Alamo Forensic Srv v. Bexar Cty ( 2021 )

Case: 20-50449 Document: 00515903982 Page: 1 Date Filed: 06/17/2021
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
FILED
June 17, 2021
No. 20-50449 Lyle W. Cayce
Clerk
Alamo Forensic Services, L.L.C.,
Plaintiff—Appellant,
versus
Bexar County, Texas; Joe D. Gonzales,
Defendants—Appellees,
versus
Debra Stephens,
Appellant.
Appeal from the United States District Court
for the Western District of Texas
USDC No. 5:20-CV-38
Before Dennis and Engelhardt, Circuit Judges, and Hicks*, District
Judge.
*
Chief District Judge of the Western District of Louisiana, sitting by designation.
Case: 20-50449 Document: 00515903982 Page: 2 Date Filed: 06/17/2021
No. 20-50449
Per Curiam:*
Plaintiff–Appellant Alamo Forensic Services, LLC (AFS) appeals the
dismissal of its action against Defendants-Appellees Bexar County, Texas,
and Bexar County Criminal District Attorney Joe D. Gonzales for alleged
breach of implied contract and violations of First Amendment Rights
pursuant to 42 U.S.C. § 1983. The district court granted Defendants’
motion to dismiss, finding that AFS had failed to state a plausible breach of
contract claim and that AFS lacked standing to assert the constitutional
rights of an unnamed party. On appeal, AFS asserts that the district court
erred in denying its motion for leave to file an amended complaint and
granting Defendants’ motion to dismiss. We AFFIRM.
I.
Alamo Forensic Services, LLC provides breath alcohol testing and
instrument calibration services to various Texas law enforcement agencies
and governmental entities. Between September, 2012 and February, 2018,
AFS contracted with Bexar County (the “Contract”) to provide
maintenance of breath-test instruments, labor and parts for repair of those
instruments, supervision of breath-test operators for the County, expert
testimony on breath tests, clerical support, and training classes in exchange
for a monthly fee and expense reimbursements from Bexar County.
Under the terms of the Contract, either party could terminate the
agreement with thirty days written notice. On December 29, 2017, AFS was
informed in writing by the Director of Bexar County Judicial Support
Services that the County was not going to renew when the Contract’s term
expired on February 1, 2018. Bexar County subsequently contracted with
*
Pursuant to 5th Circuit Rule 47.5, the court has determined that this
opinion should not be published and is not precedent except under the limited
circumstances set forth in 5th Circuit Rule 47.5.4.
2
Case: 20-50449 Document: 00515903982 Page: 3 Date Filed: 06/17/2021
No. 20-50449
one of AFS’s competitors, Quality Forensic Toxicology, LLC (QFT) for the
same services. AFS alleges that after the Contract expired, Bexar County
continued to request services from AFS, but failed to compensate for those
services. As a result, AFS stopped providing records to the Bexar County
District Attorney.
Debra Stephens (Stephens), owner of AFS, is a Technical Supervisor
approved by the Texas Department of Public Safety (DPS) under its Breath
Alcohol Testing Program. Stephens allegedly became concerned about the
practices being used by QFT and submitted a complaint to the Office of the
Scientific Director of the Texas DPS Breath Alcohol Lab on February 2,
2019. According to AFS, DPS conducted an audit and found that QFT “was
in compliance.” Unsatisfied with the results of the DPS audit, Stephens
submitted a letter to the Texas Attorney General on June 27, 2019, and
shared her concerns with the Bexar County District Attorney’s office about
QFT’s testing on August 26, 2019. AFS claims that, in response to
Stephens’ letter, Criminal District Attorney Joe Gonzales (Gonzales) issued
a Memorandum of Disclosure that inaccurately attributed several false
statements to Stephens.
On January 13, 2020, AFS brought a claim for breach of implied
contract, a claim in the alternative for quantum meruit, and a claim pursuant
to 42 U.S.C. § 1983 alleging a violation of the First Amendment rights of
Stephens. On February 25, 2020, Appellees filed a motion to dismiss
pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil
Procedure. On March 10, 2020, AFS filed a response in opposition to the
motion, arguing the motion to dismiss should be denied because “a plaintiff
is not required to plead facts supporting each and every element of [its] claim
or legal theory,” “a plaintiff is not required to plead law or the legal elements
of its claims,” and discovery has not yet begun.
