### IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT

No. 19

- 40970 Summary Calendar

LUCKY TUNES #3, L.L.C., a Texas limited liability company,

Plaintiff

- Appellant

v. LARRY R. SMITH, a Texas individual; JASON RAILSBACK, a Texas individual,

Defendants

- Appellees

Appeal from the United States District Court for the Eastern District of Texas U S D C No. 6:18

- CV

- 563

Before WIENER, HAYNES, and COSTA, Circuit Judges

. PER CURIAM: * Lucky Tunes #3 LLC ’s suit against two Texas police officers for alleged violations of federal and Texas law was dismissed for failure to state a claim. After clarifying which claims were dismissed with prejudice and which without, w e AFFIRM as modified

.

* Pursuant to 5 TH C IR . R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5 TH C IR . R. 47.5.4. United States Court of Ap peals Fifth Circuit 

### FILED May 1, 2020 Lyle W. Cayce Clerk Case: 19-40970 Document: 00515402379 Page: 1 Date Filed: 05/01/2020No. 19

- 40970

2 I. Background Lucky Tunes is a n establishment that sells certificates to redeem and download song file s from lucky7downloads.com, a repository of several thousand licensed songs. 1 The certificates are sold alongside “free sweepstakes” promotion s . A t the rate of one dollar per song, customers purchase certificates, which come with 100 entries into the swe epstakes. Patrons can also receive up to 100 free entries per day by logging in at the store and can request further free entries by mail. To find out if they have won, patrons can either instantly reveal the outcome or play games that “mimic casino attr actions” via “gambling simulation

. ” When playing the games, sweepstakes credits are “ represented with a dollar sign

. ” Prizes for winning

are paid in cash regardless of the method of revealing the outcome. In 2017, before Lucky Tunes opened for business, Sheriff Larry Smith of Smith County, Texas, sent a letter to local business owners regarding potential illegal gambling operations in the county. Sheriff Smith said that his office was “investigating complaints that illegal gambling [was] occurring” in the county and asked for “voluntary compliance” by removing illegal gambling machines. He explicitly referenced games that were being advertised as sweepstakes but were being operated illegally. A little over a year later, counsel for Lucky Tunes’s parent company sent a reply explaining that the free sweepstakes promotion s did not violate Texas law. Nonetheless, Smith County police obtained two warrants to search Lucky Tunes. The first was obtained by Detective Jason Rail s back in September 2018. Det. Rail s back based his warrant affidavit on an undercover investigation he and Sergeant Shawn White conducted at Lucky Tunes, during

1 The website is run by Lucky Tunes’s parent company, Lucky 7 Downloads LLC. Case: 19-40970 Document: 00515402379 Page: 2 Date Filed: 05/01/2020No. 19

- 40970

3 which the officers each purchased $20 .00 in songs and played electronic games

. Det. Rail s back reported that in ex change for a $20 .00 bill, each officer received a receipt showing that 100 entries had been added to his account, “an available balance of $21.00,” and a PIN for playing games. He also said that they received “a separate receipt .

. . that was a ‘gift car d’ with $20.00 indicated” and that “advised we could use the code to go to their website .

. . and get music.” Det. Rail s back then described the process of playing the machines: After entering the PIN, “[t]he account showed a balance of ‘$21.00’ with doll ar sign insignia beside the amount indicating it was in fact [U.S. currency] being depicted on the machines and not ‘credits.’” He “noted that the minimum ‘bet’ allowed on the machine was ‘$.32,’” “placed the $.32 bet,” and won free spins that eventually turned into a prize of “approximately $7.60.” He then said that after playing further and going to the attendant , “ [t] he machine I was playing on showed a balance of ‘$25.60’ and the cashier .

. . pulled up my account and then provided me with $25.00 .

. . as payout.” He described a similar experience for Sgt. White. The detective then alleged the following: “The devices .

