Blackburn v. City of Marshall ( 1995 )

  •                     UNITED STATES COURT OF APPEALS
                            FOR THE FIFTH CIRCUIT
                                  No. 93-5149
          Appeal from the United States District Court for the
                        Eastern District of Texas
                              (January 12, 1995)
    Before GARWOOD, JOLLY and SMITH, Circuit Judges.
    GARWOOD, Circuit Judge:
         Plaintiff-appellant Jimmy Blackburn (Blackburn) sued the City
    of Marshall, Texas (the City), Marshall Chief of Police Chuck
    Williams (Williams), and former Harrison County Sheriff Bill Oldham
    (Oldham) (collectively Defendants), asserting constitutional and
    state law claims arising from the revocation of his permission to
    use the police radio frequency in his towing and wrecker service
    business.    Blackburn appeals the district court's dismissal of his
    suit for failure to state a claim under Federal Rule of Civil
    Procedure 12(b)(6).     We affirm in part and reverse and remand in
                         Facts and Proceedings Below
         Blackburn owns and operates a towing and wrecker service in
    Harrison County, Texas.      The backdrop of this suit centers around
    the wrecker   business      in   Marshall,     Texas,   the   county   seat   of
    Harrison County.         The City provides local towing and wrecker
    operators   with   two    distinct     sources   of   business.     The   first
    category is the removal of abandoned vehicles from public property,
    for which the City awards a competitive contract to one local
    wrecker service.     The second source is the removal of cars that
    have been involved in accidents, for which the City employs a
    rotating on-call system.           Both these distinct operations are
    involved in this suit.           A third source of business for local
    wreckers,   independent     of   any    City   involvement    or   regulation,
    consists of customer requests for the assistance of a specific
         To award the contract for the removal of abandoned vehicles,
    the City solicited bids from local wreckers through the publication
    of two notices in the local newspaper as required by Texas law.
    TEX. LOCAL GOV'T CODE ANN. § 252.0411 (Vernon 1988).           Blackburn, who
    does not subscribe to the newspaper, did not see the notices and
    therefore did not participate in the bidding process.              Upset about
    missing the opportunity to bid, Blackburn, on or about January 23,
    1992, telephoned Williams to complain about this bidding procedure.
    In this conversation, Williams told Blackburn that his attitude in
    complaining about the bidding procedure was improper and that he
    would therefore be removed from the rotation list for the accident
    vehicles.   Later that day, Williams revoked Blackburn's permission
    to use the police radio frequency.             On January 24, Blackburn
    received a letter from Oldham informing him that his wrecker
    company had been removed from the Harrison County rotation list.
    In a January 26, 1992, article in the local newspaper, Williams
    repeated his earlier statement:          "I removed (Blackburn) [from the
    rotation    list]   because   of   his    attitude.   I   don't   need   him
    representing the city of Marshall."            This is the only adverse
    statement about Blackburn in the article, a copy of which is
    appended to the complaint.
         The city police, the county sheriff, and the Texas Department
    of Public Safety often require the assistance of wreckers to remove
    damaged vehicles from accident scenes.           In an effort to ensure
    equitable distribution of this official wrecker business, a group
    of local wreckers formed the Harrison County Wreckers Association
    (the Association).     The Association notifies the city police, the
    county sheriff, and the Texas Department of Public Safety which
    wrecker service is available on call to receive requests for towing
    from the police dispatcher.         It is not alleged that Defendants
    participate in the administration of the Association or play any
    role in the Association's selection of the on-call wrecker. Unless
    an accident victim requests a specific wrecker, the on-call wrecker
    tows all vehicles involved in traffic accidents.          The Association
    requires, as a prerequisite for membership, permission to use the
    official police radio frequency.             As a result of the City's
    suspension of his police radio frequency privileges, Blackburn
    could no longer be an Association member and therefore could not
    participate in the rotation system for removing accident vehicles.
         After unsuccessfully attempting to settle his dispute with
    various city officials, including Williams and the mayor, and with
    Oldham, Blackburn requested a hearing to challenge the suspension
    of his radio privileges and his concomitant removal from the
    rotation list.     Although Blackburn's pleadings are inconsistent on
    whether he received a hearing,1 his brief on appeal suggests that
    he did receive a hearing.    Blackburn also alleges that, on or about
    October 6, 1992, he was informed for the first time that his
    permission to use the police radio frequency was revoked because of
    information retrieved from the National Law Enforcement Computer
    Network   (NCIC)   indicating   that    he   had   a    1980   grand   larceny
    conviction in Virginia.         Blackburn denied this assertion and
    presented an affidavit of a Virginia court administrator stating
    that he did not have a grand larceny conviction.2
         Blackburn complains that he has suffered substantial business
    losses as a result of Defendants' actions.             In addition to losing
    the business generated by the on-call rotation system, Blackburn
    asserts that many of his customers have ceased to use his services
         In paragraph 36 of his complaint, Blackburn states both that
    he received a hearing and that he did not.
         Blackburn's complaint does not describe the circumstances
    surrounding this October 6 notice in any meaningful manner.
    Blackburn never states who informed him or how he came to learn
    of this newly discovered reason for the suspension of his radio
    privileges or whether (or, if so, how) this reason was ever
    memorialized. Nor does he allege that any defendant made or
    caused to be made any public statement concerning this Virginia
    conviction. Rather, the complaint merely states that
    "[p]laintiff was informed that the NCIC computer had revealed
    that Blackburn had been convicted of grand larceny in the State
    of Virginia in 1980."
    in the wake of the publication of the January 26 newspaper article.
    Blackburn filed this suit against Defendants, pursuant to 42 U.S.C.
    § 1983, alleging that he was denied business referrals from the
    City and County in retaliation for his speech on a matter of public
    concern in violation of the First Amendment, and that Defendants'
    actions deprived him of both a liberty and a property interest
    without due process in violation of the Fourteenth Amendment.3
    Blackburn also asserts several pendent (or supplemental) state law
    claims for defamation and tortious interference with business
         After filing an answer, the City and Williams moved to dismiss
    the complaint for failure to state a cause of action under Federal
    Rule of Civil Procedure 12(b)(6).             Oldham separately moved to
    dismiss on the same ground.            Oldham and Williams also asserted
    qualified   immunity       defenses.        The   district     court   granted
    Defendants' motions to dismiss under Rule 12(b)(6).              The district
    court held that Blackburn's First Amendment claim failed because he
    was not a public employee.             Rejecting Blackburn's due process
    claims, the district court held that the facts alleged failed to
    satisfy the stigmatization requirement and that he did not have a
    property interest in remaining on the on-call rotation list.
