Court Opinion

ID: 9944603
Source: CourtListenerOpinion
Date Created: 2024-02-26 18:01:00.892703+00
Date Added: 2024-06-11T14:20:01.057498
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

JERRY JAMGOTCHIAN; THETA                 No. 23-55735
HOLDING I, INC.,
                                           D.C. No.
             Plaintiffs-Appellants,     8:22-cv-01893-
                                          FWS-KES
 v.

GREGORY L. FERRARO; OSCAR                  OPINION
GONZALES; DENNIS ALFIERI;
DAMASCUS CASTELLANOS;
BRENDA DAVIS; THOMAS C.
HUDNUT; WENDY MITCHELL;
KIMBERLY SAWYER; LUIS
JAUREGUI; RICHARD WILLIAMS,

             Defendants-Appellees,

and

CALIFORNIA HORSE RACING
BOARD,

             Defendant.

      Appeal from the United States District Court
          for the Central District of California
      Fred W. Slaughter, District Judge, Presiding
2                     JAMGOTCHIAN V. FERRARO

                   Submitted January 8, 2024 *
                    San Francisco, California

                     Filed February 26, 2024

     Before: Marsha S. Berzon, Johnnie B. Rawlinson, and
              Daniel A. Bress, Circuit Judges.

                     Opinion by Judge Bress

                          SUMMARY **

                 Civil Rights/Issue Preclusion

    The panel reversed the district court’s holding that the
decision of the California Horse Racing Board (CHRB), the
state agency responsible for administering all laws, rules,
and regulations related to horse racing, precluded plaintiffs’
42 U.S.C. § 1983 action alleging First Amendment
violations arising from the refusal to register plaintiffs’
thoroughbred racehorse named Malpractice Meuser.
    The panel held that the district court erred by concluding
that the CHRB’s decision precluded plaintiffs’ § 1983

*
  The panel unanimously concludes this case is suitable for decision
without oral argument because we previously heard oral argument in
Case No. 23-55208, a prior appeal involving this same dispute and legal
issues. We have considered the briefing and argument in Case No. 23-
55208 in our resolution of this appeal.
**
  This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
                   JAMGOTCHIAN V. FERRARO                    3

action. For a state administrative agency decision to have
the same preclusive effect as a state court judgment, the
administrative proceeding must be conducted with sufficient
safeguards and satisfy the requirements of fairness outlined
in United States v. Utah Construction and Mining Co., 384
U.S. 394 (1966). Applying those fairness requirements, the
panel held that the CHRB did not and could not properly
resolve plaintiffs’ claims because under California law, the
CHRB lacked the authority to decide constitutional
claims. Accordingly, the agency decision had no preclusive
effect.
    The panel held that plaintiffs’ decision not to seek review
of the CHRB’s decision in state court did not imbue that
decision with preclusive effect because any requirement that
plaintiffs go to state court before filing suit under § 1983
would amount to an improper exhaustion prerequisite.

                         COUNSEL

John R. Sommer, John R. Sommar Attorney at Law, Villa
Park, California, for Plaintiffs-Appellants.
Kayi Okine, Deputy Attorney General; Kenneth C. Jones,
Supervising Deputy Attorney General; Chris A. Knudsen,
Senior Assistant Attorney General; Rob Bonta, Attorney
General of California; Office of the California Attorney
General, Los Angeles, California; for Defendants-
Appellees.
4                  JAMGOTCHIAN V. FERRARO

                         OPINION

BRESS, Circuit Judge:

    A dispute over a horse’s name has led to this appeal
about preclusion. The question is whether a state agency
decision precludes the plaintiffs’ § 1983 lawsuit. The
answer is “no.” The agency decision has no preclusive effect
because the agency lacked jurisdiction to decide the
constitutional issues that the plaintiffs now raise. Nor were
the plaintiffs required to seek review of the state agency’s
decision in state court before suing under § 1983. Two of
our past decisions created some confusion on these settled
issues in the court below. Taking this opportunity to address
those decisions, we reverse the district court’s dismissal of
the plaintiffs’ complaint and remand for further proceedings.
                              I
    Plaintiffs Jerry Jamgotchian and Theta Holdings I
(collectively, Jamgotchian) own a thoroughbred racehorse
named Malpractice Meuser. California law requires that all
thoroughbreds racing in California be registered with a
private organization called the Jockey Club of New York.
See Cal. Bus. & Prof. Code § 19416; Cal. Code Regs. tit. 4,
§ 1588(a)(1). Jamgotchian wanted to race Malpractice
Meuser in California, so he applied to register the horse with
the Jockey Club.
    The Jockey Club refused registration. It concluded that
the name Malpractice Meuser violated the Principal Rules
and Requirements of the American Studbook Rule 6.F.11,
which makes ineligible for use horse names “designed to
harass, humiliate, or disparage a specific individual.” The
Jockey Club believed that Malpractice Meuser was named
                   JAMGOTCHIAN V. FERRARO                   5

