Douglas Skokos v. Bruce Rhoades , 440 F.3d 957 ( 2006 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 05-2374
___________
Douglas Skokos; Tim H. Chapman, *
*
Appellants, * Appeal from the United States
* District Court for the
v. * Western District of Arkansas
*
Bruce Rhoades, in his individual *
capacity; City of Fort Smith, doing *
business as Fort Smith Police *
Department, a municipality; Steve *
Tabor, Sebastian County Prosecutor, *
in his offical capacity; Ed Smally, *
FSPD, Officer Badge #4105; J. C. *
Phillips, FSPD, Officer Badge #4083; *
Paul Smith, Officer Badge #4188; *
E. Mahan, FSPD, Officer Badge *
#4215, *
*
Appellees. *
___________
Submitted: November 14, 2005
Filed: March 10, 2006
___________
Before ARNOLD, BEAM, AND RILEY, Circuit Judges.
___________
ARNOLD, Circuit Judge.
Douglas Skokos and Tim Chapman appeal the district court's1 dismissal of their
action, which was brought under 42 U.S.C § 1983. Mr. Skokos also appeals the
denial of his request for attorney's fees under 42 U.S.C. § 1988. For the reasons
stated below, we affirm.
I.
Mr. Skokos and Mr. Chapman each owned a business in Fort Smith, Arkansas,
in which he had on the premises a so-called countertop machine, a device upon which
customers could play up to seventy different electronic games. While most of those
games were not games of chance, the machines did offer poker and blackjack. They
did not pay out any winnings.
Defendant Bruce Rhoades, the prosecuting attorney for Sebastian County,
Arkansas, sent out letters to several Fort Smith businesses, including those of
plaintiffs, stating that their countertop machines violated Arkansas law. When the
businesses did not remove the machines, Mr. Rhoades asked the local police to
investigate. Relying on Mr. Rhoades's legal opinion that the machines violated
Arkansas law, police seized Messrs. Skokos and Chapman's countertop machines
from their businesses. These seizures were carried out without the issuance of any
search warrants.
Mr. Skokos then brought the present action against the City of Fort Smith and
Mr. Rhoades, seeking declaratory, injunctive, and compensatory relief. Soon
thereafter, Mr. Rhoades commenced a forfeiture proceeding in state court, and the
district court abstained from exercising its jurisdiction pending resolution of the state-
court proceeding. The state trial court held that the countertop machines were not
1
The Honorable Jimm Larry Hendren, Chief Judge, United States District Court
for the Western District of Arkansas.
-2-
illegal under Arkansas law, and the Arkansas Supreme Court, with two justices
dissenting, affirmed the judgment. State v. 26 Gaming Machines, 356 Ark. 47, 145
S.W.3d 368 (2004).
With the forfeiture proceeding concluded, the parties returned to federal court.
Once there, Mr. Skokos amended the complaint to add Mr. Chapman as a plaintiff
and four individual police officers and a prosecutor, Steve Tabor, as defendants.
After the complaint was amended, Messrs. Rhoades and Tabor asked the court to
dismiss the claims against them. The district court largely granted this motion,
holding that Mr. Skokos's claims against Mr. Tabor were moot and that any claims
against Mr. Rhoades in his personal capacity either failed to state a claim or were
barred by qualified immunity. Mr. Skokos then requested the court to award him
attorney's fees under § 1988 for the costs that he incurred in the state forfeiture
proceeding. The court denied the motion on the ground that while Mr. Skokos had
prevailed in state court, none of his federal claims was successful. Because of this,
the court held, Mr. Skokos was not a "prevailing party" for § 1988 purposes.
The City of Fort Smith and the individual police officers (collectively referred
to as the city defendants) then moved for summary judgment. The court granted the
motion, holding that the officers had probable cause to believe that the countertop
machines were contraband. Because the machines were found in plain view, the court
reasoned, the police were justified in seizing them without first obtaining a warrant.
The court also held that the city defendants had not violated the plaintiffs' liberty
interests in running legitimate businesses because the police officers did not possess
an intent to injure and their conduct did not shock the conscience.
II.
A.
