Retired Public Employees of NM v. Propst ( 2021 )

FILED
United States Court of Appeals
UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT April 6, 2021
_________________________________
Christopher M. Wolpert
Clerk of Court
THE RETIRED PUBLIC EMPLOYEES
OF NEW MEXICO, INC.,
Plaintiff - Appellant,
v. No. 20-2063
(D.C. No. 1:19-CV-00891-WJ-KK)
WAYNE PROPST; SUSAN PITTARD, (D. N.M.)
Defendants - Appellees,
and
THE PUBLIC EMPLOYEES
RETIREMENT ASSOCIATION OF
NEW MEXICO BOARD,
Defendant.
_________________________________
ORDER AND JUDGMENT *
_________________________________
Before BACHARACH, PHILLIPS, and CARSON, Circuit Judges.
_________________________________
Plaintiff, Retired Public Employees of New Mexico, Inc. (RPENM), appeals
the grant of summary judgment in favor of Defendants Wayne Propst and Susan
*
After examining the briefs and appellate record, this panel has determined
unanimously to honor the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
submitted without oral argument. This order and judgment is not binding precedent,
except under the doctrines of law of the case, res judicata, and collateral estoppel. It
may be cited, however, for its persuasive value consistent with Fed. R. App. P. 32.1
and 10th Cir. R. 32.1.
Pittard, the Executive Director and Chief of Staff/General Counsel, respectively, of
New Mexico’s Public Employees Retirement Association (PERA). Exercising
jurisdiction under 28 U.S.C. § 1291, we affirm.
BACKGROUND
RPENM is a non-profit association whose members include former
New Mexico public employees entitled to PERA retirement benefits. RPENM sued
the PERA Board, Propst, and Pittard, alleging they improperly increased the
compensation of certain PERA employees and reclassified certain employees,
diminishing available funds to PERA beneficiaries. RPENM pled six claims for
relief, three under federal law and three under state law. The federal law claims,
brought under 42 U.S.C. § 1983, asserted Defendants violated RPENM’s members’
rights to procedural and substantive due process under the Fourteenth Amendment
and constituted an uncompensated taking under the Fifth Amendment.
The PERA Board moved to dismiss, arguing Eleventh Amendment immunity
barred RPENM’s claims. The district court agreed and granted the motion,
dismissing the federal claims based on Eleventh Amendment immunity and declining
to exercise supplemental jurisdiction over the remaining state-law claims.
Subsequently, Propst and Pittard moved for summary judgment, arguing,
inter alia, that RPENM lacked standing and they were entitled to qualified immunity.
After briefing on the summary judgment motion, the district court granted summary
judgment on a different ground than those argued by Propst and Pittard. The district
court concluded RPENM’s claims against Propst and Pittard were, in substance,
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brought against them in their official capacities. The federal claims were therefore
subject to dismissal based on Eleventh Amendment immunity and because state
officials acting in their official capacities are not liable under § 1983. 1 The district
court declined to exercise supplemental jurisdiction over the remaining state-law
claims against Propst and Pittard. RPENM appeals.
DISCUSSION
1. Standard of Review
We review the district court’s grant of summary judgment de novo. See Lance
v. Morris, 985 F.3d 787, 793 (10th Cir. 2021). “Summary judgment is required when
the movant shows that there is no genuine dispute as to any material fact and that the
movant is entitled to judgment as a matter of law.” Id. (internal quotation marks
omitted).
2. Sua sponte dismissal
We first address RPENM’s argument that the district court erred by granting
summary judgment on a basis other than those urged in Propst and Pittard’s motion—
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The district court’s conclusion that the claims against Propst and Pittard were
official-capacity claims compelled dismissal based on its previous order that the
PERA Board was an arm of the state and thus protected by Eleventh Amendment
Immunity. “[A]n official-capacity suit is, in all respects other than name, to be
treated as a suit against the entity.” Kentucky v. Graham, 473 U.S. 159, 166 (1985).
Plaintiff does not appeal the court’s order granting the PERA Board’s motion to
dismiss, its concomitant conclusion that the PERA Board is immune from suit under
the Eleventh Amendment, or its decision not to exercise supplemental jurisdiction
over the state law claims. Any arguments related to those claims are therefore
deemed waived, and we do not consider them. See Folks v. State Farm Mut. Auto.
Ins. Co., 784 F.3d 730, 737 (10th Cir. 2015).
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a basis raised by the court sua sponte. Although we “generally don’t favor” such
grants of summary judgment, they are permissible “if the losing party was on notice
that [it] had to come forward with all of [its] evidence. And even if such notice is
lacking, we will still affirm a grant of summary judgment if the losing party suffered
no prejudice from the lack of notice.” Johnson v. Weld Cnty., 594 F.3d 1202, 1214
(10th Cir. 2010) (alteration, citation, and internal quotation marks omitted).
RPENM argues it did not receive sufficient notice and opportunity to respond
to the grounds upon which the district court entered summary judgment. Even
assuming insufficient notice, however, we conclude RPENM suffered no prejudice.
The district court’s summary judgment decision rested on a purely legal basis: its
conclusion that the claims against Propst and Pittard were addressed to their official
capacities and therefore failed as a matter of law. This conclusion would not have
changed even if RPENM submitted additional evidentiary material. We therefore
decline to reverse the district court’s order solely because it ruled sua sponte.
