrogation room, and kept her there for some time. [16] For the foregoing reasons, we affirm the District Court’s grant of summary judgment as to Tsao’s § 1983 claim against Desert Palace.