for Michael D. Meuser, a Kentucky lawyer specializing in
equine law. The Club instructed Jamgotchian to seek
registration for the horse under a different name.
    Jamgotchian did not do so and thus never obtained
Jockey Club registration. Nevertheless, Jamgotchian sought
to enter Malpractice Meuser in a race at California’s Los
Alamitos Race Course. The Los Alamitos Board of
Stewards denied entry. Stewards “have general authority
and supervision over all licensees and other persons
attendant on horses” and are responsible “for the conduct of
the race meeting[s] in every particular.” Cal. Code Regs. tit.
4, § 1527. The Stewards informed Jamgotchian that
Malpractice Meuser was ineligible to race because the horse
was not registered with the Jockey Club, as California
Business and Professions Code § 19416 requires.
    Jamgotchian appealed the Stewards’ decision to the
California Horse Racing Board (CHRB), the state agency
responsible for administering “all laws, rules, and
regulations affecting horse racing.” Cal. Bus. & Prof. Code
§ 19440(a)(3). Among other claims, Jamgotchian alleged
that the Stewards’ enforcement of the Jockey Club
registration requirement in § 19416 resulted in
impermissible viewpoint discrimination, contrary to the First
Amendment. Cf. Matal v. Tam, 582 U.S. 218, 243–44
(2017) (holding that the Lanham Act’s prohibition on
disparaging trademarks violates the First Amendment).
    Adopting a hearing officer’s written ruling, the CHRB
affirmed the Stewards’ determination that Malpractice
Meuser could not race absent Jockey Club registration. The
CHRB also offered commentary on why it believed that
Jamgotchian’s constitutional claims were not colorable.
But, importantly, the CHRB found that it lacked jurisdiction
6                  JAMGOTCHIAN V. FERRARO

to decide Jamgotchian’s constitutional claims. It explained
that, because the California Constitution bars state agencies
from declaring a statute unconstitutional or refusing to
enforce a statute on constitutional grounds unless an
appellate court has made that determination, Jamgotchian
was required to go to court for resolution of his constitutional
claims. See Cal. Const. Art. III. § 3.5. The CHRB concluded
that although it regarded Jamgotchian’s constitutional
claims as “unfounded,” they were “beyond the purview of
the CHRB in any event.”
    The CHRB decision advised Jamgotchian that a
California superior court would have authority to address his
constitutional claims. But Jamgotchian did not seek review
of the CHRB’s decision in state court. See Cal. Code. Civ.
Proc. § 1094.5 (procedures for writs of mandamus). Under
California law, a § 1094.5 writ petition is the “ordinary
means” for challenging a state agency decision in state court.
Chen Through Chen v. Albany Unified Sch. Dist., 56 F.4th
708, 724 n.6 (9th Cir. 2022). Instead of filing a § 1094.5
petition, Jamgotchian brought this lawsuit in federal court
under 42 U.S.C. § 1983 against individual Stewards and
CHRB members. In his complaint, Jamgotchian advanced
the constitutional claims he had presented to the CHRB and
sought a preliminary injunction permitting Malpractice
Meuser to race in California.
    Although the defendants had not raised the issue, the
district court requested briefing on whether the CHRB
proceedings were preclusive of Jamgotchian’s constitutional
claims. The district court subsequently concluded that
because the CHRB had already considered Jamgotchian’s
constitutional claims and Jamgotchian had not challenged
the CHRB’s decision in state court, the CHRB decision
precluded Jamgotchian’s § 1983 lawsuit. The district court
                  JAMGOTCHIAN V. FERRARO                   7

thus found that Jamgotchian was unlikely to succeed on the
merits and denied his request for a preliminary injunction.
    Jamgotchian appealed. While his appeal was pending,
the district court dismissed Jamgotchian’s complaint with
prejudice under Rule 12(b)(6), based on the same preclusion
rationale by which it had denied Jamgotchian’s request for a
preliminary injunction.      Jamgotchian then separately
appealed that judgment of dismissal.
    Because the denial of Jamgotchian’s request for a
preliminary injunction merged into the final judgment, we
dismissed Jamgotchian’s first appeal as moot. See, e.g., Am.
Soc’y of Journalists & Authors, Inc. v. Bonta, 15 F.4th 954,
959 (9th Cir. 2021). Before us now is Jamgotchian’s second
appeal, of the judgment of dismissal. We review the district
court’s dismissal of a complaint under Rule 12(b)(6) de
novo. Pardini v. Unilever U.S., Inc., 65 F.4th 1081, 1084
(9th Cir. 2023).
                             II
    The district court erred in concluding that the CHRB
decision, in combination with Jamgotchian not seeking
review of that decision in state court, precludes this § 1983
lawsuit.
                             A
    The CHRB’s decision does not preclude Jamgotchian’s
constitutional claims. Under 28 U.S.C. § 1738, federal
courts “give the same preclusive effect to state court
judgments as they would be given in the state in which they
are rendered.” Miller v. Cnty. of Santa Cruz, 39 F.3d 1030,
1032 (9th Cir. 1994). This statutory provision does not apply
to state administrative agency decisions. Univ. of Tenn. v.
Elliott, 478 U.S. 788, 796–97, 799 (1986). Nevertheless, the
8                  JAMGOTCHIAN V. FERRARO