3
Case: 20-50449 Document: 00515903982 Page: 4 Date Filed: 06/17/2021
No. 20-50449
AFS also included with its response to the motion to dismiss a request
for leave to file an amended complaint. The proposed amended complaint
abandoned AFS’s implied contract and quantum meruit claims, and instead
asserted a claim for unconstitutional deprivation of property rights based on
the same facts, and sought to add Stephens as a named plaintiff. The district
court entered an order granting the Defendants’ motion to dismiss and
denying AFS’s motion seeking leave to file the amended complaint. AFS
timely appealed.
II.
We review the district court’s grant of a motion to dismiss de novo.
See Budhathoki v. Nielsen, 898 F.3d 504, 507 (5th Cir. 2018). To survive a
12(b)(6) motion, the plaintiff’s complaint must assert “enough facts to state
a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550
U.S. 544, 570 (2007). The facts asserted must allow “the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Limiting its review to the face of
the pleadings, this court accepts as true all well-pleaded facts and views them
in the light most favorable to the plaintiff. Spivey v. Robertson, 197 F.3d 772,
774 (5th Cir. 1999). Nevertheless, the plaintiff must provide more than
“conclusory allegations, unwarranted factual inferences, or legal
conclusions.” Ferrer v. Chevron Corp., 484 F.3d 776, 780 (5th Cir. 2007).
The factual bases for the plaintiff’s complaint “must be enough to raise a
right to relief above the speculative level on the assumption that all the
allegations in the complaint are true.” Twombly, 550 U.S. at 555.
Rule 8(a)(2) of the Federal Rules of Civil Procedure provides, in a
general way, the applicable standard of pleading. It requires that a complaint
contain “a short and plain statement of the claim showing that the pleader is
entitled to relief,” FED. R. CIV. P. 8(a)(2), “in order to give the defendant
4
Case: 20-50449 Document: 00515903982 Page: 5 Date Filed: 06/17/2021
No. 20-50449
fair notice of what the claim is and the grounds upon which it rests,”
Twombly, 550 U.S. at 555. Although a complaint need not contain detailed
factual allegations, the “showing” contemplated by Rule 8 requires the
plaintiff to do more than simply allege legal conclusions or recite the elements
of a cause of action. Id.III.
Defendants argue AFS failed to state a viable claim for breach of
implied contract or quantum meruit and failed to state a viable First
Amendment claim. AFS argues the motion should be denied because they
set forth additional facts that state a legally cognizable claim. 1
Breach of Implied Contract and Quantum Meruit
In response to the motion to dismiss, AFS requests leave to file an
amended complaint which removes the breach of contract and quantum
meruit claims, adds Stephens as a plaintiff in her individual capacity, and
adds a claim for unconstitutional deprivation of property rights, based on the
same facts.
Defendants assert Bexar County is entitled to governmental immunity
against breach of contract and quantum meruit claims. The Supreme Court
of Texas has provided significant guidance on issues of immunity. “A unit
of state government is immune from suit and liability unless the state
consents.” Dallas Area Rapid Transit v. Whitley, 104 S.W.3d 540, 542 (Tex.
2003) (citations omitted). Unless the party suing the governmental entity
meets its burden of establishing that governmental immunity is waived, the
1
Plaintiff’s response to Defendants’ motion to dismiss was filed concurrently with
Plaintiff’s request for leave to file an amended complaint. The court will analyze the
proposed amended complaint on the issue of futility. The discussion of the proposed
amended complaint is based on the district court’s evaluation denying the motion for leave.
5
Case: 20-50449 Document: 00515903982 Page: 6 Date Filed: 06/17/2021
No. 20-50449
trial court lacks jurisdiction to consider the claim. Rusk State Hosp. v. Black,
392 S.W.3d 88, 95 (Tex. 2012).
To establish such a waiver of governmental immunity, a plaintiff must
either point to an express legislative waiver or a constitutional provision that
allows the plaintiff to bring the claim against the governmental unit. Luttrell
v. El Paso Cty., 555 S.W.3d 812, 826 (Tex.App.—El Paso 2018, no pet.). AFS
has failed to identify any waiver of governmental immunity that would permit
those claims to proceed, and has therefore failed to plead facts showing either
that any court may exercise subject matter jurisdiction over those claims or
that they are viable. We affirm dismissal of the breach of contract and
quantum meruit claims.