. . include gambling device versions of slots that operate by chance or partially so, that as a result of the game, award [] credits fo r cash [and] are not designed, made, and adapted solely for bona fide amusement purposes

. . . .” He concluded , “ Affiant believes the machines located at the location .

. . are gambling devices as defined by [Texas] Penal Code [section] 47.01(4) and do not fall under the exception listed under [ section ] 47.01(4)(B).” A judge issued a search warrant, which Smith County officers executed, confiscating property and seizing funds totaling $30,779 .00 . T he State of Texas then initiated a civil forfeiture act ion , which is still pending, against Lucky Tunes. Case: 19-40970 Document: 00515402379 Page: 3 Date Filed: 05/01/2020No. 19

- 40970

4 In February 2019, Sgt. White obtained another warrant based on his experience during the same investigation. His affidavit was substantially similar to Det. Rail s back’s , but Sgt. White also said in relevan t part that he “placed what appear[ed] to be ‘Bets’ according to the definition provided by the Penal Code ” and that his winnings “[did] not appear in any way to be a pre

determined outcome.” A second search occurred less than five months after the first

. Lucky Tunes sued Sheriff Smith in his individual and official capacit ies and Det. Railsback in his individual capacit y in federal district court under 42 U.S.C. § 1983

. Its complaint alleged violations of the Fourth, Fifth, and Fourteenth Amendments to t he U.S. Constitution , violations of s ections 9, 13, and 19 of Article I of the Texas Constitution , and Texas common

- law conversion

. Lucky Tunes request ed damages and injunctive and declaratory relief

. S heriff S mith and Det. Railsback moved to dismiss, arguing that they were protected by qualified immunity and that Lucky Tunes had failed to state a claim on which relief could be granted. They attached records of gambling charges against Lucky Tunes patrons to their motion. The district court granted the officers’ motion to dismiss, holding that Lucky Tunes failed to meet the pleading standard of Federal Rules of Civil Procedure 8(a)(2) and 12(b)(6) and that the officers were entitled to qualified immunity. Lucky Tunes timel y appealed.

II. Standard of Review
We re view dismissals under Rule 12(b)(6) de novo. Romero v. City of Grapevine , 888 F.3d 170, 176 (5th Cir. 2018) . “ To survive a motion to dismiss under Rule 12(b)(6), ‘ a complaint must contain sufficient factual matter,

acc epted as true, to state a claim to relief that is plausible on its face. ’” Id. (quoting Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009) ). The pleaded facts must Case: 19-40970 Document: 00515402379 Page: 4 Date Filed: 05/01/2020No. 19

- 40970

5 “ allow [] the court to draw the reasonable inference that the defendant is liable for the miscondu ct alleged.” Iqbal , 556 U.S. at 678

. We accept all well

- pleaded facts as true and view them in the light most favorable to the nonmoving party.
Romero , 888 F.3d at 176.

III. Discussion We first address Lucky Tunes’s federal claims. A plaintiff suing an
indi vidual under § 1983 must show the following: (1) “a violation of rights secured by the Constitution or laws of the United States” (2) perpetrated by “a person or entity acting under color of state law. ” Doe ex rel. Doe v. Dall

. Indep. Sch. Dist. , 153 F.3d 211, 215 (5th Cir. 1998) (brackets and quotation omitted). The doctrine of qualified immunity shields government officials sued in their individual capacity “ from liability for civil damages insofar as their conduct does not v iolate clearly established statutory or constitutional rights of which a reasonable person would have known.” Harlow v. Fitzgerald , 457 U.S. 800, 818 (1982). Lucky Tunes argues that it adequately stated a claim under § 1983 by alleging that Sheriff Smith and Det. Railsback acted under color of state law and violated (1) the Fourth Amendment by conducting two unreasonable searches and seizures and (2) the Fifth Amendment, as incorporated by the Fourteenth Amendment, by taking Lucky Tunes’s property without just compensation. Lucky Tunes submits that the district court erred by failing to accept the well

- pleaded facts as true or view them in the light most favorable
to Lucky Tunes.