    Having   dismissed   all    the   federal    claims,   the   district    court
    dismissed   the   pendent     (or   supplemental)      state     law   claims.
         Although Blackburn's complaint included a Fourth Amendment
    claim, he abandoned this claim below. Blackburn also alleges
    that Defendants' actions violated the Fifth Amendment. Because
    the due process component of the Fifth Amendment applies only to
    federal actors, we will analyze Blackburn's claim under the
    Fourteenth Amendment.
    Blackburn now appeals.    We affirm the dismissal of Blackburn's due
    process claims against all three defendants, affirm the dismissal
    of all other claims against Oldham, and reverse the dismissal of
    the First Amendment claim, and the pendent (or supplemental) state
    law claims, against the City and Williams.
    I.   Standard of Review
         We review de novo a district court's dismissal for failure to
    state a claim under Rule 12(b)(6).          Leffall v. Dallas Independent
    School Dist., 
    28 F.3d 521
    , 524 (5th Cir. 1994).              We must accept
    plaintiff's factual allegations as true. Cinel v. Connick, 
    15 F.3d 1338
    , 1341 (5th Cir.), cert.denied, 
    115 S. Ct. 189
     (1994).             A Rule
    12(b)(6) dismissal will not be affirmed "unless it appears beyond
    doubt that the plaintiff can prove no set of facts in support of
    his claim which would entitle him to relief."           Conley v. Gibson, 
    78 S. Ct. 99
    , 102 (1957); see also Mitchell v. McBryde, 
    944 F.2d 229
    230 (5th Cir. 1991).       However, "[d]ismissal is proper if the
    complaint   lacks   an   allegation       regarding    a   required   element
    necessary to obtain relief."    2A Moore's Federal Practice ¶ 12.07
    [2.-5] at 12-91 (footnote omitted).         And, "conclusory allegations
    or legal conclusions masquerading as factual conclusions will not
    suffice to prevent a motion to dismiss."                Fernandez-Montes v.
    Allied Pilots Ass'n, 
    987 F.2d 278
    , 284 (5th Cir. 1993).
         In considering a defendant's claim of qualified immunity, our
    first inquiry is whether the plaintiff alleged "the violation of a
    clearly established constitutional right."            Siegert v. Gilley, 
    111 S. Ct. 1789
    , 1793 (1991).        The second inquiry is whether the
    defendant is entitled to qualified immunity.                        Id.    State officials
    are shielded from liability under qualified immunity unless they
    violate a constitutional right that was clearly established at the
    time of their conduct.         Pfannstiel v. Marion, 
    918 F.2d 1178
    , 1183
    (5th Cir. 1990).
    II.   First Amendment Claim
          Blackburn argues that Defendants' revocation of his permission
    to use the police radio frequency was in retaliation for the
    exercise of his First Amendment right to free speech.                         According to
    Blackburn's complaint, he spoke out on a matter of public concern:
    the   bidding      procedure     for     the      abandoned         vehicles     contract.
    Blackburn    alleges     that,     as    a       result,      the    City     revoked   his
    permission to use the police radio frequency, thereby rendering him
    ineligible       for   continued       membership        in    the        Association   and
    participation in its rotation list.                    The district court rejected
    Blackburn's First Amendment claim on the basis that he was not a
    public employee and thus was not entitled to protection against
    retaliation for speaking out on a matter of public concern.
          At   the    outset,   we   reject          the   district       court's    apparent
    assumption that only public employees enjoy the protections of the
    First Amendment.         The district court's reasoning is inverted.
    Every citizen enjoys the First Amendment's protections against
    governmental interference with free speech, but the First Amendment
    rights of public employees are restricted by the nature of the
    employer-employee relationship.
          It is well established that "even though a person has no
    `right' to a valuable government benefit and even though the
    government may deny him the benefit for any number of reasons,
    there are some reasons upon which the government may not rely.             It
    may not deny a benefit to a person on a basis that infringes his
    constitutionally protected interestsSQespecially, his interest in
    freedom of speech."       Perry v. Sindermann, 
    92 S. Ct. 2694
    , 2697
    (1972).     Because of the special nature of the relationship between
    an employer and its employees, the Supreme Court has recognized
    that "the State has interests as an employer in regulating the
    speech of its employees that differ significantly from those it
    possesses in connection with regulation of the speech of the
    citizenry in general."     Pickering v. Board of Education, 
    88 S. Ct. 1731
    , 1734 (1968); see also Connick v. Myers, 
    103 S. Ct. 1684
    (1983).      For this reason, the First Amendment rights accorded
    public employees are governed by the two-prong test announced in
    Pickering and Connick. Under this test, a public employee alleging
    a   First   Amendment   violation   on   the   ground   that   he   has   been
    discharged for his speech must first establish that his speech may
    be "fairly characterized as constituting speech on a matter of
    public concern." Connick, 103 S.Ct. at 1690.              The second prong
    teaches that there is a First Amendment violation only if the
    employee's interest in speaking outweighs "the interest of the
    State, as an employer, in promoting the efficiency of the public
    services it performs through its employees."            Pickering, 88 S.Ct.
    at 1734-35.
          Having concluded that Blackburn was not a public employee, the
    district court held that he was not entitled to First Amendment
    "protection against retaliatory discharge for speaking out on
    matters of public concern."            Although we agree Blackburn was not a
    public employee,       that     fact    alone   cannot    end    a   court's   First
    Amendment analysis.           Outside the somewhat expanded context of
    public employment under Pickering and Connick, a court generally
    examines a     free    speech    claim    under     the   more   First   Amendment
    friendly standard enunciated in Perry.                    88 S.Ct. at 2697.
    Accordingly, the district court erred in dismissing Blackburn's
    free speech claim on the ground that he was not a public employee.
    Because of the public concern requirement in the public employee
    line of cases, a court's determination of whether to apply the
    Pickering/Connick standard or the broader protections of Perry may
    have a determinative effect on a plaintiff's First Amendment claim.
    See, e.g., Havekost v. United States Dep't of the Navy, 
    925 F.2d 316
    , 318 (9th Cir. 1991) ("Because protected speech must address a
    matter   of   public    concern    in     the     Pickering/Connick      cases,    an
    employee may have a steeper hurdle than a Perry plaintiff.").
