Spec's Family Partners v. Jones ( 2021 )

Case: 21-20009 Document: 00515996657 Page: 1 Date Filed: 08/26/2021
United States Court of Appeals
for the Fifth Circuit
United States Court of Appeals
Fifth Circuit
FILED
August 26, 2021
No. 21-20009 Lyle W. Cayce
Clerk
Spec’s Family Partners, Limited,
Plaintiff—Appellant,
versus
Dexter K. Jones; Emily E. Helm; Judith L. Kennison;
Matthew Edward Cherry,
Defendants—Appellees.
Appeal from the United States District Court
for the Southern District of Texas
No. 4:18-CV-2670
Before Stewart, Ho, and Engelhardt, Circuit Judges.
Per Curiam:*
Spec’s Family Partners, Limited (“Spec’s”) appeals from the
district’s court dismissal of its 42 U.S.C. § 1983 suit against the Texas
Alcoholic Beverage Commission (“TABC”) for failure to state a claim. We
*
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opinion should not be published and is not precedent except under the limited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.
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No. 21-20009
must decide whether the district court correctly concluded that qualified
immunity required dismissal of Spec’s’ claim. We affirm.
I.
This case, now before us on appeal for the second time, arises out of
an investigation and administrative proceedings initiated by the TABC
against Spec’s. The facts and procedural history are thoroughly laid out in
our previous decision, so we confine our discussion to what is relevant to this
appeal. See Spec’s Family Partners, Ltd. v. Nettles, 972 F.3d 671, 674–75 (5th
Cir. 2020).
During the investigation, Judith Kennison and “other representatives
of the TABC” allegedly concealed documents from Kathy Anderson, a
TABC auditor, to obtain testimony from her that Spec’s violated the Texas
Alcoholic Beverage Code. Kennison allegedly knew the documents did not
establish any violation of the Code. Spec’s asserts that the TABC used
Anderson’s testimony as leverage to force Spec’s to settle and to supplement
its allegations against Spec’s.
During the administrative proceedings, a panel of administrative law
judges resolved some of the TABC’s charges in favor of Spec’s as a matter
of law, and the remainder went to a hearing. At the multi-day hearing, Spec’s
cross-examined Anderson, who stated that her earlier testimony was
incorrect. The panel sided with Spec’s on all but one of the charges, for
which it recommended a warning.
Relevant here, Spec’s then sued several TABC employees, including
Kennison, Emily Helm, Dexter Jones, and Matthew Cherry (collectively
“Defendants”) under 42 U.S.C. § 1983, the Sherman Act, and state law,
seeking declaratory and injunctive relief.
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The district court dismissed all of Spec’s’ federal claims and declined
to exercise supplemental jurisdiction over its state law malicious prosecution
claims. We affirmed except as to Defendants’ claim that they are entitled to
absolute immunity for actions taken during the investigation and before the
administrative proceedings began. Spec’s, 972 F.3d at 680 & n.7. As to that
claim, we held that Defendants were not acting in a prosecutorial capacity
and therefore could not claim absolute immunity. Id. Thus, we remanded
that issue. Accordingly, we also vacated the dismissal of Spec’s’ state law
malicious prosecution claim on supplemental jurisdiction grounds. Id. at
684.
On remand, Defendants filed a new motion to dismiss based on
qualified immunity. The district court determined that Spec’s failed to show
a violation of its constitutional rights and accordingly granted the motion to
dismiss. The court again declined jurisdiction over the state law claims.
Spec’s timely appealed.
We review de novo a district court’s dismissal under Federal Rule of
Civil Procedure 12(b)(6). Sw. Bell Tel., LP v. City of Houston, 529 F.3d 257,
260 (5th Cir. 2008). To survive a Rule 12(b)(6) motion to dismiss, Spec’s
must plead “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). We “take the
well-pleaded factual allegations in the complaint as true” but do “not credit
conclusory allegations or allegations that merely restate the legal elements of
a claim.” Chhim v. Univ. of Texas at Austin, 836 F.3d 467, 469 (5th Cir. 2016).
II.
Spec’s alleges that Defendants violated its Fourteenth Amendment
due process rights when they allegedly concealed evidence during the
investigatory phase of the TABC proceedings. Specifically, Spec’s argues
that the district court erred by “declin[ing] to extend due process protections
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to an administrative case where there was a violation of Appellant’s
constitutional rights.”
Defendants assert qualified immunity. “When a defendant raises a
qualified immunity defense, the plaintiff has the burden of demonstrating the
inapplicability of that defense. To meet this burden, the plaintiff must show
(1) that the official violated a statutory or constitutional right, and (2) that the
right was clearly established at the time of the challenged conduct.” Turner
v. Lieutenant Driver, 848 F.3d 678, 685 (5th Cir. 2017) (quotations omitted).
Here, Spec’s fails to plead sufficient facts to state a claim that
Defendants violated its constitutional rights. “To state a Fourteenth
Amendment due process claim under § 1983, a plaintiff must first identify a
protected life, liberty or property interest and then prove that governmental
action resulted in a deprivation of that interest.” Gentilello v. Rege, 627 F.3d
540, 544 (5th Cir. 2010) (quotations omitted). For the purposes of this
appeal, we assume that Spec’s has a protected property interest.
To plead a procedural due process violation, Spec’s must plead
sufficient facts to state a claim “that the deprivation of [its] property right
occurred without due process of law.” Marco Outdoor Advert., Inc. v. Reg’l
Trans. Auth., 489 F.3d 669, 672 (5th Cir. 2007). As the Supreme Court has
made clear, “the fundamental requirement of due process is the opportunity
to be heard ‘at a meaningful time and in a meaningful manner.’” Mathews v.
Eldridge, 424 U.S. 319, 333 (1976) (quoting Armstrong v. Manzo, 380 U.S. 545,
552 (1965)).
Here, Spec’s’ own complaint indicates that it received both notice and
an opportunity for a hearing before a panel of administrative law judges. The
panel resolved some of the TABC’s charges in favor of Spec’s as a matter of
law. The panel then conducted a multi-day evidentiary proceeding at which
Spec’s was able to rebut the TABC’s charges. Specifically, Spec’s cross-
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examined Anderson and elicited a favorable admission that her previous
testimony was incorrect. Ultimately, the panel ruled for Spec’s on all charges
except one, for which it only issued a warning. Spec’s does not cite a single
case that holds that the plaintiff can state a procedural due process
deprivation sufficient to survive a motion to dismiss where the plaintiff had
the opportunity to be heard in the administrative proceedings, cross-
examined witnesses, and prevailed on all charges save for a warning.
Thus, we conclude that Spec’s has failed to state a claim for a violation
of a constitutional right. Because Spec’s has not pleaded a violation, we do
not address the clearly established prong.
Finally, a district court has discretion to decline supplemental
jurisdiction over state law claims when it “has dismissed all claims over
which it has original jurisdiction.” 28 U.S.C. § 1367(c)(3). We review a
decision to decline supplemental jurisdiction for abuse of discretion. See
Batiste v. Island Records, Inc., 179 F.3d 217, 226 (5th Cir. 1999). Because the
district court correctly dismissed all of Spec’s’ federal law claims, it did not
abuse its discretion in declining to exercise supplemental jurisdiction over
Spec’s’ state law claims.
Accordingly, we AFFIRM.
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