Messrs. Skokos and Chapman argue that the seizure of their countertop
machines violated their fourth amendment rights. Since Mr. Rhoades was acting in
-3-
an investigatory capacity in advising the police that the machines were illegal under
Arkansas law, he is eligible only for qualified immunity, not absolute prosecutorial
immunity. See Anderson v. Larson, 327 F.3d 762, 769 (8th Cir. 2003). Mr. Rhoades
is entitled to qualified immunity if his legal opinion was reasonable when made. Like
a police officer, a prosecutor is "entitled to make a reasonable interpretation of the
law he is obligated to enforce." Cf. Habiger v. City of Fargo, 80 F.3d 289, 296 (8th
Cir. 1996), cert. denied, 519 U.S. 1011 (1996); see also Gorra v. Hanson, 880 F.2d
95, 97 (8th Cir. 1989).
While the Arkansas Supreme Court ultimately rejected Mr. Rhoades's position,
we believe that his interpretation of Arkansas law was reasonable. When
Mr. Rhoades first rendered his opinion, the Arkansas Supreme Court had not yet ruled
on the precise issue involved in this case; Mr. Rhoades therefore looked to analogous,
if factually different, cases. In one case, the Arkansas Supreme Court had held that
a machine could be a gaming device per se even if it offered no payout. See Stanley
v. State, 194 Ark. 483, 483-85, 107 S.W.2d 532, 533-34 (1937). In another case, the
court held that video poker machines were illegal gaming devices. Sharp v. State,
350 Ark. 529, 530-31, 88 S.W.3d 848, 849 (2002). In addition, there is statutory
language that exhorts judges to interpret the gaming laws broadly so that offenders
cannot evade their effect through technological changes. Ark. Code Ann. § 5-66-101.
Furthermore, when Mr. Rhoades's legal interpretation was argued to the Arkansas
Supreme Court, two justices agreed with it. See 26 Gaming Machines, 356 Ark. at
57-58, 145 S.W.3d at 375 (Thornton, J., dissenting, joined by Glaze, J.). Given all
of this, we hold that Mr. Rhoades's interpretation of the law was manifestly
reasonable and that he is therefore entitled to qualified immunity on this claim.
B
The plaintiffs also contend that the officers' seizures were unreasonable
because they seized the items without first obtaining any warrants. As
Messrs. Skokos and Chapman point out, there is a general preference in the law for
-4-
search warrants, see United States v. Leppert, 408 F.3d 1039, 1042 (8th Cir. 2005),
and the failure to secure a warrant before making a seizure will be excused only if it
qualifies for a specific exception to the warrant requirement. Dixon v. Lowery, 302
F.3d 857, 862 (8th Cir. 2002). The city defendants argue that the officers needed no
warrant because their actions fit within the so-called plain-view exception to the
warrant requirement.
The plain-view exception permits an officer to make a warrantless seizure
when he or she does not violate the fourth amendment in reaching the place from
which the object can be viewed, the object's incriminating character is "immediately
apparent," and "the officer has a lawful right of access to the object itself." United
States v. Collins, 321 F.3d 691, 694 (8th Cir. 2003) (internal quotations omitted),
cert. denied, 540 U.S. 1076 (2003). All parties concede that the officers lawfully
entered the plaintiffs' establishments and that they had lawful access to the countertop
machines. The only question is whether the incriminating nature of the countertop
machines was "immediately apparent."
The plaintiffs argue that the illegal nature of the countertop machines was not
immediately apparent. They cite to both Arizona v. Hicks, 480 U.S. 321, 325 (1987),
and Minnesota v. Dickerson, 508 U.S. 366, 378-79 (1993), for the proposition that a
warrantless search may not be justified under the plain-view exception where the
police must manipulate the object to verify that it is contraband. Messrs. Skokos and
Chapman contend that because the machines were subjected to later testing, it was not
immediately apparent to the officers that the machines were contraband. Such
uncertainty, according to the plaintiffs, prevented the police from relying on the plain-
view doctrine and caused the warrantless seizures to be unreasonable.