          Without question, a public employee discharged for speech-
    related activity triggers the Pickering/Connick analysis. The more
    problematic inquiry is whether a plaintiff such as Blackburn is a
    public employee for First Amendment purposes. Because the facts of
    this case do not involve a standard public employer-employee
    relationship, we first address whether to approach Blackburn's
    claim under Pickering and Connick or under the broader protections
    of Perry. Although the Pickering/Connick test arose in the context
    of   public   employment,       courts     have    not    strictly    cabined     its
    application.     In general, courts have invoked two reasons for
    applying the test outside of the employment context:                      that the
    relationship       involved   was    analogous   to    an    employer-employee
    relationship and that the principle underlying Connick warranted
    its application.      Applying these two justifications to the present
    case, we conclude that the record before us does not demonstrate
    that Blackburn's relationship with the City was such as to warrant
    extending    the    public    employee    standard    to    his   instant     First
    Amendment claim.
         Courts have extended the Pickering/Connick analysis to cases
    involving relationships analogous to an employment relationship.
    For example, in Smith v. Cleburne County Hosp., 
    870 F.2d 1375
    Cir.), cert. denied, 
    110 S. Ct. 142
     (1989), a doctor filed suit
    against a public hospital alleging that it terminated his staff
    privileges in retaliation for his speech in violation of the First
    Amendment.    The Eighth Circuit recognized that the doctor was not
    a salaried public employee but nonetheless applied Pickering and
    Connick, reasoning that the doctor's relationship with the state
    contained sufficient indicia of a public employment relationship.
    The Court explained:
         "While there is not a direct salaried employment
         relationship, there is an association between the
         independent contractor doctor and the Hospital that [has]
         similarities   to    that   of    an   employer-employee
         relationship.   For instance, there is an application
         process for privileges, there are required duties to be
         performed by both parties, and there are potential
         liabilities each party is responsible for jointly and
         severally for tortious conduct. As a result of these
         similarities, the application of the Pickering balance
         test and its progeny in this case is appropriate." Id.
         at 1381.
    See also Caine v. Hardy, 
    943 F.2d 1406
    , 1415-16 (5th Cir. 1991) (en
    banc),   cert.      denied,    
    112 S. Ct. 1474
        (1992)      (applying    the
    Pickering/Connick analysis to the First Amendment claim of an
    anesthesiologist who lost his clinical privileges at a public
    hospital); Davis v. West Community Hospital, 
    755 F.2d 455
    , 461 (5th
    Cir. 1985) (using Pickering/Connick test to evaluate free speech
    claim of a surgeon whose staff privileges were suspended by a
    public hospital).
           We   conclude     that   the     relationship     between      Blackburn    and
    Defendants does not rise to the level of even a quasi-employment
    relationship like that in the medical staff privileges cases.
    Accordingly,      we     hold   that    the    facts    of     this   case   are   not
    sufficiently analogous to the employment cases to warrant the
    direct and full application of Pickering and Connick.
           We now consider whether the rationale underlying Connick
    nevertheless      warrants      the    application      of   the   public    employee
    standard in this case.          In Connick, the plaintiff, upset about an
    impending transfer, circulated a questionnaire concerning office
    morale,     the   need    for   a     grievance   committee,       internal   office
    procedures regarding transfers, and various other work-related
    complaints.       103 S.Ct 1684.        After losing her job in the wake of
    distributing the questionnaire, the plaintiff filed suit, alleging
    that    the   termination       violated       her     First    Amendment     rights.
    Rejecting the First Amendment claim, the Court stated that "a
    federal court is not the appropriate forum in which to review the
    wisdom of a personnel decision taken by a public agency allegedly
    in reaction to the employee's behavior."                Id at 1690.     As the Court
    explained, "[I]t would indeed be a Pyrrhic victory for the great
    principles of free expression if the Amendment's safeguarding of a
    public    employee's    right,   as       a     citizen,       to   participate     in
    discussions    concerning   public        affairs       were   confused      with   the
    attempt to constitutionalize the employee grievance that we see
    presented here."        Id. at 1694.            Thus, the Court in Connick
    recognized that a public employer enjoys wide latitude in the
    administration of its own affairs and underscored a reluctance to
    convert every workplace grievance into a constitutional claim.
         In Havekost v. United States Dep't of the Navy, 
    925 F.2d 316
    (9th Cir. 1991), the plaintiff, a grocery bagger licensed to work
    at a military installation, alleged that the Navy terminated her
    license in retaliation for her speech.              Recognizing that Havekost
    was a licensee rather than a salaried public employee, the Ninth
    Circuit stated that Pickering and Connick "are not directly on
    point."      Id. at 318.    Nevertheless, the court held that the
    principle enunciated in Connick mandated the application of the
    public employee standard to Havekost's First Amendment claim:
    "Because Havekost's dispute, like that of the plaintiff in Connick,
    is nothing more than a workplace grievance, ruling for her would be
    inconsistent with the principle stated in Connick."                   Id. (emphasis
         In Copsey v. Swearingen, 
    36 F.3d 1336
     (5th Cir. 1994), the
    plaintiff,    Copsey,   operated      a       "blind"    vending     stand    in    the
    Louisiana state capitol under a license from a state agency.
    Copsey alleged that his First Amendment rights were violated by the
    termination of his license on account of his complaints about the
    licensing program, and asserted that the Pickering/Connick test
    should not apply because he was not a state employee.                  We responded
    to this contention by stating "[w]e cannot entirely agree with
    Copsey that the Pickering/Connick test finds no application in this
    context."    Id. at 1344.       Examining the relationship between the
    licensee and the agency,4 we concluded that "Copsey was more like
    a public employee than an ordinary citizen, and therefore . . .
    Pickering and Connick have relevance to this situation."                 Id.    In
    holding that certain portions of Copsey's speech were sufficiently
    on matters of public concern to be protected under the First
    Amendment, we stated that although these portions "might impact his
    own situation," they "would impact aspects of it that were not
    those which are analogous to the employee-employer relationship.
    Even though      we   have   held   that    the   Pickering/Connick      test   is
    relevant    to   Copsey's     claim,   we     remain    mindful   that    it    is
    indisputably clear that he was not an employee, but was only in a
    situation partly analogous thereto."              Id. at 1346.
         While we in Copsey and the Ninth Circuit in Havekost were able
    to analogize the relationship between the plaintiff and defendant
    to that of employee-employer, plainly any such analogy is vastly
         We stated that the agency rules governing the blind vendors
    under the licensing program "bear the mark of an employment-type
    relationship." Id. We went on to note that:
         "After being selected, vendors are trained by the
         state. The vendors are issued their licenses for an
         indefinite term, but may be suspended or terminated for
         noncompliance with program rules and regulations . . .
         . The actual vending space is owned by the state; the
         state furnishes vendors with such substantial equipment
         as refrigerators, microwave ovens, and cash registers.
