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The Koala v. Khosla

United States Court of Appeals, Ninth Circuit

July 24, 2019

The Koala, an unincorporated student association, Plaintiff-Appellant,
v.
Pradeep Khosla, in his official capacity as Chancellor of the University of California, San Diego; Daniel Juarez, in his official capacity as President of the Associated Students of the University of California, San Diego; Justin Pennish, in his official capacity as Financial Controller of the Associated Students of the University of California, San Diego, Defendants-Appellees.

          Argued and Submitted June 8, 2018 Pasadena, California

          Appeal from the United States District Court for the Southern District of California Jeffrey T. Miller, District Judge, Presiding D.C. No. 3:16-cv-01296-JM-BLM

          John David Loy (argued), ACLU Foundation of San Diego & Imperial Counties, San Diego, California; Ryan T. Darby, The Law Office of Ryan T. Darby, San Diego, California; for Plaintiff-Appellant.

          William John Carroll (argued), Matthew W. Callahan, and Jean-Paul P. Cart, Schiff Hardin LLP, San Francisco, California, for Defendants-Appellees.

          Jean-Paul Jassy and Kevin L. Vick, Jassy Vick Carolan LLP, Los Angeles, California; Samantha Harris, Vice President of Policy Research, Foundation for Individual Rights in Education (FIRE), Philadelphia, Pennsylvania; Ilya Shapiro, Cato Institute, Washington, D.C.; for Amici Curiae Foundation for Individual Rights in Education and Cato Institute.

          Judy Endejan and Garvey Schubert Barer, Seattle, Washington, for Amici Curiae the Student Press Law Center, American Society of News Editors, Associated Press Media Editors, Association of Alternative Newsmedia, College Media Association, First Amendment Coalition, Reporters Committee for Freedom of the Press, and Society of Professional Journalists.

          Before: Raymond C. Fisher and Morgan Christen, Circuit Judges, and Edward F. Shea, [*] District Judge.

         SUMMARY [**]

         Civil Rights

         The panel reversed in part and vacated in part the district court's dismissal of a complaint in an action brought by The Koala, a registered student organization at the University of California, San Diego, alleging that the student government's passage of the Media Act, which eliminated registered student organization funding for all print media, violated The Koala's First Amendment rights.

         The Koala alleged that the student government passed the Media Act two days after The Koala published an article in its newspaper satirizing the concept of "safe spaces" and "trigger warnings" on college campuses. The article generated numerous complaints from students and administrators and prompted the University to publicly denounce the article's offensive language.

         In reversing the district court's dismissal, the panel held that the Eleventh Amendment did not bar The Koala's claims for prospective injunctive relief. The panel held that accepting the allegations in the Second Amended Complaint as true, the Complaint did not run afoul of the sovereign immunity doctrine because The Koala sought only a return of eligibility to apply for funding, not an order directing the state to fund it. Moreover, the panel noted that because the compulsory activity fees collected by the University are remitted to the associated student government for reallocation, the suit's outcome would not increase or decrease the overall financial burden on the state; it would affect only which student organizations could apply for student activity fees and, potentially, how the total student activity fund was distributed.

         In vacating the district court's dismissal of the Free Press Clause claim, the panel held that where a complaint alleges that the State singled out the press by withholding a subsidy in response to disfavored speech, the complaint alleges a viable Free Press Clause cause of action. The panel held that the Second Amended Complaint's Free Press Clause claim was sufficient to survive defendants' motion to dismiss because it alleged that the Media Act was passed for the express purpose of silencing a newspaper, and that defendants singled out The Koala for a disparate financial burden.

         The panel vacated the district court's dismissal of The Koala's freedom of speech claim, which alleged that defendants violated its First Amendment right to free speech by creating a limited public forum consisting of the student activity fund, and then closing a portion of the forum for the purpose of denying The Koala access to it. The district court determined that the media funds category of the student activity fund was a limited public forum that the University was free to close. The panel held that the student activity fund was the relevant forum for purposes of assessing the permissibility of defendants' actions and that the district court analyzed the sufficiency of The Koala's complaint using an incorrect framework. The panel remanded for consideration of The Koala's free speech claim in light of the panel's forum definition.