Supreme Court has held that, as a matter of federal common
law, federal courts must sometimes accord preclusive effect
to state agency decisions. See id. at 797–98; see also Astoria
Fed. Savings & Loan Assoc. v. Solimino, 501 U.S. 104, 107–
08, 110 (1991); Miller, 39 F.3d at 1032; Guild Wineries &
Distilleries v. Whitehall Co., 853 F.2d 755, 758 (9th Cir.
1988). Although Congress may direct otherwise (and has
done so for some statutes), Congress “presumptively
intends” state agency determinations to have preclusive
effect in federal court. B & B Hardware, Inc. v. Hargis
Indus., Inc., 575 U.S. 138, 151 (2015) (citing Elliott, 478
U.S. at 796–99). This presumption applies to § 1983 suits.
See Elliott, 478 U.S. at 799. Still, whether an agency
decision has preclusive effect in a given § 1983 case requires
a detailed inquiry.
    To decide whether federal common law entitles a state
agency decision to preclusive effect, we proceed in two
steps. Our “threshold” task is “to determine whether the
state administrative proceeding was conducted with
sufficient safeguards to be equated with a state court
judgment.” Plaine v. McCabe, 797 F.2d 713, 719 (9th Cir.
1986). For an administrative proceeding to “rise to [this]
level,” id., it must “satisf[y] the requirements of fairness
outlined in” the Supreme Court’s decision in United States
v. Utah Construction and Mining Co., 384 U.S. 394, 422
(1966). Miller, 39 F.3d at 1032–33 (brackets omitted)
(quoting Guild Wineries, 853 F.2d at 758). The so-called
Utah Construction “fairness requirements” are: “(1) that the
administrative agency act in a judicial capacity, (2) that the
agency resolve disputed issues of fact properly before it, and
(3) that the parties have an adequate opportunity to litigate.”
Id. at 1033 (citing Utah Construction, 384 U.S. at 422). The
second prong of Utah Construction—about the capacity of
                   JAMGOTCHIAN V. FERRARO                    9

the agency to resolve disputed facts—“encompass[es]
disputed issues of law as well.” Guild Wineries, 853 F.2d at
759 & n. 7 (citing Eilrich v. Remas, 839 F.2d 630, 633–34 &
n.2 (9th Cir. 1988)); see also Miller, 39 F.3d at 1032.
     If a state agency proceeding satisfies the Utah
Construction factors, we then turn to state law to “determine
if, under [state law], the [agency’s] decision would be given
preclusive effect.” Guild Wineries, 853 F.2d at 761. At this
step, “we will defer to the considered judgment of the courts
of [the state] that an unreviewed agency determination . . . is
equivalent to a state court judgment entitled to res judicata
and collateral estoppel effect.” Miller, 39 F.3d at 1038. If
an agency proceeding does not meet the “minimum criteria
of Utah Construction,” however, we deny preclusive effect,
state law notwithstanding. Id.; see also id. at 1033
(explaining that “although a federal court should ordinarily
give preclusive effect when the state court would do so,
‘there may be occasions where a state court would give
preclusive effect to an administrative decision that failed to
meet the minimum criteria set down in Utah Construction’”)
(quoting Plaine, 797 F.2d at 719 & n.13); Olson v. Morris,
188 F.3d 1083, 1086 (9th Cir. 1999) (“We have denied
preclusive effect to administrative agency determinations
where the plaintiff was denied an adequate opportunity to
litigate issues regardless of whether the state court would
have done so.”) (citing Mack v. S. Bay Beer Distribs., Inc.,
798 F.2d 1279, 1283–84 (9th Cir. 1986)).
    In this case, the district court’s preclusion determination
runs aground on Utah Construction’s second prong: the
requirement that the agency resolve disputed issues of fact
and law “properly before it.” Guild Wineries, 853 F.2d at
759 & n.7. “An issue is ‘properly before an administrative
tribunal if that body has jurisdiction to decide it,’ [as] a
10                 JAMGOTCHIAN V. FERRARO