         The vendor must maintain this equipment, but the state
         is responsible for making repairs. The vendor is
         provided with an initial inventory, title to which
         remains with the state, and he must replace the
         inventory upon his resignation." Id.
    weaker in the present case.           Moreover, Blackburn's complaint
    grounds his free speech claim on his telephone conversation with
    Williams in which he alleges he complained about the public bidding
    procedure for the abandoned vehicles contract.          In retaliation for
    this   speech   concerning   the   public    bidding    process,      Williams
    allegedly revoked Blackburn's permission to use the police radio
    frequency.      Thus   Blackburn's    speech   did     not   relate    to   the
    relationship from which he was terminated, and his speech cannot be
    equated to the workplace grievances in Connick and Havekost.
    Because    Blackburn's    relationship      with     Defendants       is    not
    sufficiently analogous to the public employment relationship, and
    because his speech is not a work-related grievance, we hold that
    under clearly established law Blackburn's First Amendment claim
    should be analyzed pursuant to Perry rather than Connick.
           Under Perry, the government        "may not deny a benefit to a
    person on a basis that infringes his constitutionally protected
    interest[] . . . in freedom of speech."        Perry, 92 S.Ct. at 2697.
    In North Mississippi Communications, Inc. v. Jones, 
    792 F.2d 1330
    (5th Cir. 1986), the North Mississippi Times published editorials
    and news stories criticizing several members of the county board of
    supervisors.    As a result, the county ceased advertising in the
    Times and threatened other advertisers with a loss of county
    business unless they withdrew their advertisements from the Times.
    The Times sued the county alleging that the withdrawal of county
    advertising and the threats to other Times advertisers constituted
    retaliation for its speech in violation of its First Amendment
    rights.    Reversing the district court's directed verdict for the
    defendants, this Court applied the Perry holding:
         "Although the Times may have had no right to receive
         certain legal advertising from the County Board of
         Supervisors, it would violate the Constitution for the
         Board to withhold public patronage, in the form of its
         advertising, from the Times in retaliation for that
         newspaper's exercise of first amendment rights . . . .
         To permit such actions would allow the government to
         produce a result which [it] could not command directly,
         that is, denying the Times business in retaliation for
         its protected speech."     Id. at 1337 (citation and
         internal quotation marks omitted).5
         Having determined that the district court erred in failing to
    adjudicate Blackburn's free speech claim under Perry, we consider
    the propriety of its dismissal of Blackburn's claim against all
    three defendants.
         As   to   Oldham,   the   complaint   does   not   allege   any   First
    Amendment violation by him, or that he did anything in retaliation
    for any speech by Blackburn.6       The district court did not err in
    dismissing as to Oldham the complaint's First Amendment claims. As
    to Williams, we hold that for purposes of a Rule 12(b)(6) motion
         In Abercrombie v. City of Catoosa, Okla., 
    896 F.2d 1228
    (10th Cir. 1990), the Tenth Circuit analyzed a First Amendment
    claim asserted by a wrecker who was removed from a rotation list
    after testifying against the city in a federal trial and
    campaigning against the mayor. Reversing the district court's
    grant of judgment notwithstanding the verdict on the plaintiff's
    First Amendment claim, the Court applied Perry and reinstated the
    jury verdict on the First Amendment claim.
         We also observe that Blackburn's detailed response to
    Oldham's motion to dismiss asserted only that Oldham violated
    Blackburn's due process rights to "his liberty and property
    interests in his business without giving him notice or the
    opportunity to be heard"; it said nothing about the First
    Amendment, free speech, or retaliation. In contrast, Blackburn's
    response to the motion to dismiss of Williams and the City
    specifically asserted that "the actions by the City and Defendant
    Williams were retaliatory actions in response to Blackburn's free
    speech on a public issue."
    the   complaint    sufficiently   alleges   that   Williams   violated
    Blackburn's First Amendment rights and that any reasonable official
    in Williams' position should have so realized.      See Copsey; North
    Mississippi.    As to the City, though the complaint is considerably
    less precise than it should be, and the question presented is a
    close one, we ultimately conclude that for Rule 12(b)(6) purposes
    it sufficiently alleged a violation, or at least ratification, by
    the City's policymakers.7
          Accordingly, we reverse the district court's dismissal of the
    First Amendment claims as to the City and Williams, but affirm as
    to Oldham.
    III. Due Process Claims
          In a section 1983 cause of action asserting a due process
    violation, a plaintiff must first identify a life, liberty, or
    property interest protected by the Fourteenth Amendment and then
    identify a state action that resulted in a deprivation of that
    interest.    San Jacinto Sav. & Loan v. Kacal, 
    928 F.2d 697
    , 700 (5th
    Cir. 1991); see also Board of Regents v. Roth, 
    92 S. Ct. 2701
    , 2705
    (1972).     Blackburn's complaint alleges that Defendants' actions
         The complaint expressly alleged City liability on the basis
    of, inter alia, ratification. See City of St. Louis v.
    108 S. Ct. 915
    , 926 (1988) ("If the authorized
    policymakers approve a subordinate's decision and the basis for
    it, their ratification would be chargeable to the municipality").
    We do not suggest that the complaint is not in this respect
    subject to proper motion under Fed. R. Civ. P. 6(e) or that if
    clarified it would not be subject to a Rule 12(b)(6) motion or a
    motion for summary judgment by the City, either as respects
    ratification or as to whether the officials in question were
    policymakers in the relevant sense. See Jett v. Dallas ISD, 
    7 F.3d 1241
     (5th Cir. 1993).
         Nor do we suggest that Williams will not be entitled to
    summary judgment.
    deprived him of protected liberty and property interests without
    due process of law.
         A.   Stigma Claim
         Blackburn alleges that Williams' statement in the newspaper
    stigmatized him and damaged his reputation in the community,
    thereby depriving him of a protected liberty interest.8          In Paul v.
    96 S. Ct. 1155
    , 1165 (1976), the Supreme Court held that the
    infliction   of   a   stigma   on   a   person's   reputation   by   a   state
    official, without more, does not infringe upon a protected liberty
    interest. As the Court in Paul stated, there is "no constitutional
    doctrine converting every defamation by a public official into a
    deprivation of liberty within the meaning of the Due Process Clause
    of the Fifth or Fourteenth Amendment."         Id. at 1161.
         We have applied the holding of Paul by requiring a section
         The complaint alleges:
              "On or about January 24, 1992, Defendant Williams
         was interviewed by the local Marshall newspaper and
         affirmed that Plaintiff Blackburn had been removed from
         the rotation list due to Blackburn's 'attitude.'
         Defendant Williams further stated in the interview that
         the City of Marshall did not want people like Blackburn
         working for the City of Marshall. See Exhibit 'A.'