A. Fourth Amendment Claims Lucky Tunes’s Fourth Amendment claim is premised on F ranks v. Delaware , 438 U.S. 154 (1978). Under Franks , a search and seizure backed by a search warrant nevertheless may be unreasonable if “ a false statement Case: 19-40970 Document: 00515402379 Page: 5 Date Filed: 05/01/2020No. 19

- 40970

6 knowingly and intentionally, or with reckless disregard for the truth, was included by the affiant in the warrant affidavit, and if the allegedly false statement is necessary to the finding of probable cause .” Id. at 155

– 56. A challenger may also show an “ intentional or reckless omission of material facts from a warrant application .” Kohler v. Engla de , 470 F.3d 1104, 1113 (5th Cir. 2006)

. When determining whether a false statement or omission is material,

a court must excise any false statements and “insert [any] omitted facts into the affidavit and ask whether the reconstructed affidavit would stil l support a finding of probable cause.” Id. ; see also United States v. Namer , 680 F.2d 1088, 1093 (5th Cir. 1982). In this case, the affidavits alleged that Lucky Tunes had violated section s 47.0 3, .04, and .06 of the Texas Penal Code, which prohibit knowingly using real property for gambling, promoting gambling, and possessing gambling devices. In relevant part, section 47.01(4) defines a “gambling device” as one “that for consideration affords the player an o pportunity to obtain anything of value, the award of which is determined solely or partly by chance.” Lucky Tunes complains that the affidavits both falsely stated that the officers placed “bets” at Lucky Tunes and omitted “the known fact that all of [Luc ky Tunes’s] sweepstakes games were at all times free.” The district court, it says, erred by considering the possibility that Lucky Tunes was running an illegal gambling operation that involved bets despite its allegations that the sweepstakes were free a nd advertised as such , and therefore legal

. Lucky Tunes argues that the district court should have, and this court must, take as true “that its sweepstakes are all always free, and that ‘bets’ are impossible.” Therefore, Lucky Tunes claims, “there was ca tegorically no crime, and hence no probable cause.” Case: 19-40970 Document: 00515402379 Page: 6 Date Filed: 05/01/2020No. 19

- 40970

7 T his argument is fantasy

. Probable cause “ requires only a probability or substantial chance of criminal activity .” District of Columbia v. Wesby , 138 S. Ct. 577, 586 (2018) ( quotation omitted )

. It has never been the case that a constitutional violation arises when the conduct in question turns out to be legal. Instead, we must ask whether , under the totality of the circumstances, the facts known to the officer at the time of the affidavit would lead an objectively reasonable officer to believe there was probable cause. See id. We hold that the affidavit s established probable cause even if we omit the references to betting and insert the facts that the sweepstakes were advertised as free a nd did not involve a transaction separate from the music download certificates

. 2 Therefore, Lucky Tunes did not plead facts to support a showing of materiality under Franks

. See Kohler , 470 F.3d at 1113

. Under Texas law, “free sweepstakes” can neverthele ss violate Chapter
47. See, e.g. , United States v. Davis , 690 F.3d 330 , 339

– 40 (5th Cir. 2012) ; Texas v. Ysleta del sur Pueblo , EP

- 99

- CV

- 320

- KC, 2015 WL 1003879, at *23 (W.D. Tex. Mar. 6, 2015) ; State v. Fellows , 471 S.W.3d 555 , 567 (Tex. App.

— Corpus Christi, 2015, pet. re f ’d) ; Jester v. State , 64 S.W.3d 553 , 558

– 59 (Tex. App.

— Texarkana 2001, no pet.) . This is because “ the consideration element in the Texas gambling statutes can be fulfilled without an explicit exchange of money for the opportu nity to participate in a sweepstakes.” Davis , 690 F.3d at
339. The question i n this case would be “whether the sweepstakes was intended to promote the sale of [music downloads] or whether the [downloads] were there as an attempt to legitimize an illegal gambling device

. ” See Jester , 64 S.W.3d 553 at 558.

