FI L ED U.S. COURT OF APPEAL S EL EVENTH CI RCUI T J ANUARY 25, 2012 J OHN L EY CL ERK [PUBLIS H]

IN THE UN ITED STATES COURT OF APPEALS

FOR THE ELE VENTH CIRCUIT

__ __ __ __ __ __ __ __ __ __ __ __ No. 1 1- 10 79 7

__ __ __ __ __ __ __ __ __ __ __ __ D.C. Dock et No. 1 :1 0- cv -0 04 77 -WK W -WC

THE LO RD ABBETT MUNICIP AL INCOME FUND, INC., a Ma ry la nd co rp or at io n,
Pl ai nt iff -Ap pe ll an t,

ve rs us JOHN M. TYSON, JR., i n h is off ic ia l ca pa ci ty as Sp eci al Pro se cu to r an d C om m an de r of th e Tas k Fo rce o n Il le ga l Gam

bl in g o f th e Gov ern or of Al ab am a, GOVERNOR OF ALABAMA,
Defen da nt s- App el le es

.

__ __ __ __ __ __ __ __ __ __ __ __ App eal fro m

th e Uni te d S ta te s Di st ric t Co ur t fo r th e Mi dd le Dis tri ct of Al ab am a

__ __ __ __ __ __ __ __ __ __ __ __ (J an ua ry 25 , 20 12 )
Befo re DUBINA, Ch ie f Ju dg e, COX, Cir cu it Ju dg e, an d HUNT, Dis tri ct Ju dg e. *

PER CURI AM:

Honora ble Wil lis B. Hunt, J r., United States Distr i ct J u d ge for the Norther n District of * Geor g ia, sitting by

desig nation.The Lord Abb et t Mu ni ci pa l In co m e Fu nd , In c. (th e “ Fu nd ”) own s bo nd s is su ed

by The Co op erat iv e Dis tri ct of Hou st on Co un ty Alab am a-Co un try Cro ss in g Pro ject (“ Co op erat iv e Dis tri ct ”). The Fu nd al le ge s th at Alab am a st at e o f f i c ia ls ha ve 1

i n t e r f ered wit h th e in co m e st ream it ex pe ct ed to rece iv e fro m th es e bo nd s. By no t
affo rd in g th e Fu nd a he ari ng to ch al le ng e th is in te rfer en ce, th e Fu nd cl ai m s a
vi ol at io n of it s Fo ur te en th Am en dm en t pr oc ed ur al du e pr o c e s s r i g ht s. The di st ric t

co ur t di sm is se d th e Fu nd ’s 42 U.S.C. § 19 83 cl ai m fo r in jun ct iv e rel ie f. It ru le d th at
th e Fu nd ’s cla im was no t rip e. And , i t q ue st io ne d wh et he r th e Fu nd ha d Art ic le III

st an di ng to as se rt it s cl ai m

. W e affi rm th e di st ric t co ur t ’s d is m is sa l, th ou gh on
di ffer en t g ro un ds

. I. BACKGROUND
The C o o p erat iv e Dis tri ct is su ed bo nd s to fin an ce a m ix ed -u se de ve lo pm en t

pr ojec t k n o wn as Co un try Cr os si ng

. The se bo nd s were to be pa id , i n pa rt, by fe es 2

le vi ed on el ect ro ni c bi ng o m ach in es op erat ed at Co un try Cro ss in g. Afte r C ou nt ry
Cro ss in g op en ed , th es e el ect ro ni c bi ng o m ach in es cam e to th e at te nt io n of Alab am a’s

The Fund filed suit ag ainst former Alabama Gover nor Robert Riley and Special Prosecutor 1
an d C o m m an d er of the Task For ce on I lleg al Gambling , J ohn M. Ty son, J r., in their official cap ac i t i es

