Court Opinion

ID: 181366
Source: CourtListenerOpinion
Date Created: 2010-12-18 02:28:54+00
Date Added: 2024-06-11T17:25:55.148716
License: Public Domain

FILED
                            NOT FOR PUBLICATION                             DEC 17 2010

                                                                        MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                       U .S. C O U R T OF APPE ALS

                            FOR THE NINTH CIRCUIT

KEITH CHUNG,                                     No. 09-55587

              Plaintiff - Appellant,             D.C. No. 2:07-cv-07379-AHM-
                                                 VBK
  v.

CITY OF LOS ANGELES; KATHRYN                     MEMORANDUM *
PASCHAL, Los Angeles Police
Department Officer; HECTOR
GUTIERREZ, Los Angeles Police
Department Officer; ALAN
KREITZMAN, Los Angeles Police
Department Officer; ROLANDO
SOLANO, Los Angeles Police Department
Officer; SAUL PAREDES; BRAND
SECURITY CORPORATION;
HEATHER HOLDRIDGE;
INTELLECTUAL PROPERTY
ENFORCEMENT COMPANY; CARLOS
FERNANDEZ; JOHN FERNANDEZ,

              Defendants - Appellees.

                    Appeal from the United States District Court
                        for the Central District of California
                     A. Howard Matz, District Judge, Presiding

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
                      Argued and Submitted October 6, 2010
                              Pasadena, California

Before:        CUDAHY, ** Senior Circuit Judge, and WARDLAW and
               W. FLETCHER, Circuit Judges

      Plaintiff Keith Chung appeals from summary judgment granted to

defendants. For the reasons below, we AFFIRM the decision of the district court

with respect to Chung’s negligence and § 1983 claims against the city defendants;

AFFIRM with respect to Chung’s negligence and conversion claims against

defendant John Fernandez; and REVERSE with respect to Chung’s negligence and

conversion claims against defendants Brand Security Corporation, Heather

Holdridge, Intellectual Property Enforcement Company and Carlos Fernandez.

      1. The City Defendants

      a. § 1983 Actions

      In order to seize Chung’s goods without a warrant, the police needed to have

probable cause to believe that his goods were counterfeit. See G&G Jewelry, Inc.

v. City of Oakland, 989 F.2d 1093, 1099-1101 (9th Cir. 1993). In determining

whether an informant’s tip supplied officers with probable cause, we consider (a)

          **
             The Honorable Richard D. Cudahy, Senior United States Circuit
Judge for the Seventh Circuit, sitting by designation.

                                         2
the informant’s motivation to tell the truth, (b) the level of detail of description of

alleged wrongdoing and (c) the reliability of previous information provided. See

Illinois v. Gates, 462 U.S. 213, 234 (1983).

      We have noted that “[i]f the informant has provided accurate information on

past occasions, he may be presumed trustworthy on subsequent occasions.” United

States v. Angulo-Lopez, 791 F.2d 1394, 1397 (9th Cir. 1986) (citing United States

v. Alexander, 761 F.2d 1294, 1300 (9th Cir. 1985)). Further, “[w]hen the

information provided in the past involved the same type of criminal activity as the

current information, the inference of trustworthiness is even stronger.” Angulo-

Lopez, 791 F.2d at 1397 (citing Gates, 462 U.S. at 233). Still further, we have held

that there can be sufficient indicia of reliability even when an informant has a

motive to hurt the person against whom he or she is informing. See, e.g., United

States v. Willis, 647 F.2d 54, 58-59 (9th Cir. 1981). Finally, an informant’s

reliability can be demonstrated by independent police corroboration. Angulo-

Lopez, 791 F.2d at 1397 (citing United States v. Freitas, 716 F.2d 1216, 1222 (9th

Cir. 1983)).

      Carlos Fernandez was a trusted police source. Officer Kreitzman did an

internet search to verify Fernandez’s bona fides and some of the information

Fernandez provided police, such as the price of Bapes tennis shoes. Further, in

                                            3
their supplemental declarations, all five officers indicated that Fernandez and

Heather Holdridge gave them detailed information about the criteria for

determining which items were counterfeit, such as the stitching, the tags and the

placement of the logos and pockets. Finally, the suspiciously cheap price of the

“Bapes” shoes offered corroboration for the informants’ claims. It is true that

Fernandez and Holdridge, who work for apparel manufacturers, may have been

biased against Chung and therefore may have been inclined to overstate the amount

of allegedly counterfeit merchandise. But balanced against Fernandez’s past work

with the department, Kreitzman’s independent verification of Fernandez’s bona

fides and the detail of description the tipsters provided of Chung’s alleged

wrongdoing, the officers had probable cause to seize Chung’s merchandise.

      Federal Rule of Civil Procedure 56 (e) allows “affidavits to be supplemented

or opposed by depositions, answers to interrogatories, or further affidavits.”

Further, in Hoffman v. Tonnemacher, 593 F.3d 908 (9th Cir. 2010), we held that

“district courts have discretion to entertain successive motions for summary

judgment.” Id. at 911. “[A] successive motion for summary judgment is

particularly appropriate on an expanded factual record.” Id. Here, the district

court permitted the city defendants to amend their affidavits to testify as to one

issue of a material fact that remained in dispute. Chung was also given an

                                           4
opportunity to submit relevant evidence to contradict the evidence in the

supplemental declarations. The district court did not abuse its discretion in

entertaining a second motion for summary judgment. Id. at 911-12.

      b. Negligence Claims against the City Defendants

      Before bringing a negligence claim against a public entity, a claim must be

made to the California Victim Compensation and Government Claims Board.