3. Construction of RPENM’s claims
We next address RPENM’s argument that the district court erred in construing
its claims against Propst and Pittard as official-capacity claims. RPENM argues the
district court erred in so characterizing its claims because (a) the complaint caption
expressly listed Propst and Pittard in their individual capacities; (b) the Eleventh
Amendment does not apply to individual-capacity claims; (c) damages against Propst
and Pittard would not come from the state treasury; and (d) the course of proceedings
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showed RPENM intended to sue Propst and Pittard in their individual capacities. We
reject each of these arguments in turn.
As to RPENM’s argument that its caption specified it was suing Propst and
Pittard in their individual capacities, “[i]n discerning whether a lawsuit is against a
defendant personally or in his official capacity, the caption may be informative but
clearly is not dispositive.” Pride v. Does, 997 F.2d 712, 715 (10th Cir. 1993).
RPENM argues Pride applies only where there is ambiguity regarding the capacity in
which the plaintiff is suing a government official and that there is no such ambiguity
here. But the substance of RPENM’s allegations against Propst and Pittard
unambiguously concern actions they took (or failed to take) in their official
capacities. RPENM alleged Propst “unilaterally . . . approved and allocated raises in
compensation to himself and exempt employees” and that Pittard “counseled,
promoted, and supported” the challenged unauthorized salary and benefit increases.
Aplt. App. at 13. These allegations necessarily concern actions Propst and Pittard
took as Executive Director and General Counsel/Chief of Staff of PERA. The district
court therefore did not err in looking past the complaint caption when it characterized
the claims against Propst and Pittard as official-capacity claims.
While RPENM correctly notes Eleventh Amendment immunity does not
extend to state officials sued in their individual capacity, its further conclusion—that
the district court “engaged in supporting the very theory of immunity rejected by the
Supreme Court [by] immunizing public officials like Propst and Pittard for the simple
reason that their unlawful acts and failures to act occurred while they held a public
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office,” Aplt. Br. at 16, lacks record support. The district court characterized the
claims against Propst and Pittard as official-capacity claims not simply because they
occurred while Propst and Pittard held a public office, but because they concerned
actions Propst and Pittard took (or failed to take) as public officials.
Moreover, RPENM sought as damages “the statutory remedy of the return to
the PERA beneficiaries the value of lost retirement benefits or a greater value in
relation to the unlawful salary and benefit raises accrued over the past five (5) years.”
Aplt. App. at 23. Retirement benefits for New Mexico public employees come from
a trust fund established in the New Mexico Constitution. See N.M. Const. Art. XX,
§ 22 (A). The relief RPENM sought therefore necessarily would have come from the
New Mexico treasury, even if RPENM nominally directed its claims at state officials.
The Eleventh Amendment bars such claims. See Edelman v. Jordan, 415 U.S. 651,
663 (1974) (“[A] suit by private parties seeking to impose a liability which must be
paid from public funds in the state treasury is barred by the Eleventh Amendment.”).
RPENM argues the district court erred in concluding it was suing Propst and
Pittard in their official capacities because the damages it sought—lost retirement
benefits—“would ultimately come from the State of New Mexico.” Aplt. App.
at 113. RPENM also argues the district court’s reasoning was contrary to Hafer v.
Melo, 502 U.S. 21, 30 (1991), in which the Supreme Court held the Eleventh
Amendment does not bar suits against state officials in their individual capacities.
But while RPENM’s reading of Hafer is unproblematic, its reading of the district
court’s order is incorrect. The district court did not conclude the Eleventh
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Amendment protected Propst and Pittard even though RPENM sued them in their
individual capacities. It concluded RPENM’s claims against Propst and Pittard,
which alleged official misconduct and sought damages that would necessarily come
from the New Mexico state treasury, were really official-capacity claims that were
therefore barred by the Eleventh Amendment.
RPENM also argues that, even looking beyond its complaint, the course of
the proceedings as a whole showed its claims against Propst and Pittard were
individual-capacity claims. To this end, it points to its request for punitive damages,
its allegations that Propst and Pittard were personally involved in the events giving
rise to its claim, its reference to Propst and Pittard as individuals, and Propst and
Pittard’s defense of qualified immunity. We reject this argument because, although
the district court did not give controlling weight to the caption in RPENM’s
complaint, it did not look beyond the complaint itself to conclude RPENM’s claims
were, in substance, asserted against Propst and Pittard in their official capacities.
4. Waiver
Finally, RPENM argues that, even if Propst and Pittard were sued in their
official capacities and otherwise entitled to Eleventh Amendment immunity, the
district court erred in concluding they did not waive that immunity. We need not
resolve this argument because, as the district court concluded below, even if Eleventh
Amendment immunity was waived, making way for a § 1983 claim, a state official
acting in his official capacity is not a “person” within the scope of a § 1983 claim for
damages. See Ross v. Bd. of Regents of the Univ. of N.M., 599 F.3d 1114, 1117
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(10th Cir. 2010). RPENM does not challenge that conclusion on appeal. Because the
district court correctly construed RPENM’s complaint as asserting official-capacity
claims against Propst and Pittard, RPENM’s § 1983 claims necessarily failed as a
matter of law.
CONCLUSION
We affirm the judgment of the district court.
Entered for the Court
Joel M. Carson III
Circuit Judge
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