2 We note that, under the case law cited below, whether a “bet” takes place or a sweepstakes is truly “free” is a question of law

— in deed, a crucial question in determining whether a sweepstakes is gambling

— and is therefore not a fact that we must accept as true. Case: 19-40970 Document: 00515402379 Page: 7 Date Filed: 05/01/2020No. 19

- 40970

8 Given the similarity of Lucky Tunes’s business model to those that have been found illegal, we conclude that the affidavits demonstrated probable cause to believe that the true object of transactions a t Lucky Tunes was the sweepstakes and not the music downloads. See, e.g. , Davis , 690 F.3d at 333, 339 (internet time was sold alongside sweepstakes entries that could also be obtained for free); Jester , 64 S.W.3d at 558 ( telephone cards were sold alongside sweepstakes entries that could also be obtained for free)

. Lucky Tunes’s storefront housed casino

- themed games, which represented the “free entries”

as currency

. Lucky Tunes paid out cash prizes multiple times larger than the amount paid for th e music downloads, which could only be accessed by independently visiting the Lucky 7 Downloads website. We of course do not determine whether this was gambling under the definition of the statute

— we hold only that the affidavits established probable caus e that it was. 3 Therefore, Lucky Tunes failed to allege that the affidavits were materially false or misleading.

B. Other Federal Claims Lucky Tunes’s Fifth and Fourteenth Amendment due process claims fail because (1) the Fifth Amendment ’s due process clause applies only to federal actors, see Jones v. City of Jackson , 203 F.3d 875, 880 (5th Cir. 2000) , and (2) a Fourteenth Amendment due process claim is not the proper means to challenge conduct specifically addressed by the Fourth Amendment, see Cuadra v. Ho us. Indep. Sch. Dist. , 626 F.3d 808, 814 (5th Cir. 2010)

. Lucky Tunes asserts that it also stated a claim under the Fifth Amendment’s Takings Clause, but to the

3 We also do not make “a finding of fact that the music was a subterfuge, that the $20 was paid to play the games and not pur chase music, and that [Lucky Tunes] violated the gambling laws,” as Lucky Tunes charged the district court with doing. Nor did the district court. Case: 19-40970 Document: 00515402379 Page: 8 Date Filed: 05/01/2020No. 19

- 40970

9 extent that it invoked that clause at all, it has not alleged facts showing how its property w as taken for public use in contravention of a clearly established right. See U.S. C ONST

. amend. V

. Because Lucky Tunes has failed to plead a violation of any constitutional right, much less a clearly established one, the officers are entitled to qualified immunity. See Harlow , 457 U.S. at 818

. Consequently, the claims against Sheriff Smith in his official capacity fail as well. See City of L os Angeles v. Heller , 475 U.S. 796, 799 (1986) (per curiam) (holding that claims for damages based on an officer’s actions in his official capacity fail when there has been “no constitutional injury at the hands of the individual police officer”).

C. State Claims The district court dismissed some of Lucky Tunes’s sta te

- law claims for failure to state a claim and declined to exercise supplemental jurisdiction over the rest

. Supplemental jurisdiction over state

- law claims is proper when they “form part of the same case or controversy” as federal claims over which the d istrict court has original jurisdiction . 28 U.S.C. § 1367 (a) . In other words, the state and federal claims must “derive from a common nucleus of operative fact .” United Mine Workers of Am. v. Gibbs , 383 U.S. 715, 725 (1966) . Even if supplemental jurisd iction is proper, a court may decline to exercise it in light of “ the statutory factors set forth by 28 U.S.C. § 1367(c), and

. . . the common law factors of judicial economy, convenience, fairness, and comity. ” Enochs v. Lampasas Cty

. , 641 F.3d 155, 159 (5th Cir. 2011) (citing Carnegie

- Mellon Univ. v. Cohill , 484 U.S. 343, 350 (1988) (listing the common

- law factors))