California Government Code § 905.2(b)(3). In the case of injury to property, the

claim must be made within six months of the accrual of the cause of action. Id. at

§ 911.2(a). Chung brought his claims before the Board more than a year after his

case accrued, i.e. the date he was injured. See id. at § 901. His claims are therefore

time-barred. The time was not tolled while his criminal charges were pending. Id.

at § 945.3.

      2. The Private Defendants

      a. Negligence Claims

      The private defendants owed Chung a duty to inspect the goods with the care

expected of professional counterfeit investigators. Chung has raised a triable issue

of fact concerning whether the private defendants acted with such care. Gabriele

Goldaper declared that the only acceptable method of identifying counterfeit

merchandise is to examine it side by side with authentic merchandise. Theories of

                                          5
dueling experts create a triable issue of fact. Hernandez v. KWPH Enterprises, 116

Cal.App.4th 170, 175-6 (Cal. App. 2004).

       Chung, however, has failed to demonstrate that private defendant John

Fernandez participated in the negligent identification of the allegedly counterfeit

merchandise on the day of the seizure.

      Chung must also prove that he suffered damages as a result of the negligent

inspection. The district court held that in order to prove damages, Chung must

prove that his goods were not counterfeit. If his goods were counterfeit, he did not

suffer injury because he had no right to sell the counterfeit merchandise.

      Here, too, Chung raises an issue of triable fact. In her affidavit, Mrs. Chung

states that she put a distinctive mark on all of the merchandise in the store to

prevent fraudulent returns. Mr. Chung declared that the evidence he examined at

the September 11, 2008 inspection did not bear this distinctive mark and was

therefore not the merchandise seized from their store on June 26, 2006. Further, at

oral argument counsel for Brand Security and Heather Holdridge admitted that only

some of the clothing inspected during discovery bore this distinctive mark. If Mrs.

Chung’s statement is true, the admission that only some of the clothes bore the

mark thus partially corroborates Chung’s contention that the merchandise seized at

their store was replaced with other clothing for the inspection during discovery.

                                            6
Interpreting the evidence in the light most favorable to the plaintiffs, a juror could

conclude that genuine or off-brand merchandise was improperly seized from Cotton

Traders because of negligent identification, and that when the defendants realized

this mistake, they replaced at least some of the seized merchandise with

merchandise not seized from Chung’s store.

      The private defendants argue that even if they negligently supplied the police

with incorrect information about the allegedly counterfeit goods, their

communications are privileged under Cal. Civ. Code § 47(b). We disagree. It is

true that the California Supreme Court has interpreted Cal. Civ. Code 47(b)

expansively. The so-called “litigation privilege” shields communications to police

officers that initiate investigations. Hagberg v. Cal. Fed. Bank FSB, 32 Cal.4th

350, 364 (2004). But the California Courts have refused to extend this protection to

non-communicative conduct. Action Apartment Ass’n, Inc. v. City of Santa Monica,

41 Cal.4th 1232, 1248 (2007). “The distinction between communicative and

noncommunicative conduct hinges on the gravamen of the action. That is, the key

in determining whether the privilege applies is whether the injury allegedly resulted

from an act that was communicative in its essential nature.” Id., quoting Rusheen

v. Cohen, 37 Cal.4th 1048, 1058 (2006) (citations omitted, emphasis in original).

Similarly, the California courts have not shielded doctors for negligent medical

                                            7
examination. Mero v. Sadoff, 31 Cal.App.4th 1466, 1480 (1995). Here, the

gravamen of the action was not Fernandez and Holdridge’s communication with the

police; rather, it was their examination of the alleged counterfeit merchandise. It is

true that both Fernandez and Holdridge appeared to articulate the basis for their

determinations, but this was no more than a statement of what the officers were

witnessing. See Buchanan v. Maxfield Enters., Inc., 130 Cal.App.4th 418, 425

(2005).

      b. Conversion

      For the same reason the negligence claims survive, Chung’s conversion

claims against the private defendants survive. A juror could conclude that

Holdridge and Carlos Fernandez replaced the seized merchandise with other

counterfeit goods, thereby converting Chung’s merchandise. For the goods that

were produced on September 11 that had actually come from Chung’s store,

however, Chung’s conversion claim cannot survive. Carlos Fernandez and IPEC

merely serve as bailees for the Los Angeles Police who in turn serve as custodians

for the court. See, e.g. City of Garden Grove v. Superior Court, 157 Cal.App.4th

355, 366 (2007).

      Finally, conversion requires that the injured party have a right of possession

to the converted goods. Burlesci v. Petersen, 68 Cal.App.4th 1062, 1065 (1998).

                                           8
Defendants argue that Chung’s conversion claims cannot survive if the seized items

were counterfeit, because Chung had no “right of possession” to counterfeit goods.

For this proposition, they cite 18 U.S.C. § 2320. The statute subjects counterfeit

merchandise to forfeiture. But defendants read the statute too broadly. Even if

Chung’s merchandise were subject to forfeiture to the United States Government,

see id. at § 2323(a)(1), this did not entirely extinguish Chung’s right to possession.

Indeed, § 2323 outlines extensive procedures for forfeiting counterfeit merchandise.

It does not authorize any person, without limitation, to take counterfeit goods from

another.

      AFFIRMED in part, REVERSED in part. Costs on appeal shall be divided

between appellant Chung and Appellees Brand Security Corporation, Heather

Holdridge, Intellectual Property Corporation and Carlos Fernandez.

                                           9