              Plaintiff Blackburn's business immediately began
         suffering huge losses. Blackburn's wreckers were no
         longer called to provide services for the City of
         Marshall and after the publication of the newspaper
         article many local business which had utilized
         Blackburn's services in the past refused to do business
         with Blackburn and cited the negative comments of the
         Police Chief concerning Blackburn which had been
         printed in the local newspaper."
         The complaint also asserts that "Plaintiff was deprived of a
    liberty interest, Plaintiff's good name and reputation, without a
    chance for a name clearing hearing due to Defendant Williams'
    publication of defamatory material concerning the Plaintiff."
    1983 plaintiff to show stigma plus an infringement of some other
    interest.   Kacal, 928 F.2d at 701.      To satisfy the stigma prong of
    this test, "the plaintiff must prove that the stigma was caused by
    a false communication."      Phillips v. Vandygriff, 
    711 F.2d 1217
    1221 (5th Cir. 1983) (citing Codd v. Velger, 
    97 S. Ct. 882
    Moreover, we have found sufficient stigma only where a state actor
    has made concrete, false assertions of wrongdoing on the part of
    the plaintiff.    Kacal, 928 F.2d at 701.
           It is evident that the allegations of Blackburn's complaint
    fail to state a claim for the deprivation of a liberty interest in
    this respect. As a threshold matter, Blackburn cannot maintain his
    liberty interest claim against Oldham because his complaint does
    not allege that Oldham made (or caused to be made) any statement at
    all.     As far as the remaining defendants are concerned, the
    allegations in Blackburn's complaint concerning Williams' statement
    to the newspaper do not meet the stigma requirement.                  Because
    Blackburn   has   grounded   his   liberty     interest   claim     solely   on
    Williams' statement to the newspaper, it must fail.          In Connelly v.
    Comptroller of the Currency, 
    876 F.2d 1209
    , 1215 (5th Cir. 1989),
    the plaintiff based his reputational due process claim on the
    defendant's   statement   that,    "We   are   of   the   opinion    that    Mr.
    Connelly does not possess the qualifications for the position . .
    . ." Rejecting this claim under the stigma-plus-infringement test,
    we held that "[t]he opinion of the [defendant] contains no false
    factual representations, concrete or otherwise."           Id.    In Wells v.
    Hico ISD, 
    736 F.2d 243
     (5th Cir. 1984), cert. denied, 
    106 S. Ct. 11
    (1985), we observed that "[t]he charges must be false" and that
    "for a charge to be stigmatizing it must be worse than merely
    adverse; it must be such as would give rise to 'a "badge of
    infamy,"    public    scorn,   or   the     like.'"       Id.   at   256   &   n.16.
    Williams' statement voicing his opinion about Blackburn's attitude
    does not constitute a false factual representation.                        Indeed,
    Blackburn has made no allegation that Williams' statement is false,
    a prerequisite for a liberty interest-stigma claim.                  See Codd, 97
    S.Ct. at 884; Connelly.        Further, the statement does not accuse
    Blackburn of any wrongdoing. It simply is not stigmatizing. Wells
    at 256 & n.16.9      Accordingly, we hold that Blackburn has failed to
    meet the stigma requirement of the stigma-plus-infringement test,
    and therefore the district court properly dismissed his liberty
    interest-stigma claim.10
         B.     Right to Engage in a Calling Claim
         Blackburn also argues that he had a property interest in
    remaining    on   the   on-call     list,    and   that    Defendants'     actions
         We are unpersuaded that Williams's statement concerning
    Blackburn's attitude rises to the level of public accusations of
    lying on a job application, see White v. Thomas, 
    660 F.2d 680
    (5th Cir. 1981), cert. denied, 
    102 S. Ct. 1731
     (1982), or
    falsifying travel vouchers, see Robinson v. Wichita Falls & North
    Texas Community Action Corp., 
    507 F.2d 245
    , 252 (5th Cir. 1975).
         Although Blackburn's complaint alleges that the October 6
    statement concerning the Virginia felony conviction was false, he
    never states which, if any, defendant made the statement.
    Moreover, he never alleges that this statement was made public or
    that any defendant made it public. A prerequisite to raising a
    liberty interest claim based on stigma is that the statement be
    made public by the defendant. Arrington v. County of Dallas, 
    970 F.2d 1441
    , 1447 & n.4 (5th Cir. 1992); Huffstutler v. Bergland,
    607 F.2d 1090
    , 1092 (5th Cir. 1979). See also, e.g., Bishop v.
    96 S. Ct. 2074
    , 2079 (1976). Accordingly, this alleged
    statement cannot form the basis for Blackburn's liberty interest
    deprived him of this interest without due process.11   In order for
    a person to have a property interest within the ambit of the
    Fourteenth Amendment, he "must have more than an abstract need or
    desire for it.   He must have more than a unilateral expectation of
    it.    He must, instead, have a legitimate claim of entitlement to
    it."    Board of Regents v. Roth, 
    92 S. Ct. 2701
    , 2709 (1972).
    Property interests are not created by the Constitution; rather,
    they stem from independent sources such as state statutes, local
    ordinances, existing rules, contractual provisions, or mutually
    explicit understandings.   Perry, 92 S.Ct. at 2699-2700.   However,
    it is clear that "the sufficiency of the claim of entitlement must
    be decided by reference to state law."    Bishop v. Wood, 
    96 S. Ct. 2074
    , 2077 (1976) (footnote omitted).   See also Logan v. Zimmerman
    Brush Co., 
    102 S. Ct. 1148
    , 1155 (1982) ("The hallmark of property
    . . . is an individual entitlement grounded in state law, which
    cannot be removed except 'for cause'"); Wells at 252 (same);
    Henderson v. Sotelo, 
    761 F.2d 1093
    , 1096 (5th Cir. 1985); Williams
    v. Texas Tech Univ. Health Sciences Ctr., 
    6 F.3d 290
    , 293 (5th Cir.
    1993), cert. denied, 
    114 S. Ct. 1301
         The complaint alleges "Plaintiff was deprived of property
    which was a source of income and revenue to him, namely the
    ability to tow and store cars for the City of Marshall and
    Harrison County and to utilize the radio network without notice,
    without a chance for appeal."
         We do not suggest that federal lawSQsuch as a federal
    statute or the likeSQcould not create a property interest. Cf.
    Mathews v. Eldridge, 
    96 S. Ct. 893
     (1976). The point is simply
    that the Constitution itself does not create such interests.
    Some other applicable substantive law must establish the claim of
    entitlement and prevent its removal except for substantive cause.
    No federal statute or regulation or the like is claimed to grant
    a relevant entitlement here.