. Under Fe d. R. App. P. 43(c) (2) curr ent Alabama Gover nor, Robert Be ntley , was automatically s u b stitut ed for Gover nor Riley at the end of Gover nor Riley ’s term. The Fund has moved to substitut e curr ent Alabama Attorney Gene ral L uther Strang e for Ty son beca use Gover

nor Be ntley disbanded the Ta sk Forc e on I lleg al Gambling . We gr ant this moti on to substit ute. We relay

the fa cts as they

appea r in the F und’s complaint. 2

2Task Fo rce on Ill eg al Gam bl in g (th e “ Task Fo rce” ). Jo hn Ty so n, th e Task Fo rce’s

Co m m an de r, th reat en ed to se iz e th e el ect ro ni c bi ng o m ach in es an d pl an ne d a rai d to

ta ke th e m ach in es be cau se th ey vi ol at ed Alab am a’s an ti -g am bl in g la ws. In res po ns e,
Co un try Cros si ng clo se d i ts do or s t o p rev en t s ei zu re o f th e m ach in es

. The Fu nd ’s co m

pl ai nt st at es th at it ha s a pr op ert y in te res t in th e bo nd s an d th e

rev en ue st ream fu nd in g th e bo nd s. It as se rts th at th e Alab am a st at e of fi c i al s’

in te rfer en ce wit h th e op erat io n of th e bi ng o m ach in es ha s de pr iv ed it of th is pr op ert y
in te res t. Bec au se th e Fu nd ha s no t been gi ve n an op po rtu ni ty to ch al le ng e th e st at e
of fic ia ls ’ in te rfer en ce wit h th e m ach in es , th e Fu nd co nt en ds a pr oc ed ur al du e pr oc es s
vi ol at io n ha s oc cu rred

. The Co m pl ai nt se ek s in

jun ct iv e rel ie f un de r 42 U.S.C. § 19 83

an d req ue st s a he ari ng to de ci de th e le ga li ty of th e el ect ro ni c bi ng o m ach in es un de r

st at e la w. The Defen da nt s m ov ed to di sm is s th is cl ai m fo r la ck of juri sd ic ti on ba se d

on Fed

. R

. C i v
. P

. 1 2 (b )(1 ) an d fo r fai lu re to st at e a cl ai m un de r Fed

. R. Ci v. P.

12 (b )(6 ). The di st ric t co ur t gr an te d th e m ot io n to di sm is s on Ru le 12 (b )(1 ) gr ou nd s

as an un rip e cl ai m

. 3

The district court also dismiss ed two additional counts in the Fund’ s complaint. Count I I 3 soug ht injunctive relief to preve nt interfe renc e with the opera tion of the bingo machines and Count I I I reque sted a judgment declaring that the m achine s could be leg ally opera ted. The d i s trict court dismiss ed Counts I I and I I I as b arred by the state’s sovere ign immunit y under the Eleventh Amendment. The Fund doe s not challeng e the dismissal of these c ounts on this appeal.
3On ap pe al , th e Fu nd pr es en ts th ree arg um en ts in su pp or t of it s po si ti on th at th e

di st ric t cou rt erred by di sm is si ng it s case

. Fi rs t, the Fu nd reject s th e di st ric t cou rt’s rip en es s an al y si s by arg ui ng th at th e Su pr em e Co ur t’s de ci si on in Ex Par te Y ou ng , 20 9 U.S. 12 3, 28 S. Ct

. 44 1 (1 90 8) , co nt ro ls

. Seco nd , it arg ue s th at th e di st ric t co ur t

erre d in it s st an di ng an al y si s by ov erl oo ki ng th e go ve rn men t c o e r ci on th at fo rced

Co un try Cro ss in g to cl os e. In th e al te rn at iv e, th e Fu nd co nt en ds it sh ou ld be gr an te d
le av e to am en d i ts co m

pl ai nt to all eg e why Cou nt ry Cro ss in g c lo se d.

II. STANDARD OF REVIEW

“ A di st ric t co ur t’s de ci si on to gr an t a mo t i o n t o di sm is s fo r la ck of su bjec t

m at te r juri sd ic ti on pu rs ua nt to Ru le 12 (b )(1 ) is a qu es ti on of la w we rev ie w de no vo .”