matter of state law.” Misischia v. Pirie, 60 F.3d 626, 630
(9th Cir. 1995) (quoting Guild Wineries, 853 F.2d at 759).
Thus, “[w]e deny preclusive effect, in general, when the
adjudicator lacks jurisdiction to determine an issue.” Miller,
39 F.3d at 1038.
    Here, the CHRB expressly recognized that it lacked the
authority to decide Jamgotchian’s constitutional claims,
because California law provides that state agencies like the
CHRB have “no power” to refuse to enforce a statute on
constitutional grounds, or to declare a statute
unconstitutional unless a court has already done so. Cal.
Const. Art. III, § 3.5(a).      Accordingly, the CHRB
acknowledged that it was “prohibited” from refusing to
enforce the state law Jockey Club registration requirement
based on the constitutional arguments that Jamgotchian
raised. The CHRB thus did not, and could not, “properly”
resolve those disputed issues, as prong two of Utah
Construction requires. 384 U.S. at 422; see also, e.g., Guild
Wineries, 853 F.2d at 759.
    It is irrelevant for preclusion purposes that the CHRB
also offered its extra-jurisdictional thoughts on the
constitutional questions.        The inquiry under Utah
Construction prong two is not whether the state agency
pontificated on the issues, but whether it “ha[d] jurisdiction
to decide” them. Misischia, 60 F.3d at 630 (quoting Guild
Wineries, 853 F.2d at 759). Here, it did not—by its own
reckoning, as well as on our independent understanding of
California law. See Cal. Const. Art. III. § 3.5.
    Our precedent is clear: because the CHRB “lack[ed]
jurisdiction to determine” Jamgotchian’s constitutional
claims, “[w]e deny preclusive effect.” Miller, 39 F.3d at
1038 (citing Shaw v. Calif. Dept. of Alcoholic Beverage
                       JAMGOTCHIAN V. FERRARO                          11

Control, 788 F.2d 600, 608 (9th Cir. 1986)). And because
the federal Utah Construction factors are not all satisfied, it
is beside the point whether California law would accord
preclusive effect to the CHRB decision in the circumstances
presented. See Olson, 188 F.3d at 1086; Miller, 39 F.3d at
1033; Plaine, 797 F.2d at 719 & n.13. 1
                                   B
    Jamgotchian’s decision not to seek review of the
CHRB’s ruling in state court did not imbue the CHRB
decision—or, in reality, its lack of decision—with preclusive
effect.
    The district court’s contrary conclusion effectively
imposed on Jamgotchian the requirement that he exhaust
state court remedies to avoid the CHRB decision precluding
this lawsuit. That requirement is contrary to the “settled
rule” that “‘exhaustion of state remedies is not a prerequisite
to an action under 42 U.S.C. § 1983.’” Knick v. Twp. of
Scott, 139 S. Ct. 2162, 2167 (2019) (quoting Heck v.
Humphrey, 512 U.S. 477, 480 (1994)); see also id. at 2172–
73 (explaining that “[t]he general rule is that plaintiffs may
bring constitutional claims under § 1983 without first
bringing any sort of state lawsuit, even when state court
actions addressing the underlying behavior are available”)

1
  Our cases have stated that “[b]ecause California has adopted the Utah
Construction standard, we give preclusive effect to a state administrative
decision if the California courts would do so.” Doe v. Regents of the
Univ. of Cal., 891 F.3d 1147, 1155 (9th Cir. 2018) (citing Miller, 39 F.3d
at 1032–33); see also Plaine, 797 F.2d at 719 n.13. As we have noted,
if we determine that the Utah Construction factors are not met, the
agency decision lacks preclusive effect. In this case, however, we
believe California courts would likewise conclude that the Utah
Construction factors are not met, as we discuss below.
12                 JAMGOTCHIAN V. FERRARO