         The panel held that the Second Amended Complaint sufficiently alleged a claim for First Amendment retaliation. The panel was unpersuaded by defendants' argument that the government's motive is irrelevant when it enacts a content-neutral rule of general applicability. First, the panel determined the Media Act discriminated based on the identity of the speaker because rather than applying to all registered student organizations, the Act applied only to media organizations and singled them out for disfavored access to student activity fee funding. Moreover, The Koala alleged that at least one other student organization continued to receive funding for its print media. Second, the panel held that it was bound by Ariz. Students' Ass'n v. Ariz. Bd. of Regents, 824 F.3d 858, 864 (9th Cir. 2016), which emphasized that motive was a necessary element of a retaliation claim and which provided a framework for analyzing such a claim. Applying that framework, the panel held that The Koala's article was clearly protected speech, the Media Act chilled The Koala's speech and The Koala adequately alleged a nexus between its speech and the alleged retaliatory conduct.

         Concurring in the result and in all but part II of the opinion, Judge Fisher would hold that the complaint, irrespective of censorial motive, adequately alleged a claim under the Free Press Clause on the theory that the defendants singled out the press for disparate treatment.

          OPINION

          CHRISTEN, CIRCUIT JUDGE

         Plaintiff-Appellant The Koala is an unincorporated registered student organization ("RSO") at the University of California, San Diego ("UCSD") that publishes a newspaper featuring art and satirical writing. In 2015, The Koala published an article satirizing the concept of "safe spaces" on campus, generating numerous complaints from students and administrators and prompting UCSD to publicly denounce the article's offensive language. Two days later, the UCSD student government passed the Media Act, which eliminated RSO funding for all print media, including The Koala. In response, The Koala brought this action for declaratory and injunctive relief, alleging that the passage of the Media Act violated its First Amendment rights. Defendants moved to dismiss.

         The district court concluded that The Koala's lawsuit was barred by the Eleventh Amendment. Alternatively, it concluded that the Media Act did not violate the Free Press Clause of the First Amendment because the Act was content neutral, viewpoint neutral, and applied uniformly to all RSOs. The district court also dismissed The Koala's Free Speech Clause claims on the merits, concluding that the media funds category of RSO funding was a limited public forum that UCSD was free to close. Finally, the district court ruled that The Koala failed to state a First Amendment retaliation claim because the court concluded that a facially neutral legislative enactment cannot be the basis for a claim of retaliation. The Koala appeals.

         We reverse the district court's order, vacate its judgment, and remand for further proceedings consistent with this opinion.

         FACTUAL BACKGROUND

         The Associated Students is the student government organization at UCSD. Students at UCSD pay compulsory student fees, and the university remits a portion to the Associated Students for reallocation to RSOs, creating a source of funding for various student activities. UCSD allows the Associated Students to distribute student activity funds, but the university mandates that the allocation be consistent with its educational policy goals. UCSD's Policy on Compulsory Campus-Based Student Fees states that "[t]he University's educational purposes are served when reallocations by [the Associated Students] . . . to support [RSOs] and [RSO]-related programs and activities are made: (1)to provide opportunities for the educational benefits and personal and social enrichment that derive from participation in extracurricular programs and activities; and (2) to stimulate on-campus discussion and debate on a wide range of issues from a variety of viewpoints."

         The Associated Students distributes a funding guide explaining how to apply for student activity funding. For the 2015-16 academic year, the funding guide stated that the Associated Students' distribution guidelines were intended to "promote the equitable allocation of student fees and sustainable growth of student organizations[.]" The funding guide also explained that RSOs could request funding from seven different categories: (1) programming funds; (2)operating funds; (3) tournament and competition funds; (4) annual event funds; (5) media funds; (6) interest-free programming loans; and (7) Associated Students grants.

         The remaining sections of the 2015-16 funding guide were dedicated to explaining those categories. Under media funds, the guide stated that the Associated Students would allocate funding on a "content-neutral basis" and that neither the Associated Students nor UCSD would be "responsible for the content of student media publications."

         According to the funding guide, RSOs like The Koala could receive up to $1, 000 per quarter for media costs, and the Associated Students' budget earmarked $25, 000 for RSOs seeking print media funding during the 2015-16 academic year.

         In November 2015, The Koala published an article entitled "UCSD Unveils New Dangerous Space on Campus." The article satirized the concepts of "trigger warnings" and "safe places" on college campuses, employing ethnic and sexist stereotypes and racial epithets.

         Following the article's publication, the Associated Students received numerous comments and complaints about its offensive language. The article also prompted students to file "Bias Incident Report Forms" with UCSD, which the administration redirected to The Koala. A different RSO suggested that the administrator who approved the newspaper's funding should resign, but a UCSD official explained that "[The] Koala gets no University funding[.] The Associated Students [funds] them. Pressure should [be] brought to that organization to end the madness." A representative of that RSO replied "this is news to me, we will get on it asap."

