## F I L E D United States Court of Appeals Tenth Circuit 

### August 22, 2005 

### PATRICK FISHER Clerk PUBLISH UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

DAVID A. PEREZ, SR.; TONY B. VIGIL; HAROLD PORTER; and JAMES D. PORTER, Plaintiffs-Appellees,

v. No. 04-2181 T. GLENN ELLINGTON; JAMES BURLESON; DAVID FERGESON; RICKY A. BEJARANO; and JAVIER LOPEZ, in their individual capacities, Defendants-Appellants,

--------------------------------------------- TOM TALACHE, Governor of Nambe Pueblo; HERBERT YATES, Tribal Councilman of Nambe Pueblo; TAXATION & REVENUE DEPARTMENT, STATE OF NEW MEXICO,
Movants.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW MEXICO (D.C. No. CIV-03-361 JP/LFG)
John B. Pound of Long, Pound & Komer, P.A., Santa F e, New Mexico, for Defendants-Appellants.-2-

Daniel Yohalem (Richard Rosenstock with him on the brief), Santa Fe, New Mexico, for Plaintiffs-Appellees.

Before BRISCOE, McKAY , and MURPHY , Circuit Judges.

McKAY , Circuit Judge.

This is an appeal from the district court’s denial of summary judgment based on a claim of qualified immunity and absolute immunity. DefendantsAppellants are officials from the New Mexico Tax an d Revenue Department (TRD). The underlying facts surrounding this lawsu it are detailed and quite involved. In light of the narrow issues presented by this appeal, we only recite the facts relevant to our holding. Plaintiffs, a faction of the Nambé Pueblo Indian Tr ibe, entered into a contract with Mr. Ken Newton (acting for Gasplus, h is gasoline distribution corporation) regarding the management of Nambé Pueb lo’s gasoline distribution business (Gasplus agreement). Plaintiffs entered i nto the Gasplus agreement on behalf of the Nambé Pueblo Development Corporation (NPDC). The NPDC is a registered gas distributor and can take advantage o f the gas tax deduction for1 N. M. Stat. Ann. § 7-13-4(F) (Michie 2004) states that

[the following] gasoline may be deducted from the t otal amount of gasoline received in New Mexico during the tax peri od: gasoline received in New Mexico and sold by a regis tered Indian tribal distributor from a nonmobile storage contain er located within that distributor’s Indian reservation, pueblo grantor trust land for resale outside that distributor’s Indian reservatio n, pueblo grant or trust land; provided the department certifies that the distributor claiming the deduction sold no less than one millio n gallons of gasoline from a nonmobile storage container located within that distributor’s Indian reservation, pueblo grant or trust land for resale outside that distributor’s Indian reservation, pueb lo grant or trust land during the period of May through August 1998; and provided further that the amount of gasoline deducted by a r egistered Indian tribal distributor pursuant to this subsection shal l not exceed two million five hundred thousand gallons per month, ca lculated as a monthly average during the calendar year . . . .

2 Governor Talache is part of a political faction wit hin Nambé Pueblo opposed to Plaintiffs’ faction and was upset with the Gasplus agreement, an agreement in which he took no part. -3- Indian tribal distributors in the state of New Mexi co. 1 Mr. Newton had previously been investigated by TRD officials for his involvem ent with a fraudulent tax scheme designed to illegally take advantage of such tax breaks. Defendants, officials from the TRD, were contacted by Nambé Pueblo’s
governor, 2 Tom Talache (Governor Talache), numerous times reg arding the Gasplus arrangement. In a series of clandestine me etings, Governor Talache voiced his concern to TRD officials about the valid ity of the Gasplus agreement. After hearing Governor Talache’s accounts of Plaint iffs’ involvement with Mr.3 Defendant Ellington, a TRD official, allegedly knew of the factional

animosity within the Nambé Pueblo between Governor Talache and the previous tribal administration which included the Plaintiffs