S i n al tr ai na l v. Co ca -Co la Co

. , 57 8 F.3 d 12 52 , 12 60 (1 1t h Ci r. 20 09 ) (ci ti ng
McElm urr ay v. Co ns ol

. Gov ’t of Aug us ta -Ric hmo nd Cn ty

. , 50 1 F.3 d 12 44 , 12 50 (1 1t h
Ci r. 20 07 )). Lik e th e di st ric t co ur t, we co ns tru e th e Defen da nt s’ at ta ck on th e co ur t’s juri sd ic ti on as a faci al on e. “ Acco rd in gl y , ‘the co ur t m us t co ns id er th e al le ga ti on s in

th e pl ai nt iff ’s co m

pl ai nt as tru e.’” McElmu rr ay , 50 1 F

. 3 d

. at 12 51 (q uo ti ng
W il li ams on v. Tu cker , 64 5 F.2 d 40 4, 41 2 (5 th Ci r

. 1 9 8 1 ) )

. Si m il arl y , th e co ur t

rev ie ws d e n ov o a Ru le 12 (b )(6 ) di sm is sa l fo r fai lu re t o st at e a cl ai m an d c on st ru es
th e fact ua l al le ga ti on s in th e co mp l a i n t i n th e li gh t m os t fav or ab le to th e pl ai nt iff

.

4M

i l l s v. For emo st In s. Co

. , 51 1 F.3 d 13 00 , 13 03 (1 1t h Ci r. 20 08 ) (ci ti ng Ca st ro v

. Se c’y o f Ho mela nd

Se c. , 47 2 F .3d 13 34 , 13 36 (11 th Cir . 20 06 )).

III. DISC USSION
The di st ric t co ur t ru le d t h a t t h e F u n d di d no t al le ge a cl ai m rip e fo r fed eral
ad jud ic at io n. It refu se d t o h ol d t ha t t he st at e o ffi ci al s’ th reat en ed in te rfer en ce wi th

th e el ect ro ni c bi ng o m ach in es am ou nt ed to a de pr iv at io n of th e Fu nd ’s pr op ert y rig ht s. The refo re, th e co ur t ru le d, “ [a]t thi s st ag e, Defen da nt s hav e do ne no th in g to
in vo ke th e Fu nd ’s pr oc ed ur al du e pr oc es s rig ht s.” (Dk t. 32 at 16 .) Th e F un d

co nt en ds it can al le ge a rip e du e pr oc es s cl ai m wit ho ut wait in g fo r th e act ua l se iz ur e
of th e bi ng o m ach in es be cau se th e th reat en ed se iz ur e of th e m ach in es cau se d a

r e d u c t i o n in it s an ti ci pa te d in co m e fro m th e bo nd s. Acco rd in g to th e Fu nd , th es e
th reat s tri gg er a pr oc ed ur al du e pr oc es s ob li ga ti on to pr ov id e th e Fu nd a he ari ng on
th e le ga li ty of th e el ect ro ni c bi ng o eq ui pm en t. The Fu nd rel ie s he av il y on Ex Par te

Y ou ng to su pp or t t hi s cl ai m

. In Y ou ng , th e st at e at to rn ey ge ne ral of Mi nn es ot a ch al le ng ed a co ur t’s de ci si on

to ho ld hi m in co nt em

pt

. 20 9 U.S. at 12 6- 27 , 28 S. Ct

. at 44 3. He qu es ti on ed th e

v al id it y of th e co nt em

pt or de r by arg ui ng th at th e co ur t la ck ed su bjec t m at te r juri s d i c t i on ov er th e un de rlyin g co nt ro ve rs y
. Id

. at 14 3, 28 S. Ct

. at 44 7. In th e

un de rlyin g a ct io n, sh areh ol de rs of a rai lro ad co m pa ny ass ert ed th at rece nt ly pas se d