         Blackburn cites, and we have found, no decision of any Texas
    court indicating that he had any entitlement to be or remain on the
    on-call rotation list.   Nor does he cite, and we have not found,
    any Texas statute or administrative regulation, or any ordinance of
    the City or Harrison County, which might be construed to provide
    such an entitlement.
         Several courts have addressed the issue of whether a wrecker
    has a protected interest in remaining on an on-call rotation list.
    Because the teachings of the Supreme Court direct us to determine
    the existence of a protected property interest based on state law,
    local ordinances, contracts, and mutually explicit understandings,
    we cannot distill a specific rule from these wrecker cases to
    govern all cases involving a person's removal from a rotation list.
    Instead, we must examine the facts of the case before us and
    determine   whether    Blackburn     has   asserted     a   legitimate,
    constitutionally protected claim of entitlement to remain on the
    rotation list, or whether he has merely alleged a unilateral
    expectation of receiving government referrals.        Nevertheless, the
    wrecker cases, as well as other cases addressing property interest
    claims, guide our analysis.
         Blackburn relies on Cowan v. Corley, 
    814 F.2d 223
     (5th Cir.
    1987), to support his argument that he has a protected interest in
    remaining on the on-call list.     In Cowan, the plaintiff operated a
    wrecker service in Montgomery County, Texas.      The county sheriff
    formed the Montgomery County Wrecker Association and issued a
    detailed list of requirements for participation. After joining the
    association and paying the initiation fees and requisite dues,
    Cowan lodged a complaint with the sheriff alleging preferential
    treatment in the assignment process.     Cowan alleged that as a
    result of his complaint he was expelled from the association
    without warning.    He sued the sheriff and others, asserting a
    section 1983 due process claim contending that the defendants'
    actions deprived him of the opportunity to engage in his calling.
    The district court dismissed Cowan's section 1983 claim under Rule
    12(b)(6).   On appeal, this Court reversed, finding that Cowan had
    sufficiently asserted a protected liberty or property interest in
    pursuing his livelihood to preclude Rule 12(b)(6) dismissal.   Id.
    at 228.13
         Despite Blackburn's argument that the facts of Cowan and the
    instant case are analogous, we find Cowan distinguishable.   First,
         There we noted that the district court had observed:
         "that Cowan had not asserted a liberty interest
         violation. Although the pleadings claim a property
         interest violation, the factual allegations upon which
         the categorization is based directly relate to both
         property and liberty interests. The essence of Cowan's
         complaint is that he has been denied the opportunity to
         pursue his livelihood. That is a constitutionally
         protected interest." Id. at 227.
    Cowan then cited and quoted at length from Phillips v.
    711 F.2d 1217
    , 1222 (5th Cir. 1983), which we
    consider in detail in the text, infra. Cowan then concludes by
              "As our holding in Phillips makes clear, the right
         to engage in the occupation of one's preference is not
         absolute. Within the strictures of due process both
         property and liberty interests may be constrained.
         Ultimately, that may prove to be the situation in the
         matter now before us. On that we express no opinion.
         But dismissal at this stage on the basis of Fed. R.
         Civ. P. 12(b)(6) was error." Id. at 228 (footnote
    the sheriff in Cowan organized and ran the county association.                 In
    the present case, there is no allegation that the sheriff, the
    City,    or    Williams    played     such   a   substantial     role   in    the
    administration of the association.           Second, under the requirements
    issued by the sheriff in Cowan, as we construed them, "only members
    of the . . . association would be permitted to tow vehicles from
    public property," and, in addition, "[a]ll wrecker assignments,
    including those made on an owner-preference basis were routed
    through the sheriff's office and the association's dispatcher."
    Id. at 225 (emphasis added).          By contrast, there is no allegation
    in the present case that all business had to be routed through the
    sheriff and the association.            Nothing prevented Blackburn from
    responding to specific customer calls for assistance to remove
    wrecked vehicles from county or city streets.                  Cowan, however,
    could not under any circumstances tow any vehicles from public
    property unless he was a member of the sheriff's association.
    Thus, while the association formed and managed by the sheriff in
    Cowan established a comprehensive framework for managing virtually
    every aspect of the wrecker industry in Montgomery County, it is
    not alleged that the Harrison County Wreckers Association is run by
    the sheriff or any other government official or that its agenda
    goes beyond merely assuring the equitable distribution of official
    wrecker business among local operators.           Blackburn does not allege
    that    the   revocation   of   his    police    radio   privileges     and   his
    ineligibility for continued Association membership prevent him from
    engaging      in   nongovernment-generated       business.       Blackburn     is
    essentially claiming a right to government referrals; Cowan, as we
    construed     it,   asserted     a   right      to   do   business    with   private
          Because the rule in Cowan does not decide this case, we turn
    for guidance to the wrecker decisions of other courts.                       Several
    general principles emerge from our review of these cases.                    Where a
    court has found a property interest in remaining on a rotation
    list, the plaintiff has alleged a claim of entitlement supported or
    created by a formal and settled source such as a state statute or
    regulatory scheme.        Absent such an entitlement grounded in state
    law, courts      have    not   found   a    protected      property    interest   in
    remaining on a wrecker rotation list.
          For example, the court in Abercrombie v. City of Catoosa,
    896 F.2d 1228
     (10th Cir. 1990), held that the plaintiff had
    a   protected    property      interest     in   continued    wrecker    referrals
    pursuant to the Oklahoma wrecker statute. Under Oklahoma law, each
    police officer was required to maintain a list of licensed wreckers
    located in the officer's district.                   The court found that the
    provisions of the Oklahoma wrecker statute requiring the city "to
    make wrecker referrals on an equal basis as nearly as possible . .
    .   created     a property interest in wrecker referrals in favor of
    the plaintiff."         Id. at 1232.       Because Blackburn does not allege
    that his asserted property interest derives from a Texas statute or
    regulation, the holding in Abercrombie does not apply to the
    instant case.
          In Pritchett v. Alford, 
    973 F.2d 307
     (4th Cir. 1992), the
    South Carolina Department of Highways and Public Transportation
    promulgated     extensive      regulations       governing    the    operations   of
    wrecking businesses within the state.          Under these regulations,
    every highway patrol district was required to set up wrecker zones
    and   maintain   wrecker   rotation    lists   for     each    zone.    These
    regulations also mandated that the rotation lists be administered
    in an even-handed manner to ensure equal distribution of the
    wrecker business.     After being removed from the rotation list,
    plaintiff filed a section 1983 action alleging a deprivation
    without due process of his property interest in being on the
    rotation list.    The Court in Pritchett held that South Carolina's
    regulatory regime created a protected property interest in being on
    the on-call list rather than a mere unilateral expectation of
    receiving government business.        Id. at 317.      Because the Court in
    Pritchett based its holding on the existence of a state regulatory
    scheme,   Blackburn   cannot   rely    on   that    case   for   the   general
    proposition that a wrecker service has a constitutionally protected
    right not to be summarily removed from a rotation list.