As the city defendants point out, however, the term "immediately apparent"
does not really mean what it seems to say. The plaintiffs would have us require near
certainty before a plain-view seizure could occur. But the Supreme Court has rejected
-5-
that proposition, and in fact has said "that the use of the phrase 'immediately apparent'
was very likely an unhappy choice of words, since it can be taken to imply that an
unduly high degree of certainty as to the incriminatory character of evidence is
necessary." Texas v. Brown, 460 U.S. 730, 741 (1983). For an item's incriminating
character to be immediately apparent, the police merely need probable cause to
believe that the item is contraband. Id. at 741-42. Once that probable cause exists,
a plain-view seizure of the item is permissible.
Here, the police had probable cause to believe that the countertop machines
were contraband. They relied on Mr. Rhoades's legal opinion, which, as we noted
above, was reasonable when offered. When the officers saw machines meeting
Mr. Rhoades's criteria, therefore, they were justified in seizing them as contraband.
III.
The plaintiffs also argue that the district court erred in concluding that they
failed to state a claim for the denial of substantive due process under § 1983 based
on their allegations that Mr. Rhoades and the city defendants seized the countertop
machines and made false statements to the press regarding them and their businesses.
These actions, they say, impaired their ability to operate legitimate businesses and
harmed their reputations. Relying on San Jacinto Savings & Loan v. Kacal, 928 F.2d
697, 701-02 (5th Cir. 1991) (per curiam), Messrs. Skokos and Chapman maintain in
their brief that "[f]alse statements made by a state actor accompanied by an
infringement of some other interest ... is actionable under § 1983."
To make out a substantive due-process violation, the plaintiffs must show that
the defendants' actions deprived them of their liberty interests in running legitimate
businesses. Not all conduct by a state actor that injures a private party, of course, can
amount to a due-process violation. See County of Sacramento v. Lewis, 523 U.S. 833,
848 (1998). For the conduct to amount to a constitutional deprivation, the state
actor's conduct must be egregious, Bonebrake v. Norris, 417 F.3d 938, 942 (8th Cir.
-6-
2005), or, in other words, " 'arbitrary, or conscience shocking, in a constitutional
sense.' " Lewis, 523 U.S. at 847 (quoting Collins v. City of Harker Heights, Tex., 503
U.S. 115, 128 (1992)). But what conduct is egregious? As Lewis states, a court must
engage in "an exact analysis of circumstances before any abuse of power is
condemned as conscience shocking." Lewis, 523 U.S. at 850. The decision is based,
in part, on whether the officials were forced to make an instantaneous decision, or
whether they instead had time to deliberate and choose their course of action. See id.
at 852-54.
In challenging the district court's decision, the plaintiffs contend that the
district court erred by requiring the defendants to have had an "intent to injure" when
"deliberate indifference" was enough to support the claim. But we need not resolve
that question because, having reviewed the record, we are drawn inexorably to the
conclusion that neither Mr. Rhoades nor the Fort Smith police, in seizing the
machines and commenting on those seizures to the press, acted with deliberate
indifference. As we stated above, Mr. Rhoades's legal opinion about the legality of
the countertop machines was reasonable when made, and the officers' seizures did not
violate the fourth amendment. For conduct to amount to deliberate indifference, the
state actor must have subjectively understood his actions as creating a substantial risk
of a constitutional deprivation. See Hart v. City of Little Rock, 432 F.3d 801, 806 (8th
Cir. 2005). Here, however, there is no evidence that Rhoades or the officers believed
that their actions would violate the plaintiffs' constitutional rights.
IV.
Mr. Skokos also appeals the denial of his motion for attorney's fees. He argues
that because his victory in state court led to the return of his countertop machine, he
is a "prevailing party" for § 1988 purposes and is therefore entitled to such fees. See
42 U.S.C. 1988(b). We review this question de novo. See Cody v. Hillard, 304 F.3d
767, 772 (8th Cir. 2002).
-7-
We have held that a plaintiff who loses on the merits of his federal claims is not
a "prevailing party" for § 1988 purposes, just because he prevails on a related pendent
state-law claim. See John T. v. Marion Indep. Sch. Dist., 173 F.3d 684, 689 (8th Cir.