. -4- Newton and Gasplus, Defendants decided to investigate the matter. 3 Fearing that a traditional investigation of the nat ion would prove difficult because of tribal sovereign immunity protections, D efendants decided to issue a jeopardy tax assessment against Plaintiffs. A jeop ardy tax assessment is a method used by New Mexico tax officials in emergency situations when an official “reasonably believes that the collection of any taxfor which a taxpayer is liable will be jeopardized by delay . . . .” N.M. Stat. A nn. § 7-1-59(A) (Michie 2004). Such jeopardy tax assessments give tax officials gr eater latitude to investigate potential tax offenders. In this case, by issuing the jeopardy tax assessments, Defendants were able to obtain access to Plaintiffs ’ financial records. Defendants’ decision to issue the jeopardy tax asse ssments was buttressed by an opinion from the Bureau of Indian Affairs (BI A) that found the Gasplus agreement invalid. After some preliminary investig ation, Defendant Fergeson agreed with the BIA’s conclusion regarding the inva lidity of the Gasplus agreement, and he reported this to Defendant Elling ton who, in turn, issued a lien against Plaintiffs’ property pursuant to the New Me xico Tax Administration Act. Upon completion of its audit, however, Defendants d etermined that there was nothing illegal about Plaintiffs’ agreement wit h Gasplus. Consequently, TRD4 Typically, the tax liens associated with the jeopar dy assessments are

released at the same time as the jeopardy assessmen t abatement. -5- recommended an abatement of the jeopardy tax assess ments. The abatements were signed on March 11, 2002, by a TRD official an d authorized a month later. However, the liens associated with the tax assessme nts were not released until July 1, 2003, more than one year later. 4 As a result of the above, Plaintiffs brought variou s claims under 42 U.S.C. §§ 1981, 1982, and 1983. Defendants asserted the d efense of qualified and absolute immunity and moved for summary judgment oneach of the claims. The district court granted summary judgment for Defendants on all of Plaintiffs’ claims except their § 1983 claim based on the FirstAmendment right of association. The district court held there to be “ a question of material fact as to whether the Defendants acted in an objectively reas onable manner,” Aplt. App., Vol. I, at 413 (Dist. Ct. Order), from which a reas onable juror could find a deprivation of constitutionally protected rights byretaliating against Plaintiffs for their association with Mr. Newton. The district co urt also denied Defendants’ claim of absolute immunity. Defendants brought thi s interlocutory appeal from the denial of summary judgment on that claim. Generally, we have jurisdiction to review purely le gal questions that arise from the denial of qualified immunity. See Mitchell v. Forsyth , 472 U.S. 511, 528-6-

(1985). Our inquiry focuses on “whether the facts alleged . . . support a claim of a violation of clearly established law.” Id. at 528 n.9. If our de novo review of Plaintiffs’ version of the facts reveals that they do not amount to a violation of a clearly established right, we can reverse on an int erlocutory basis. Conversely, if Plaintiffs’ version of the facts amounts to the vio lation of a clearly established constitutional right, we lack jurisdiction to revie w the denial of summary judgment on an interlocutory basis if Plaintiffs’ v ersion of the facts is disputed. We review de novo a district court’s denial of a summary judgment mot ion raising qualified immunity questions. Medina v. Cram , 252 F.3d 1124, 1128 (10th Cir. 2001). It is first necessary to determine exactly which cl early established constitutional right Plaintiffs claim Defendants vi olated. In this appeal, Plaintiffs allege Defendants’ retaliatory actions violated the ir First Amendment right to association. The First Amendment bars retaliation for exercising the right of association. See DeLoach v. Bevers , 922 F.2d 618, 620 (10th Cir. 1990). Although retaliation is not expressly discussed in the First Amendment, it may be actionable inasmuch as governmental retaliation ten ds to chill citizens’ exercise of their constitutional rights. ACLU of Md., Inc. v. Wicomico County , 999 F.2d 780, 785 (4th Cir. 1993) (citing Perry v. Sindermann , 408 U.S. 593, 597 (1972)). First Amendment retaliation claims are generally br ought in the public-7-

employment context. Connick v. Myers , 461 U.S. 138 (1983); Pickering v. Bd. of Educ. , 391 U.S. 563 (1968). In this case, Plaintiffs are not employed by Defend ants, and no contractual relationship exists between the parties. When the retaliation claim is not grounded in the public employment context, we emplo y the substantive standard we announced in Worrell v. Henry , 219 F.3d 1197 (10th Cir.2000). Therefore, to establish a violation of the First Amendment right to associate, Plaintiffs must demonstrate: “(1) that [they were] engaged in cons titutionally protected activity; (2) that [Defendants’] actions caused [Plaintiffs] to suffer an injury that would chill a person of ordinary firmness from continuing to engage in that activity; and (3) that [Defendants’] adverse action was substanti ally motivated as a response to [Plaintiffs’] exercise of constitutionally protecte d conduct.” Worrell, 219 F.3d at 1212 (internal quotation marks and citations omitte d). In this case, Plaintiffs have alleged that they wer e unconstitutionally discouraged from associating with non-tribal member s because of Defendants’ retaliatory action. Plaintiffs support this allegation citing Defendants’ quick issuance of the jeopardy tax assessments, Defendant s’ failure to follow the normal procedures for issuing jeopardy tax assessments, an d Defendants’ failure to timely5 Plaintiffs claim to have experienced various proble ms with their credit