          Durham v. Jones, 
    698 F.2d 1179
     (11th Cir. 1983), was a section
    1983 action challenging the county sheriff's refusal to place the
    plaintiff on the wrecker rotation list.            For his convenience, the
    sheriff maintained a list of wrecker services that he used on a
    rotating basis. Under this informal arrangement, the sheriff never
    issued any written rules or regulations, nor did he institute a
    structured application process.        The court in Durham held that the
    plaintiff did not have a property or liberty interest in remaining
    on the sheriff's informal on-call list; instead, the court stated
    that the plaintiff merely had "a unilateral expectation" to receive
    business referrals from the sheriff's department.             Id. at 1181. In
    reaching this conclusion, the court stressed that the sheriff's
    action did not affect the plaintiff's "right to operate a towing
    service."   Id.14   Likewise, Defendants' actions have not foreclosed
    Blackburn's right to operate a towing service in Harrison County or
    his ability to perform services for a nongovernment clientele.
         In Piecknick v. Commonwealth of Pennsylvania, 
    36 F.3d 1250
    Cir. 1994), plaintiffs brought a section 1983 suit alleging a
    deprivation of their due process rights based on the defendants'
    preferential administration of a wrecker rotation list. Guidelines
    established by the Pennsylvania State Police required an officer in
    need of a wrecker to call the nearest available wrecker on a
    rotational basis.      The court found that the police guidelines
    merely   articulated    a   general   policy   and   did   not   create   "an
    enforceable contract between the towing services on the list and
    the State Police."     Id. at 1256.    Having found no contractual basis
    for a property interest, the court went on to analyze whether the
         In Gregg v. Lawson, 
    732 F. Supp. 849
     (E.D. Tenn. 1989), the
    Court distinguished Durham and found that the plaintiff had a
    protected property interest in remaining on the on-call list. In
    Gregg, the Tennessee Department of Public Safety issued a general
    order to supplement its existing regulations governing the
    provision of wrecker services within the state. The plaintiff
    argued that the retroactive application of this general order
    deprived him of his protected property interest in remaining on
    the on-call list. The court held that the plaintiff had a
    protected property interest in remaining on the on-call list
    because "the regulations in effect prior to the revised general
    order clearly create an expectation that a provider will be
    called on a regular rotating basis." Id. at 853 (emphasis
         Again, the court's finding that the plaintiff had a
    protected property interest in remaining on the on-call list was
    explicitly premised on the existence of the state regulatory
    scheme. Thus, the holding of Gregg does not apply to the facts
    of the instant case.
    parties' mutual understanding based on past practices gave rise to
    a property interest.         See Perry, 92 S.Ct. at 2699-2700.            After
    discussing other wrecker decisions such as Pritchett, Abercrombie,
    and Gregg, the court stated: "These cases are distinguishable. In
    all of them, a state statute or regulation gave a towing operator
    a property interest.         Here there is no Pennsylvania statute or
    regulation governing towing or wrecker services."               Piecknick at
    1257 (footnote omitted). Similarly, Blackburn has not alleged that
    his interest in remaining on the rotation list arises from a Texas
    statute or regulation.          Piecknick likewise rejected any liberty
    claim.     Id. at 1259-62.
          White Plains Towing Corp. v. Patterson, 
    991 F.2d 1049
    Cir.), cert. denied, 
    114 S. Ct. 185
     (1993), presented a situation
    where the state police divided a section of highway into zones and
    assigned each zone to one wrecker service that would have an
    exclusive right to referrals within the zone.              Under this system,
    the state police dispatcher always called the wrecker assigned to
    the zone absent a motorist's request for a specific wrecker.                  The
    plaintiffs' section 1983 action asserted a due process claim based
    on   the    state   police's    termination   of   their    exclusive    towing
    assignment in an assigned zone.            Emphasizing that this informal
    police assignment system was not authorized or governed by any New
    York statute or regulation, the court held that "regardless of
    their      unilateral   hopes    or   expectations,    plaintiffs       had   no
    cognizable property interest in continued towing referrals . . .
    and the mere termination of their status thus did not deprive them
    of a due-process-protected interest."     Id. at 1062.15
            In O'Hare Truck Serv., Inc. v. City of Northlake, 
    843 F. Supp. 1231
     (N.D. Ill. 1994), the plaintiff claimed a property interest in
    remaining on the city's rotation list.        Surveying the wrecker
    opinions, the court found that decisions recognizing a property
    interest in remaining on a rotation list all "dealt with formalized
    official sources of property rightsSQcreated by the relevant state
    law, as Roth teaches must be the case."       Id. at 1233 (citation
    omitted).     Dismissing the due process claim, the court held that
    the plaintiff had not alleged a protected property interest because
    of the absence of any official or formal source based in state law.
            In order to prevail on his property interest claim, Blackburn
    must show that his interest in remaining on the rotation list is
    more than a unilateral expectation of continued use of the police
         The court also based its holding on the fact that New York
    law presumes that a contract for services with no durational
    provision is terminable at will. "An interest that state law
    permits to be terminated at the whim of another person is not a
    property right that is protected by the Due Process Clause."
    Patterson, 991 F.2d at 1062.
         Blackburn also relies on an unpublished district court
    opinion, Morris v. McCallie, No. Civ. 4-91-032, 
    1993 WL 625544
    (E.D. Tenn. May 6, 1993). In Morris, the district court held
    that the plaintiff had a property interest in remaining on the
    wrecker rotation list. Despite the absence of any written
    regulations or state regulatory scheme, the court found that a
    mutually explicit understanding between the sheriff and members
    of the list was sufficient to create a property interest. In
    reaching this conclusion, the court stressed that the sheriff's
    office had administered the rotation list for twenty-five years
    and that the plaintiff himself had been on the rotation list for
    some twelve years. In O'Hare Truck Services, the court rejected
    the holding of Morris as inconsistent with the other wrecker
    cases. 843 F.Supp. at 1233. We agree. We likewise reject
    Blackburn's argument based on Morris.
    radio frequency and receipt of government referrals.             Because
    Blackburn does not allege that his property interest in remaining
    on the rotation list stems from a state statute or regulatory
    scheme, a contract, or any other independent source, we find that
    Blackburn has failed to allege a property interest protected by the
    Due Process Clause of the Fourteenth Amendment.