. We review decisions of supplemental jurisdiction for abuse of discretion. Priester v. Lowndes Cty. , 354 F.3d 414, 425 (5th Cir. 2004). Lucky Tunes alleged that the officers violated Article I , s ections 9, 13, and 19, of the Texas Constitution. Its s ection 9 claims fail because that Case: 19-40970 Document: 00515402379 Page: 9 Date Filed: 05/01/2020No. 19

- 40970

10 provision “and the Fourth Amendment are the same in all material respects” and Lucky Tunes has not argued or provided authority that it should be interpreted more expansively. See Gates v. Tex

. Dep ’ t of Prot ective & Reg

. Serv s. , 537 F.3 d 404, 437

– 38 (5th Cir. 2008)

. Similarly, s ection 19’s “ due course of law provision provides the same protections as the federal Due Process Clause ,” so these claim s fail as well. See Fleming v. State , 376 S.W.3d 854, 857 (Tex. App.

— Fort Worth 2012), aff ’ d , 455 S.W.3d 577 (Tex. Crim. App. 2014)

. Lucky Tunes failed to state a claim under section 13 by making only a passing reference with no mention of excessive bail or cruel or unusual punishment

. Lucky Tunes also waived this issue by failing to argu e for it on appeal

. See United States v. Martinez , 263 F.3d 436, 438 (5th Cir. 2001)

. We also affirm the dismissal of the requests for injunctive and declaratory relief. Injunctive relief is unavailable on the claims dismissed under Rule 12(b)(6) because of the lack of an underlying cause of action. See Crook v. Galaviz , 616 F. App ’ x 747, 753 (5th Cir. 2015) (per curiam)

. The

requ ests for declaratory judgment that rely on “the United States and Texas constitutions and the laws of Texas” fail for the reasons discussed above. Therefore, we affirm the district court’s dismissal of the foregoing state claims for failure to state a cla im. We also hold that the district court did not abuse its discretion by exercising supplemental jurisdiction over these claims , even though it dismissed the federal claims, because they concern the same facts and similar law as the federal claims , making it more convenient to dispose of them in this action

. See Gibbs , 383 U.S. at 72 6

– 28 ( holding that “if the federal claims are dismissed[,] .

. . the state claims should be dismissed as well , ” but exercising jurisdiction is no netheless proper when state and federal claims are “closely tied” )

. The district court’s final judgment failed to reflect Case: 19-40970 Document: 00515402379 Page: 10 Date Filed: 05/01/2020No. 19

- 40970

11 whether the dismissals were with or without prejudice. The dismissals of these claims, of course, were with prejudice. The final st ate law claims, however, should have been dismissed without prejudice. We hold that the district court did not abuse its discretion by declin ing to exercise supplemental jurisdiction over the remainder of the declaratory

- judgment claims and the Texas conv ersion claim , which involve distinct questions of state law

. See id. Such dismissal s , of course, are without prejudice. 4 See Bass v. Parkwood Hosp. , 180 F.3d 234, 246 (5th Cir. 1999)

. The judgment should be clarified to reflect these different dismissals. Accordingly, w e modify the judgment to make clear that the claims dismissed under Rule 12(b)(6) are dismissed with prejudice and the claims dismissed based on a decision not to exerc ise supplemental jurisdiction , as discussed above, are dismissed without prejudice. AFFIRMED as modified

.

4 T he court made conflicting statements about whether it dismissed Lucky Tunes’s conversion claim for failure to state a claim or declined to exercise supplemental jurisdiction over it. Given that federal courts are courts of limited jurisdiction and that these stat e law claims were distinct from the federal claims and the other state law claims, we construe the order as declining to exercise supplemental jurisdiction, resulting in a dismissal without prejudice of the conversion claim. Case: 19-40970 Document: 00515402379 Page: 11 Date Filed: 05/01/2020