(quotations omitted); Pakdel v. City & Cnty. of S.F., Cal.,
141 S. Ct. 2226, 2230 (2021) (per curiam); Patsy v. Bd. of
Regents of Fla., 457 U.S. 496, 501 (1982). If a litigant
pursues and obtains state court or state agency resolution of
a matter, those decisions can be preclusive in a later § 1983
lawsuit in federal court. See, e.g., Elliot, 478 U.S. at 796–
97. But by treating the CHRB decision as preclusive of
issues it could not decide because Jamgotchian did not seek
mandamus review in state court, the district court imposed
an exhaustion-type requirement of the sort that contravenes
Supreme Court precedent on § 1983.
    Such an exhaustion requirement springs an improper
“preclusion trap” for § 1983 plaintiffs. Knick, the Supreme
Court’s recent foray into this area, illustrates the issue. In
Knick, the Court overturned its earlier rule from Williamson
County Regional Planning Commission v. Hamilton Bank of
Johnson City, 473 U.S. 172 (1985), that a property owner
could not bring a federal Takings Clause claim under § 1983
until a state court had denied his claim for just compensation
under state law. Id. at 2167–68. The problem with that rule,
Knick explained, was that in “effectively establish[ing] an
exhaustion requirement” for § 1983 takings claims,
Williamson County created an untenable “Catch-22.” Id. at
2167, 2173. The upshot was that a takings plaintiff could
not “go to federal court without going to state court first,”
but if he went to state court and lost, his claims would be
“barred in federal court” by preclusion doctrines. Id. at
2167. Hence, the “preclusion trap.” Id. This result was not
permissible because it caused the “guarantee of a federal
forum” for federal claims cognizable under § 1983 to “ring[]
hollow.” Id. And although Williamson County located its
decision in an interpretation of the Takings Clause, had it
                   JAMGOTCHIAN V. FERRARO                    13

phrased its holding in terms of the exhaustion of state
remedies, “its error would have been clear.” Id. at 2173.
     If we accepted the district court’s view that Jamgotchian
was required to pursue state court mandamus review of the
CHRB’s decision to prevent that decision from precluding
his § 1983 claims, Jamgotchian would face a preclusion trap
akin to the one Knick rejected. Id. The result would be that
Jamgotchian—with his constitutional claims yet undecided
by any jurisdictionally competent body—could not assert
those claims in federal court without going to state court
first. Yet, if the state court rejected Jamgotchian’s claims,
he would then be precluded from bringing them in federal
court. See ReadyLink Healthcare, Inc. v. State Comp. Ins.
Fund, 754 F.3d 754, 761–62 (9th Cir. 2014). Jamgotchian’s
ability to have his constitutional claims heard in federal court
would be conditioned on, but simultaneously threatened by,
his resort to state court. That heads-I-win-tails-you-lose
result is inconsistent with Knick and the precedent on which
it is founded.
    Our cases have noted that “[i]n California, ‘exhaustion
of judicial remedies is necessary to avoid giving binding
effect to an administrative agency’s decision.’” Doe, 891
F.3d at 1155 (quoting Johnson v. City of Loma Linda, 5 P.3d
874, 879 (Cal. 2000)) (internal alterations omitted). But
California courts decline to afford preclusive effect to
agency decisions over which the agency lacked jurisdiction.
In City & County of San Francisco v. Padilla, 23 Cal. App.
3d 388, 400 (1972), for example, the California Court of
Appeals concluded that a decision by a Board of Permit
Appeals did not have preclusive effect in a state court
nuisance action because the Board lacked subject matter
jurisdiction over the decision. And in applying the Utah
Construction factors to a decision by the Department of
14                 JAMGOTCHIAN V. FERRARO

Social Services, the California Supreme Court recited the
requirement that the Department must have “had jurisdiction
to decide th[e] issue” under its governing statute for its
decision to be given preclusive effect. People v. Sims, 32
Cal.3d 468, 481 (1982); see also Murray v. Alaska Airlines,
Inc., 237 P.3d 565, 571 (Cal. 2010) (reaffirming the Utah
Construction analysis conducted in Sims). Under California
law, “[t]he doctrine of exhaustion of judicial remedies
applies where . . . the prior administrative proceedings
possessed the requisite judicial character such that they
yielded decisions or findings that could later be given
preclusive effect.” Alborzi v. Univ. of S. Cal., 269 Cal. Rptr.
3d 295, 310 (Cal. Ct. App. 2020) (emphasis added and
internal quotation marks omitted).           Because judicial
exhaustion is a requirement for avoiding the preclusive
effect of agency decisions, it logically is inapplicable where
the agency decision would not be given preclusive effect in
the first place.
    Of course, even assuming that the exhaustion
requirement would apply under California law, we “defer to
the considered judgment of the courts of California” only
“[s]o long as the minimum criteria of Utah Construction are
met.” Miller, 39 F.3d at 1038. As we have explained, those
“minimum criteria” are not met here.
    The State argues on appeal that the district court’s ruling
sets no preclusion trap because Jamgotchian chose to appeal
the Stewards’ decision to the CHRB, as opposed to going
directly to federal court first. On this view, Jamgotchian’s
election to seek relief before the CHRB subjected him to the
remaining requirements of California’s legal system,
including the alleged requirement that Jamgotchian pursue
his remedies in state court through a § 1094.5 writ petition
                   JAMGOTCHIAN V. FERRARO                   15