because of the liens. -8- release the liens after their abatement. 5 Assuming the factual allegations above are true, itis necessary to determine whether the law is so clearly established that unde r such circumstances persons of “ordinary firmness” would be deterred from associat ing. Or, in other words, whether the type of conduct above is so egregious that an official would be on clear notice that his actions would deter the ordin ary person from continuing in that association. From the facts of this case, we hold that a reasonable factfinder could conclude that Defendants caused Plaintiffs an injury sufficient to meet that standard; Defendants’ quick decision to issue jeopardy tax assessments against Plaintiffs could, if ultimately found by the jury t o be the case, chill a reasonable person from associating with an outside distributorwho, as the facts of this case show, happened to be at odds with Defendants. See Mimics, Inc. v. Village of Angel Fire , 394 F.3d 836, 847 (10th Cir. 2005). As to the third element of Plaintiffs’ First Amendm ent retaliation claim, Defendants’ extreme delay in releasing the liens on Plaintiffs’ property evidences a retaliatory motive. See DeLoach , 922 F.2d at 620 (“An act taken in retaliation for the exercise of a constitutionally protected ri ght is actionable under § 1983 even if the act, when taken for a different reason, would have been proper.”)-9-

(citation omitted). We conclude that “the facts alleged . . . support aclaim of a violation of clearly established [First Amendment right to assoc iate] law.” See Mitchell , 472 U.S. at 528 n.9. We point out that Defendants may be able to rebut Plaintiffs’ allegations at trial. Defendants may be able to co nvince the trier of fact that their actions were all based on a good faith belief that Plaintiffs were involved in an illegal agreement with Gasplus and that Defendants’ extreme time lapse in releasing the liens after the agreement was determi ned to be legal was purely a result of Defendants’ negligence. However, because the record contains evidence from which a factfinder could conclude that Plainti ffs have established a violation of clearly established law, the district court did not err in denying Defendants’ motion for summary judgment as to Plaintiffs’ FirstAmendment claim. Defendants also appeal the district court’s ruling that they are not entitled to absolute immunity. Defendants ask to be treated like prosecutors because of the unique nature of their positions as tax assessm ent officials and to find them absolutely immune from suit. Aplt. Br. at 28. We find this argument to be without merit, and affirm the district court’s ruli ng. We review determinations of absolute immunity de novo

. Scott v. Hern , 216 F.3d 897, 908 (10th Cir. 2000). State official s are absolutely immune from suit if they “perform functions analogous to those of a prosecutor in initiating and-10-

pursuing civil and administrative enforcement proce edings.” Pfeiffer v. Hartford
Fire Ins. Co. , 929 F.2d 1484, 1490 (10th Cir. 1991) (quotation o mitted). Absolute immunity does not extend to actions “that are primarily investigative or administrative in nature” but, instead, attaches on ly to actions which a prosecutor must perform while fulfilling his duty as an office r of the court. Id. (quotation omitted). We apply a functional approach to determine whetherabsolute immunity applies to a defendant. This approach requires us to examine “the nature of the function performed, not the identity of the actor w ho performed it.” Malik v. Arapahoe County Dept. of Social Services , 191 F.3d 1306, 1314 (10th Cir. 1999) (quotation omitted). “The more distant a function is from the judicial process, the less likely absolute immunity will attach.” Snell v. Tunnell , 920 F.2d 673, 687 (10th Cir. 1990). The state official claiming abso lute immunity has the burden of showing why absolute immunity should apply instead of the more common qualified immunity. Forrester v. White , 484 U.S. 219, 224 (1988). As a general proposition, state officials, like Def endants acting in a merely investigatory capacity, are not entitled to absolut e immunity. See Buckley v.
Fitzsimmons , 509 U.S. 259, 273 (1993) (“A prosecutor’s adminis trative duties and those investigatory functions that do not relate to an advocate’s preparation for the initiation of a prosecution or for judicial pro ceedings are not entitled to-11-

absolute immunity.”). Applying the law regarding d eterminations of absolute immunity to the facts of this case, we agree with t he district court’s opinion on this point. The district court’s denial of summary judgment reg arding Plaintiffs’ First Amendment right of association claim is hereby AFFIRMED . The district court’s denial of absolute immunity is also AFFIRMED

.