Due Process Deprivation of Property
In the proposed amended complaint, AFS adds a new claim against
Bexar County: that AFS and Stephens “had property taken from them
without compensation in violation of Plaintiffs’ due process rights under the
[Fourteenth] Amendment in violation of 42 U.S.C. § 1983.” To establish
municipal liability under § 1983, a plaintiff must plead three elements: “(1)
an official policy (or custom) of which (2) a policymaker can be charged with
actual or constructive knowledge, and (3) a constitutional violation whose
‘moving force’ is that policy or custom.” Id. at 541–42 (quoting Pineda v.
City of Houston, 291 F.3d 325, 328 (5th Cir. 2002)). AFS fails to address
these elements in its original or proposed amended complaint.
To establish a § 1983 procedural due process claim, a plaintiff must
show: (1) that he or she was deprived of a property interest protected by the
Fourteenth Amendment, and (2) that the process attendant to the
deprivation was constitutionally deficient. Ky. Dep’t of Corr. v. Thompson,
490 U.S. 454, 460 (1989). A plaintiff must demonstrate a “legitimate claim
of entitlement” to that property interest. Nunez v. Simms, 341 F.3d 385, 387
6
Case: 20-50449 Document: 00515903982 Page: 7 Date Filed: 06/17/2021
No. 20-50449
(5th Cir. 2003). An implied contract may provide the source of such a
property interest. White v. Miss. State Oil and Gas Bd., 650 F.2d 540, 543
(5th Cir. Unit A 1981). AFS’s proposed amended complaint, however, fails
to show that AFS had an implied contract that would be enforceable under
Texas law. Because AFS has not adequately pled a violation of the Due
Process Clause, its § 1983 procedural due process claim fails.
First Amendment
AFS alleges that Defendants issued the Memorandum of Disclosure
after Stephens complained about QFT in an attempt to mischaracterize her
concerns and attack her personally. In their motion to dismiss, Defendants
argue this claim should be dismissed because: (1) AFS lacks standing to seek
redress based on a Memorandum of Disclosure issued regarding Stephens;
(2) the claim is barred by the Eleventh Amendment, and by both
governmental and prosecutorial immunity; (3) District Attorney Gonzales,
acting in his official capacity in issuing the Memorandum of Disclosure, is
immune from claims for damages under the Eleventh Amendment; (4)
District Attorney Gonzales, as prosecutor, is immune from a § 1983 claim for
acts that are within the scope of his prosecutorial duties; (5) the official-
capacity suit is barred by governmental immunity; and (6) the claim is more
accurately described as a defamation claim, and such claims are not
actionable under § 1983. We need only address the issue of standing.
The requirement that a claimant have standing is an “essential and
unchanging part of the case-or-controversy requirement of Article III.”
Davis v. FEC, 554 U.S. 724, 733 (2008) (quoting Lujan v. Defenders of
Wildlife, 504 U.S. 555, 560 (1992)). A plaintiff must demonstrate that he or
she has suffered an “injury in fact” that is “fairly traceable” to the
defendant’s actions and will “likely…be redressed by a favorable decision.”
Lujan, 504 U.S. 560-61. The claimant bears the burden of establishing
7
Case: 20-50449 Document: 00515903982 Page: 8 Date Filed: 06/17/2021
No. 20-50449
standing, and “each element [of the three-part standing inquiry] must be
supported in the same way as any other matter on which the plaintiff bears
the burden of proof; i.e., with the manner and degree of evidence required at
the successive stages of the litigation.” Id. at 561. To prove an injury in fact
sufficient to raise a First Amendment facial challenge, “a plaintiff must
produce evidence of an intention to engage in a course of conduct arguably
affected with a constitutional interest, but proscribed by statute.”
Zimmerman v. City of Austin, Texas, 881 F.3d 378, 388 (5th Cir. 2018)
(quoting Miss. State Democratic Party v. Barbour, 529 F.3d 538, 545
(5th Cir. 2008)).
In addition to those constitutional requirements, the Supreme Court
has also established prudential constraints, one of which requires courts to
refrain from adjudicating claims that assert the rights of third parties. Warth
v. Seldin, 422 U.S. 490, 498–99 (1975). One principle of prudential standing
requires “that a plaintiff generally must assert his own legal rights and
interests, and cannot rest his claim to relief on the legal rights or interests of
third parties.” Superior MRI Servs., Inc. v. All. Healthcare Servs., Inc., 778
F.3d 502, 504 (5th Cir. 2015) (quoting United States v. Johnson, 632 F.3d 912,
919–20 (5th Cir. 2011)).