to avoid preclusion by a decision of an agency that lacked
jurisdiction to decide the relevant issues.
    The State is mistaken. By seeking relief before the
CHRB, Jamgotchian did expose himself to the risk that the
CHRB’s decision would preclude a later § 1983 lawsuit—
had the CHRB ruled on his claims in a proper exercise of its
jurisdiction. See Elliot, 478 U.S. at 796–97. If Jamgotchian
had chosen to seek relief in state court, he would have
created the same risk. But when the outcome of the CHRB
process was that the CHRB lacked jurisdiction to decide the
relevant issues—meaning that Jamgotchian was no farther
along than when he started—requiring Jamgotchian to
pursue his claims in state court would indeed ensnare him in
a preclusion trap. He would be forced to exhaust a state court
process the result of which could then preclude him from
bringing a § 1983 lawsuit.
    That type of exhaustion requirement is improper under
§ 1983. The second Utah Construction factor requires that
the issues be properly before the agency, and, as we have
explained, “[a]n issue is properly before an administrative
tribunal if that body has jurisdiction to decide it.” Misichia,
60 F.3d at 630 (quoting Guild Wineries, 759 F.2d at 759).
Utah Construction does not itself impose any exhaustion
requirements, nor does the second Utah Construction
factor—framed in terms of the agency’s authority—include
consideration of what a state court could later decide were
the matter presented to it. When the CHRB lacked
jurisdiction, as here, its decision lacked preclusive effect
under Utah Construction.             Any requirement that
Jamgotchian go to state court before filing suit under § 1983
would amount to an improper exhaustion prerequisite.
16                JAMGOTCHIAN V. FERRARO

                             C
   The district court reached its contrary result on these
questions by relying principally on our past decisions in
Miller v. County of Santa Cruz, 39 F.3d 1030 (9th Cir. 1994),
and Doe v. Regents of the University of California, 891 F.3d
1147 (9th Cir. 2018). Neither case supports treating
Jamgotchian’s § 1983 lawsuit as precluded.
    Miller concerned a plaintiff, Miller, who was dismissed
from his position in the Santa Cruz County Sheriff’s
Department and then contested his dismissal before the
County’s Civil Service Commission. 39 F.3d at 1032. After
an evidentiary hearing, the Commission ruled against Miller
and notified him of his right to seek judicial review of its
decision in California state court under California Code of
Civil Procedure § 1094.5. Id. Miller instead brought a
§ 1983 suit against the County in federal court. Id. The
district court found that Miller’s § 1983 claims were
precluded by the Commission’s ruling and granted summary
judgment for the County. Id.
    We affirmed because the Commission’s proceeding
satisfied both Utah Construction and California preclusion
law. Id. at 1032–38. Unlike in this case, there was no
suggestion that the Commission lacked jurisdiction to decide
Miller’s claims. Indeed, in listing reasons why an agency
proceeding might fail to pass muster under Utah
Construction, Miller specifically recognized that “[w]e deny
preclusive effect . . . when the adjudicator lacks
jurisdiction.” 39 F.3d at 1038. Here, as we have explained,
the CHRB lacked jurisdiction in all relevant respects.
   Nor does Miller require § 1983 plaintiffs to exhaust state
remedies before suing in federal court. At points in our
analysis in Miller, we referenced Miller’s ability to seek
                    JAMGOTCHIAN V. FERRARO                    17

judicial review in state court of the Commission’s decision.
Id. at 1033, 1038. For example, we stated that “[w]here, as
here, the agency adjudication meets the requirements of due
process, and de novo judicial review is available, concerns
of comity and finality counsel against denying preclusive
effect.” Id. at 1038 (citation omitted). But we did not
thereby impose an exhaustion requirement that would be
contrary to Supreme Court precedent.
    Instead, Miller generally reiterated a far more modest
proposition from our past cases: that a state agency decision
can have preclusive effect in future federal lawsuits even
though the plaintiff did not seek review of the agency
decision in state court. See id. at 1033. That this principle
was determinative is made apparent by Miller’s reliance on
our earlier decisions in Plaine v. McCabe, 797 F.2d 713 (9th
Cir. 1986) and Eilrich v. Remas, 839 F.2d 630, 633–34 & n.2
(9th Cir. 1988). See Miller, 39 F.3d at 1033 (discussing
these two cases). In Plaine, we noted that the plaintiff’s
decision not to seek state court review of a state agency
decision “d[id] not diminish [the agency decision’s]
preclusive effect in federal court.” 797 F.2d at 719 n.12. In
Eilrich, we similarly rejected the argument that an
“administrative decision was not preclusive because it was
not reviewed by the California courts,” when the plaintiff
failed to seek state court review of the agency decision. 839
F.2d at 632. Plaine and Eilrich merely confirm that for a
state agency decision to have preclusive effect in federal
court, it is not a prerequisite that plaintiffs have sought state
court review of the agency decision. In other words, when
such judicial review is available, plaintiffs cannot “obstruct
the preclusive use of the state administrative decision simply
by foregoing the right to appeal.” Miller, 39 F.3d at 1033
(quoting Eilrich, 839 F.2d at 632).
18                 JAMGOTCHIAN V. FERRARO