         Blackburn argues that Phillips v. Vandygriff, 
    711 F.2d 1217
    (5th Cir. 1983), and San Jacinto Sav. & Loan v. Kacal, 
    928 F.2d 697
    (5th Cir. 1991), support his argument. Despite Blackburn's efforts
    to portray the facts of this case as analogous to Kacal and
    Phillips, we find those two cases distinguishable.
         Both Phillips and Kacal involve egregious government conduct
    in interfering with the plaintiff's pursuit of a private career or
    business; they did not involve persons asserting a liberty interest
    in a particular type of governmental referral to which they were
    not otherwise entitled under state or federal law.         In Phillips,
    the plaintiff, seeking a management position in the savings and
    loan industry, entered an agreement to become an executive of
    Sinton Savings and Loan Association (Sinton).         During this time,
    plaintiff Phillips and several Sinton principals met with defendant
    Vandygriff,   the   Commissioner   of   the   Texas   Savings   and   Loan
    Department.   Phillips never actually started working at Sinton
    because of what ultimately turned out to be severe irregularities
    by others at Sinton, including the misuse of funds, which led to
    the indictment of two Sinton principals.        Phillips continued his
    quest for other employment in the industry.      According to industry
    custom, employers would screen prospective managerial employees
    with Vandygriff.        Although Vandygriff had no reason to suspect
    Phillips of any wrongdoing, he informed prospective employers of
    Phillips's connection with Sinton and told them that he could not
    recommend him for employment, as a result of which Phillips was
    unable to find employment anywhere in the industry.
           The court in Phillips held there was sufficient evidence that
    the defendants had established a de facto state licensing system
    under which Phillips was deprived of his constitutionally protected
    interest in pursuing his occupation.          Id. at 1222.      Essentially,
    defendant Vandygriff's de facto licensing program amounted to
    governmental interference that prevented Phillips from private
    employment anywhere in the savings and loan industry.             See, e.g.,
    Greene v. McElroy, 
    79 S. Ct. 1400
    , 1411 (1959) ("[T]he right to hold
    specific private employment and to follow a chosen profession free
    from   unreasonable     governmental     interference   comes    within    the
    `liberty' and `property' concepts of the Fifth Amendment . . . .");
    Truax v. Raich, 
    36 S. Ct. 7
    , 10 (1915) ("the right to work for a
    living in the common occupations of the community is of the very
    essence of the personal freedom and opportunity that it was the
    purpose of the [Fourteenth] Amendment to secure").              This type of
    direct governmental interference with private employers who might
    want    to   develop    a   business    relationship    with    Phillips   is
    distinguishable from Defendants' revocation of Blackburn's police
    radio frequency privileges and his resulting removal from the
    rotation list.         Defendants' conduct affected only Blackburn's
    ability to receive government referrals.
           Blackburn also relies on Kacal to bolster his argument that he
    had a property interest in remaining on the on-call list.                                      In
    Kacal, the plaintiff filed a section 1983 suit alleging that police
    harassment       of   her     private       customers         deprived         her        of    a
    constitutionally       protected      interest          in    operating        a     private
    928 F.2d 697
    .       Reversing the district court's grant of
    summary judgment in favor of defendants, this Court held that
    plaintiff's allegations that police harassment caused the failure
    of her arcade asserted the deprivation of a protected interest,
    thus precluding summary judgment.                 Id. at 704.            Like Phillips,
    Kacal   involved      direct    governmental           interference       with       private
    persons contemplating a business relationship with the plaintiff.
    By contrast, the protected interest Blackburn asserts is only his
    unilateral expectation to use the local police radio frequency and
    receive local government referrals.
          Because     there     apparently      is    no    Texas       or   local     statute,
    ordinance, or regulatory scheme governing the wrecker list operated
    by   the   Harrison     County      Wrecker's      Association,           we    hold       that
    Blackburn has failed to allege a property interest in remaining on
    the wrecker rotation list.                Blackburn's argument is couched in
    terms of governmental interference with his property interest in
    pursuing    an    occupation,       but    upon    closer          examination,       he       is
    essentially claiming a right to receive a certain class of business
    referrals    from     the   local    government.             Cf.    Piecknick        at    1259
    ("[Plaintiff] has no rights as an employee of the state because he
    is a mere supplier of services.").               We have consistently held that
    the mere existence of a governmental program or authority empowered
    to grant a particular type of benefit to one such as the plaintiff
    does not give the plaintiff a property right, protected by the due
    process clause, to receive the benefit, absent some legitimate
    claim of entitlementSQarising from statute, regulation, contract,
    or the likeSQto the benefit.     See, e.g., Wilson v. US Dept. of
    991 F.2d 1211
    , 1216 (5th Cir. 1993); Coghlan v.
    845 F.2d 566
    , 569-70 (5th Cir. 1988); Mahone v. Addicks
    Utility District, 
    836 F.2d 921
    , 929-931 (5th Cir. 1988).       This is
    true for a continuation of a benefit. See Coghlan (water service);
    Wells (employment).   The result, obviously, is not to be changed
    merely by employing the label "liberty" instead of "property."
    Were that not so, the "legitimate claim of entitlement" requirement
    would be entirely meaningless.   "The questions . . . are when and
    how a person acquires an 'interest in specific benefits' which will
    trigger the due process clause."      Mahone at 929.     Moreover, the
    long tradition in our nation has been that, where not affirmatively
    restricted   by   reasonable   laws   or   regulations    of   general
    application, private individuals normally have the right to engage
    in private employment or any of the common occupations of life with
    or for those private persons who see fit to engage, patronize, or
    do business with them; this tradition, however, does not embrace
    any assumption of a right to particular government business or
    referrals.   Blackburn has not alleged that any governmental action
    prevents or restricts him from doing business with those private
    citizens who wish to avail themselves of his services.
         We hold that the facts alleged here do not give rise to any
    liberty or property interest protected by the Fourteenth Amendment.
    Durham.   Accordingly, the district court did not err in dismissing
    Blackburn's due process claim against all three defendants under
    Fed. R. Civ. P. 12(b)(6).
    IV.   Pendent (or Supplemental) State Law Claims
          The district court dismissed Blackburn's pendent state law
    claims, explaining that the "general rule is to dismiss state
    claims when the federal claims to which they are pendent are
    dismissed."   Parker & Parsley Petroleum Co. v. Dresser Indus., 
    972 F.2d 580
    , 585 (5th Cir. 1992).    Because we reverse the district
    court's dismissal of Blackburn's First Amendment claim against
    Williams and the City, we must also reverse and remand the district
    court's dismissal of the pendent (or supplemental) state law claims
    against Williams and the City.
          For the foregoing reasons, the judgment of the district court
    is AFFIRMED in part and REVERSED in part, and the cause is