One exception in which a litigant may assert the rights of a third party
is when, in addition to his or her own Article III standing, the litigant also has
a close relationship to the third party such that the parties’ interests are
aligned and there is some “hindrance to the third party’s ability to protect
his or her own interests.” Powers v. Ohio, 499 U.S. 400, 411 (1991). AFS
pleads nothing to support the notion that Stephens is hindered from
protecting her own interests. We find AFS lacks standing to assert the First
Amendment rights of Stephens and affirm dismissal of this claim.
8
Case: 20-50449 Document: 00515903982 Page: 9 Date Filed: 06/17/2021
No. 20-50449
Retaliation under Section 1983
In the proposed amended complaint, AFS and Stephens assert a claim
that Defendants retaliated against AFS in response to Stephens’ complaints
about QFT by failing to compensate for services provided to Bexar County
and not contracting with AFS again.
The First Amendment prohibits adverse governmental action against
an individual in retaliation for the exercise of protected speech activities.
Keenan v. Tejeda, 290 F.3d 252, 258 (5th Cir. 2002). To assert a claim for
retaliation under Section 1983, a plaintiff must show: (1) he or she was
engaged in constitutionally protected activity, (2) the defendants’ actions
caused plaintiff to suffer an injury that would chill a person of ordinary
firmness from continuing to engage in that activity, and (3) the defendants’
adverse actions were substantially motivated against the plaintiff’s exercise
of constitutionally protected conduct. Id.The retaliation claim asserted by AFS and Stephens is inconsistent
with the record. The alleged failure to compensate AFS began in 2018;
Stephens made her complaints a year later, beginning in February 2019. The
complaints made by Stephens cannot have caused the failure to pay when the
failure to pay predated the complaints. Further, to the extent Plaintiffs’
retaliation claim is based on the alleged failure to consider AFS as a future
contractor, such an allegation, without pleading more, is speculative and
hypothetical and thus does not form the basis of a justiciable case or
controversy sufficient to confer Article III standing. Lujan, 504 U.S. at 560.
Consequently, the claim for retaliation under Section 1983 fails.
IV.
AFS also asserts that the district court erred in denying leave to amend
its complaint as to the claims under the First Amendment and for an unlawful
taking under 42 U.S.C. §1983.
9
Case: 20-50449 Document: 00515903982 Page: 10 Date Filed: 06/17/2021
No. 20-50449
We review the district court’s denial of leave to amend a complaint
under Federal Rule of Civil Procedure 15 for abuse of discretion. N. Cypress
Med. Ctr. Operating Co., Ltd. v. Aetna Life Ins. Co., 898 F.3d 461, 477 (5th Cir.
2018). Although leave to amend under Rule 15(a) is to be freely given, that
generous standard is tempered by the necessary power of a district court to
manage a case. Schiller v. Physicians Res. Grp., Inc., 342 F.3d 563, 566 (5th Cir.
2003). “Denying a motion to amend is not an abuse of discretion if allowing
an amendment would be futile.” Marucci Sports, L.L.C. v. Nat’l Collegiate
Athletic Ass’n, 751 F.3d 368, 378 (5th Cir. 2014).
In deciding whether to grant leave to amend, the district court may
consider a variety of factors in exercising its discretion, including undue
delay, bad faith or dilatory motive on the part of the movant, repeated failures
to cure deficiencies by amendments previously allowed, undue prejudice to
the opposing party by virtue of allowance of the amendment, and futility of
the amendment. Schiller, 342 F.3d at 566. After analyzing the motion, the
district court determined that AFS’s proposed amended complaint was futile
as to the claims for retaliation and for an unlawful taking under 42 U.S.C.
§1983. Specifically, the court found that AFS’s proposed amended
complaint failed to show that Plaintiff had a property interest—the alleged
implied contract—that would be enforceable under state law. The district
court also found that “there is no basis by which the court could find that
Plaintiffs’ allegedly protected speech caused Bexar County to fail to
compensate Plaintiffs for their work or consider them as a potential
contractor.” The district court did not abuse its discretion in denying leave
to amend the complaint.
V.
For the foregoing reasons, the judgment of the district court is
AFFIRMED.
10