Blackburn v. City of Marshall ( 1995 )

UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
__________________
No. 93-5149
__________________
JIMMY BLACKBURN,
Plaintiff-Appellant,
versus
MARSHALL CITY OF, ET AL.,
Defendants-Appellees.
______________________________________________
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
part.
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
wrecker.
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
2
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
3
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
1
In paragraph 36 of his complaint, Blackburn states both that
he received a hearing and that he did not.
2
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."
4
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
relationships.
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.
3
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.
5
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.
Discussion
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
6
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
7
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
8
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
9
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 (8th
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
10
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
11
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
added).
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
12
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
4
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.
13
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
14
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
5
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.
6
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."
15
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
7
The complaint expressly alleged City liability on the basis
of, inter alia, ratification. See City of St. Louis v.
Praprotnik, 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.
16
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.
Davis, 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
8
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."
17
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 (1977)).
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
18
"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
9
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).
10
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.
Wood, 96 S. Ct. 2074, 2079 (1976). Accordingly, this alleged
statement cannot form the basis for Blackburn's liberty interest
claim.
19
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 (1994).12
11
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."
12
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.
20
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,
21
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,
13
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.
Vandygriff, 711 F.2d 1217, 1222 (5th Cir. 1983), which we
consider in detail in the text, infra. Cowan then concludes by
stating:
"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
omitted).
22
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
23
construed it, asserted a right to do business with private
individuals.
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,
Okla., 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
24
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
25
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 (3d
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
14
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
added).
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.
26
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 (2d
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
27
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.
Id.16
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
15
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.
16
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.
28
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
29
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
30
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
business. 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
31
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
Agriculture, 991 F.2d 1211, 1216 (5th Cir. 1993); Coghlan v.
Starkey, 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
32
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.
Conclusion
For the foregoing reasons, the judgment of the district court
is AFFIRMED in part and REVERSED in part, and the cause is
REMANDED.
33