         In the following days, UCSD released a statement by Chancellor Khosla that "strongly denounce[d] [T]he Koala publication and the offensive and hurtful language it cho[se] to publish." The statement described The Koala as "profoundly repugnant, repulsive, attacking[, ] and cruel," notified readers that the UCSD administration did "not provide any financial support for [T]he Koala," and "call[ed] on all students, faculty, staff[, ] and community members to join [the administration] in condemning [The Koala's] publication and other hurtful acts."

         The Associated Students held a regularly scheduled meeting on the same day the Chancellor issued his statement. The Vice Chancellor of Student Affairs attended the meeting and read Chancellor Khosla's statement, and a member of the Associated Students introduced the Media Act. Consideration of the Media Act was not listed on the Associated Students' agenda prior to the day of the meeting, but after some discussion and debate, it was approved. The Media Act eliminated the media funds category from the student activity funding available to RSOs.

         The Koala lost $452.80 in campus activity fee funding when the Media Act was passed. The loss of funds prevented The Koala from publishing an issue planned for the 2015-16 winter quarter and three of the six issues planned for the remainder of the academic year. The Koala alleges that the Associated Students continues to provide financial support for at least one student-run, student-initiated newspaper, The Collective Voice.

         The Koala continues to publish issues online, but it asserts several reasons why online publication is not a suitable alternative for publishing in print: (1) The Koala attracted student artists prior to the Media Act because it was the only newspaper on campus that dedicated its cover to student artwork; (2) The Koala contends that it is now unable to offer artists the same control in digital format because end users can change the display, color, and shading; and (3) The Koala more easily reached its intended audience when it published in print because it distributed each paper issue on campus, by hand. In sum, The Koala contends that publishing online hinders its ability to reach and engage with its intended audience.

         PROCEDURAL BACKGROUND

         The Koala's initial complaint alleged that defendants are engaged in an ongoing violation of its First Amendment rights, and The Koala sought to enjoin them from "categorically refusing to provide campus activity fee funding for the publication of student print media[.]" The Koala moved for a preliminary injunction, and amended its complaint. Defendants moved to dismiss the amended complaint pursuant to Fed.R.Civ.P. 12(b)(6). The district court denied the motion for a preliminary injunction and granted defendants' motion to dismiss. In doing so, the court concluded that the Eleventh Amendment barred the amended complaint because a "request to provide/restore funding from the state" was "[a]t the heart" of The Koala's claims. It acknowledged, however, that further amendment might correct this deficiency and granted The Koala leave to amend. The court also noted that although The Koala's briefing argued a claim for retaliation under the First Amendment, the amended complaint did not actually include a retaliation claim.

         The Koala's second amended complaint ("SAC") is the operative pleading in this case. It alleges that defendants are engaged in a continuing violation of the First Amendment's Free Press Clause because the Media Act impermissibly singled out and financially burdened the The Koala. The Koala's Free Speech Clause claim alleges that defendants created a limited public forum for the speech of all RSOs when they instituted a program allowing RSOs to apply for campus activity funding. Because the Media Act expelled The Koala from this forum in response to the "Dangerous Space" article, The Koala contends that the Media Act amounted to viewpoint discrimination. Finally, the SAC includes a First Amendment retaliation claim that the "Dangerous Space" article was a substantial motivating factor in the decision to defund print media.[1]

         The Koala requested an injunction preventing defendants' continued enforcement of the Media Act, a declaratory judgment that defendants violated The Koala's First Amendment rights, and an award of attorneys' fees and costs. Notably, in place of The Koala's prior request for an order restoring activity funding, the SAC seeks only eligibility to apply for student activity funding.

         Defendants renewed their motion to dismiss, and the district court granted the motion with prejudice. The Koala timely appealed. We have jurisdiction under 28 U.S.C. § 1291, and we reverse the district court's order granting defendants' motion to dismiss and vacate the district court's judgment.

         STANDARDS OF REVIEW

         We review de novo "a dismissal on the basis of sovereign immunity or for failure to state a claim upon which relief can be granted." Ariz. Students' Ass'n v. Ariz. Bd. of Regents, 824 F.3d 858, 864 (9th Cir. 2016).

         When evaluating the sufficiency of a pleading under Fed.R.Civ.P. 12(b)(6), we review only the allegations in the complaint and any attachments or documents incorporated by reference. See United States v. Ritchie, 342 F.3d 903, 907-08 (9th Cir. 2003). We "accept the complaint's well-pleaded factual allegations as true, and construe all inferences in the plaintiff's favor[.]" Ariz. Students', 824 F.3d at 864. Ultimately, we must determine if these materials present "sufficient factual matter . . . to state a claim to relief that is plausible on ...


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