1999). Sometimes, however, such a plaintiff can be a prevailing party. For one thing,
the legislative history of § 1988 indicates that where a federal court grants relief on
a state-law claim to avoid a constitutional issue, it may award attorney's fees if the
constitutional claim was "substantial" and both the constitutional and the state-law
claims arose out of a "common nucleus of operative fact." See H.R.Rep.No. 94-1558,
at 4 n.7. Federal courts, moreover, may award plaintiffs attorney's fees for state-court
proceedings that are essential to their federal claims. The Supreme Court, for
instance, has permitted Title VII plaintiffs to recover attorney's fees for state
administrative proceedings that they were required to exhaust. New York Gaslight
Club, Inc. v. Carey, 447 U.S. 54, 71 (1980).
Mr. Skokos argues that his case qualifies for one of these exceptions. He
contends that his case is like Exeter-West Greenwich Reg'l Sch. Dist. v. Pontarelli,
788 F.2d 47 (1st Cir. 1986), where the district court awarded attorney's fees to a
plaintiff who had prevailed before the state supreme court. In that case, the plaintiffs
filed a § 1983 action in federal court alleging that a state official's order requiring a
school district to fund a pupil's attendance at a religious high school violated the
establishment clause. Pontarelli, 788 F.2d at 48-49. The district court, wishing to
avoid deciding the case on constitutional grounds, certified a question to the state
supreme court asking if the relevant state official correctly interpreted state law as
requiring the funding. Id. at 49. Once the state court agreed to hear the case, the
federal court abstained under Railroad Comm'n of Tex. v. Pullman Co., 312 U.S. 496,
500-01 (1941). The state supreme court held that the state official misinterpreted
state law and that the funding was not required. Pontarelli, 788 F.2d at 49-51.
Once the state-court proceeding was complete in Pontarelli, the district court
dismissed the plaintiffs' constitutional claims as moot. It awarded attorney's fees to
-8-
the plaintiffs, though, because the answer to the certified question had allowed the
district court to avoid deciding the constitutional issue. Id. at 50-51. Although the
plaintiffs prevailed only in state court, the First Circuit held that the issue decided by
the state court was "in litigation" in the federal case "because the district court
determined that under the abstention doctrine ... the issue had to be decided by the
[state supreme court] before the federal court could reach the constitutional issues in
the case [before it]." Id. at 51. We believe that by accepting the state supreme court's
answer to the certified question the federal court in Pontarelli had in essence decided
the state-law claim. We recognized as much when we said that the "federal court [in
Pontarelli] actually settled the case, merely relying on the state court for assistance."
Quinn v. Missouri, 891 F.2d 190, 193 (8th Cir. 1989) (per curiam).
Despite Mr. Skoko's protestations, we believe that this case is unlike
Pontarelli. Although, as in Pontarelli, Mr. Skokos received relief only on a state-law
claim, our case differs from Pontarelli in two key respects. First, the state proceeding
here was not a necessary part of the § 1983 litigation. In Pontarelli, the district court
forced the plaintiffs to litigate in state court as part of their § 1983 action. The district
court here did not request the state court's aid and then push the plaintiffs to litigate
in the state forum; rather, it was Mr. Rhoades who initiated the separate state
forfeiture proceeding. Once the state action was underway, the federal court had to
abstain in the nascent § 1983 action under Younger v. Harris, 401 U.S. 37 (1971).
See Deakins v. Monaghan, 484 U.S. 193, 202 (1988). It is incorrect, therefore, to
consider the state forfeiture proceeding a necessary part of the larger federal
litigation.
Second, in Pontarelli, once the state supreme court ruled on the state-law
matter, the federal court no longer had to decide the constitutional issue. The federal
court dismissed the case as moot because the resolution of the constitutional claims
was no longer necessary. In this case, however, the Arkansas Supreme Court's
decision did not moot Mr. Skokos's constitutional claims: The district court
-9-
dismissed the case not because there were no live claims, but because it considered
those claims to be without merit. Cf. Reel v. Arkansas Dep't of Correction, 672 F.2d
693, 698 (8th Cir. 1982). Like the plaintiffs in Quinn, 891 F.2d at 194, Mr. Skokos
has "gained nothing from [his] federal court suit." He is therefore not a prevailing
party for the purposes of § 1988.
V.
For the reasons stated above, we affirm the district court.
______________________________
-10-