    This reasoning does not impose an exhaustion
requirement for § 1983 plaintiffs.           “No exhaustion
requirement ha[d] been imposed on Miller,” we explained;
instead, any preclusive effect of the state agency decision
resulted from Miller’s “election to pursue his claim initially
in an administrative forum, and to forego his right to seek
judicial review in state court,” and preclusion could apply
only to “all that was, or could have been, determined” by the
agency. Id. at 1034 n.3. This explanation did not mean that
Miller was required to exhaust state judicial remedies as to
issues the agency could not and did not decide before suing
under § 1983 (which would set a preclusion trap). Id.
    It follows that when we stated in Miller that “the
availability of judicial review, even if not always
determinative, is of critical importance here,” id. at 1038, we
likewise did not impose an exhaustion requirement for
§ 1983 plaintiffs. That interpretation of Miller would of
course be at war with Miller itself, which specifically
disclaimed that it was imposing any exhaustion rule, and, in
the language quoted above, recognized that “the availability
of judicial review[] . . . [is] not always determinative.” See
id. at 1034 n.3. Instead, Miller invoked the state review
process as part of underscoring why it was fundamentally
fair to treat the agency’s decision as preclusive. Indeed, we
would later hold that the availability of judicial review is a
requirement for a state agency decision to have preclusive
effect under Utah Construction. See Wehrli v. County of
Orange, 175 F.3d 692, 694–95 (9th Cir. 1999). Again, per
Miller, the preclusive effect of a state agency decision can
extend only to “all that was, or could have been, determined
there.” 39 F.3d at 1034 n.3. Here, because the CHRB lacked
jurisdiction to vindicate Jamgotchian’s constitutional
challenge to the governing statute, nothing “was, or could
                  JAMGOTCHIAN V. FERRARO                  19

have been, determined” regarding those arguments before
the CHRB that would preclude this § 1983 lawsuit.
    Our prior decision in Doe also does not authorize the
district court’s preclusion determination. In Doe, an
adjudicatory committee at the University of California Santa
Barbara (UCSB) found that Doe, a student, had sexually
assaulted another student during a trip to Lake Tahoe. The
committee decided that, as punishment, Doe should be
suspended from school. 891 F.3d at 1150. Like Miller, Doe
could have sought mandamus review of the committee’s
decision in California state court under § 1094.5. Id. at
1151. But he declined to do so. Id. Instead, Doe filed a
§ 1983 suit in federal court, alleging procedural due process
violations in the UCSB committee’s handling of his hearing.
Id.
    We concluded that Doe’s § 1983 claim was “precluded
because he has failed to exhaust judicial remedies by filing
a § 1094.5 writ petition in state court.” Id. at 1154. We
began by explaining that, as a matter of federal common law,
we give preclusive effect to state agency proceedings that
meet the Utah Construction “fairness requirements.” Id.
And we noted that “[w]e evaluate the fairness of a state
administrative proceeding by resort to both the underlying
administrative proceeding and the available judicial review
procedure,” with a § 1094.5 writ petition “provid[ing] ‘an
adequate opportunity for de novo judicial review.’” Id.
(quoting Miller, 39 F.3d at 1033). We then concluded in
relevant part as follows:

       Because California has adopted the Utah
       Construction standard, we give preclusive
       effect to a state administrative decision if the
       California courts would do so. In California,
20                 JAMGOTCHIAN V. FERRARO

       exhaustion of judicial remedies . . . is
       necessary to avoid giving binding effect to an
       administrative agency’s decision. A party
       must exhaust judicial remedies by filing a
       § 1094.5 petition, the exclusive and
       established process for judicial review of an
       agency decision. UCSB’s suspension of Doe
       is the sort of adjudicatory, quasi-judicial
       decision that is subject to the judicial
       exhaustion requirement.
       It is undisputed that Doe has not filed a
       § 1094.5 petition in state court.       ....
       Therefore, Doe has not exhausted his judicial
       remedies.