5st at e la ws lim it in g th e rat es ch arg ed by rai lro ad s wou ld de pr iv e th em of pr op ert y in

vi ol at io n of th e du e pr oc es s cl au se

. Id

. at 13 0, 28 S. Ct

. at 44 4. The Co ur t he ld th at
th e al le ge d un co ns ti tu ti on al it y of th e st at e la ws co ns ti tu te d a fed eral qu es ti on gi vi ng
th e co ur t ju ris di ct io n o ve r th e cas e. Id

. at 1 44 -4 5, 2 8 S . Ct. at 44 7- 48

. The Fu nd arg ue s th at li ke th e sh areh ol de rs in Y ou ng , it is a bo nd ho ld er who se
in ve st m en t is th reat en ed by st at e act io n on th e act iv it y in te nd ed to ge ne rat e a ret ur n

on it s in ve st m en t. It su gg es ts th at un de r Y ou ng th e co ur t ha s juri sd ic ti on to he ar th e

cas e e v e n th ou gh Alab am a of fic ia ls ha ve no t se iz ed th e bi ng o m ach in es

. The
Defen da nt s co nt en d th is go es to o far. The y em ph as iz e th at Y

ou ng ad dr es se d a pa rty’ s rig ht to ch al le ng e th e va li di ty of s t a t e s t a tu te s un de r fed eral co ns ti tu ti on al la w in
fed eral co ur t. It di d no t req ui re, “ St at es to gi ve cri m in al su sp ect s a pr es ei zu re he ari ng
in cir cu m st an ces li ke th es e.” (Ap pe ll ee Br . at 4 2.)

W e ag ree wi th th e Defen da nt s t ha t Y ou ng do es no t req ui re th e st at e to affo rd

th e Fu nd a he ari ng pr io r to an y en fo rcem en t act io n ag ai ns t th e bi ng o m ach in es

. Reg ard le ss of Y

ou ng , we ag ree wit h th e Fu nd th at it s Co m pl ai nt al le ge s a rip e cl ai m

. 4

The district court’s ripene ss analy sis focuse d on the fac t that Alabama officia ls have never 4 seized the elec tronic bingo machines at Country Crossing. Ba sed on this fac t, it conclude d that the Def endants have not de prived the Fund of any proper ty rig hts a nd that any proce dural due proce ss inquiry by the court would be specula tive. Whether the Fund has alleg ed a ripe proce dural due proce ss violation is a complex question. And, a g ood arg ument can be made in support of the district court’s conclusion on ripene ss. After car eful consideration, howeve r, we conclude that the Fund’ s Complaint allege s a ripe § 1983 c laim. To the deg ree that the Fund’ s § 1983 claim alleg es that the actions of state officia ls deprive d
6Tha t do es no t en d ou r in qu iry, ho wev er. In th e di st ric t co ur t, th e Defen da nt s m ov ed

to di sm is s th e Fu nd ’s § 19 83 cl ai m fo r fai lu re to st at e a cl ai m an d la ck of juri sd ic ti on

. (Dk t. 13 at 8 & 10 .) In th e Fu nd ’s res po ns e to th e Defen da nt s’ m ot io n, it add res se d
bo th of th es e gr ou nd s fo r di sm is sa l. (Dk t. 18 pa ss im ) W hi le th e di st ric t co ur t di d no t

reac h th e Defen da nt s’ 12 (b )(6 ) m ot io n fo r fai lu re to st at e a cl ai m , we m ay affi rm th e
di st ric t co ur t’s di sm is sa l on an y gr ou nd fo un d in th e reco rd

. Pos ne r v. Ess ex In s. Co ., Lt d. , 17 8 F.3 d 12 09 , 12 18 n.1 1 (1 1t h Ci r. 19 99 ) (ci ti ng Pow er s v. Uni te d St at es , 99 6