Id. at 1155 (quotations, citations, and brackets omitted). On
this basis, we held that the district court should have
dismissed Doe’s § 1983 claims without prejudice. Id.
     In seemingly imposing a judicial exhaustion requirement
on a § 1983 plaintiff, Doe appears inconsistent with Knick
and other authorities. Doe never addressed settled precedent
holding that exhaustion of state judicial remedies is not a
prerequisite to filing suit under § 1983. And whereas Miller
and other precedents invoked the availability of state judicial
review in explaining why it was fundamentally fair to accord
preclusive effect to state agency decisions under Utah
Construction, Doe appears to go a step further, faulting a
§ 1983 plaintiff for his failure to exhaust state court review
processes. Jamgotchian fairly argues that Doe’s reasoning
is in substantial tension with Knick and other cases rejecting
exhaustion requirements for § 1983 suits.
                   JAMGOTCHIAN V. FERRARO                  21

    But we need not reach the issue of Doe’s continued
vitality after Knick or decide whether we would be permitted
to reach that issue as a three-judge panel. See Miller v.
Gammie, 335 F.3d 889, 893 (9th Cir. 2003) (en banc)
(holding that a three-judge panel does not follow circuit
precedent when “the reasoning or theory of our prior circuit
authority is clearly irreconcilable with the reasoning or
theory of intervening higher authority”). Those are
important questions. But because we can resolve this appeal
without confronting them, they are matters for another day.
    Doe does not govern this case for the basic reason that,
again, the agency here lacked jurisdiction to decide the
claims that Jamgotchian now seeks to raise in his § 1983 suit.
Doe did not, and could not, overrule our longstanding
precedent that an agency decision does not have preclusive
effect under Utah Construction when the agency lacked
jurisdiction over the federal issue sought to be raised under
§ 1983. See Misischia, 60 F.3d at 630; Miller, 39 F.3d at
1033; Guild Wineries, 853 F.2d at 759. In noting that “[w]e
evaluate the fairness of a state administrative proceeding by
resort to both the underlying administrative proceeding and
the available judicial review procedure,” Doe, 891 F.3d at
1154, Doe did not suggest that this point extends to issues
over which an agency lacks jurisdiction, which would
collapse Utah Construction’s second and third prongs and
render the second prong a nullity. Indeed, we have never
suggested that state court review processes could always be
a curative for any Utah Construction deficiencies that might
exist at the agency level. As our discussion above of Miller
emphasized, we have for the most part invoked the
availability of state court review processes when explaining
why it is ultimately fair to accord preclusive effect to the
state agency decision itself.
22                 JAMGOTCHIAN V. FERRARO

    In addition, and more generally, although Doe relied on
California preclusion law based on California’s own
adoption of Utah Construction, see 891 F.3d at 1155, Doe
did not, and again could not, reject our case law recognizing
that preclusion does not apply when the Utah Construction
factors are not all met. See Olson, 188 F.3d at 1086; Miller,
39 F.3d at 1033; Plaine, 797 F.2d at 719 & n.13. And as to
California preclusion law, Doe did not address whether
California would require a plaintiff to seek state court review
to avoid the supposed preclusive effect of an agency decision
that lacked jurisdiction over the relevant issues. As we have
noted, it does not appear that California courts would impose
such a requirement.
    True, when discussing the factual background of the
case, Doe did mention that in the district court, Doe had
alleged “that UCSB lacked jurisdiction over the Lake Tahoe
trip.” 891 F.3d at 1151. This was apparently a reference to
the possibility that UCSB could not punish Doe for off-
campus conduct. But Doe did not rely on this allegation in
its merits discussion, and it is not apparent that Doe, which
focused on exhaustion, evaluated the Utah Construction
factors in any meaningful way. It certainly did not do so as
to Utah Construction prong two. Doe, which did not address
the preclusion implications of a lack of jurisdiction at the
administrative level, thus cannot be considered authoritative
on that point. See, e.g., United States v. Corrales-Vazquez,
931 F.3d 944, 954 (9th Cir. 2019) (“Cases are not
precedential for propositions not considered, or for questions
which merely lurk in the record.”) (citations, alterations, and
quotations omitted). In any event, in Doe the argument
appears to have been that UCSB in issuing its suspension
decision exceeded its authority. In this case, the CHRB
                   JAMGOTCHIAN V. FERRARO                    23

clearly lacked jurisdiction and so recognized, disclaiming its
ability to decide the relevant issues.
    We have never held that an agency’s jurisdiction-
wanting non-decision has preclusive effect in a later § 1983
suit. Nor have we held that the failure to pursue state court
review of such a non-decision precludes a corresponding
§ 1983 claim in federal court. Those propositions are
inconsistent with settled precedent.
                       *       *       *
    For the foregoing reasons, the CHRB’s decision does not
preclude Jamgotchian’s § 1983 claims. The judgment of the
district court is reversed, and the case is remanded for further
proceedings. Given our decision on preclusion, we do not
reach Jamgotchian’s argument that he had no available
§ 1094.5 writ remedy in state court. Nor do we reach the
defendants’ alternative arguments for affirmance, which the
district court has yet to consider.
   REVERSED AND REMANDED.