F.2 d 11 21 , 11 23 -2 4 (1 1t h Ci r. 1 9 9 3) ); se e al so Pit t Cn ty

. v. Hot el

s.co m, L.P. , 55 3

F.3 d 30 8, 31 5 (4 t h Ci r. 20 09 ) (d is ag reei ng wit h di st ric t co ur t’s de te rm in at io n th at pl ai nt iff la ck ed st an di ng bu t affi rm in g di sm is sa l of co m pl ai nt on gr ou nd th at it fai le d

to st at e a cl ai m up on whi ch rel ie f c a n be gr an te d) , Gemte l Co rp

. v. Cmty

. Red evel op men t Age nc

y of Ci ty of

L.A. , 23 F.3 d 15 42 , 15 46 (9 th Ci r. 19 94 ) (aff irming
di sm is sa l of act io n fo r fai lu re to st at e a cl ai m aft er reject i n g di st ric t co ur t’s

co nc lu si on cas e sh ou ld be di sm is se d on rip en es s an d m oo tn es s gr ou nd s)

. W e affi rm

it of its proper

ty interes t i n t h e i n co m e it expected to rec eive from the bonds, the Fund has been deprive d of that income and the state aff ords the Fund no venue to redr ess that depriva tion. I f these fac ts alleg ed a cog nizable due proce ss violation, the claim would be ripe. There fore ripene ss is not the prope r g round for

dismiss al of the F und’s § 1983 proc edura l due proc ess claim. The district court never definitively rul ed whether the Fund had Article I I I standing

. Construing the fac ts contained in the Fund’s complaint as t rue and draw ing rea sonable inferenc es in its favor , we conclude the Fund has adequatel y p l ed Article I I I standing

. The Com plaint states
an Article I I I injury , cause d by the Def endants’ conduct, that would be redr essed if the Fund rec eived the re lief it seeks.
7th e di st ric t co ur t’s di sm is sa l be cau se th e Co m pl ai nt fai ls to st at e a cl ai m up on whi ch
rel ie f can be gra nt ed

.

“ To su rv iv e a m ot io n to di sm is s, a c o m pl ai nt m us t co nt ai n su ffi ci en t fact ua l

m at te r, acce pt ed as tru e, to ‘stat e a cl ai m to rel ie f th at is pl au si b l e o n i t s f a ce.’”
Ash cr of t v. Iq ba l , 55 6 U.S. 66 2,

__ _, 12 9 S. Ct

. 19 37 , 19 49 (2 00 9) (q uo ti ng Bell Atl

. Co rp

. v. Two mbl

y , 55 0 U.S. 54 4, 57 0, 12 7 S. Ct

. 19 55 , 19 74 (2 00 7) ). W e are no t

req ui red to acce pt as tru e th e Fu nd ’s le ga l co nc lu si on th at a Fo ur te en th Am en dm en t
vi ol at io n oc cu rred

. Edw ar ds v

. Pr i me, In c. , 6 02 F.3 d 12 76 , 1 29 1 (1 1t h Ci r. 20 10 ).

In or de r to st at e a pr oc ed ur al du e pr oc es s cl ai m un de r § 19 83 , th e Fu nd ha d to al le ge

a co ns ti tu ti on al ly in ad eq ua te pr oc es s. Se e Gra yd en v. Rho de s , 34 5 F.3 d 12 25 , 12 32 (1 1t h Ci r. 20 03 ) (“ In th is ci rcu it , a § 19 83 cl ai m al le gi ng a de ni al of pr oc ed ur al du e

pr oc es s req ui res pr oo f of

. . . co ns ti tu ti on al ly-in ad eq ua te pr oc es s.” (ci ti ng Cr yd er v.
Oxen di ne , 24 F.3 d 17 5, 17 7 (1 1t h Ci r. 1 9 9 4) )). Bec au se th e fact s as pl ed in th e
Fu nd ’s Complai nt do no t al le ge a du e p ro ces s v io la ti on , th e co m pl ai nt fai ls to st at e
a cl ai m for whi ch rel ie f can be gra nt ed an d s ho ul d b e d is m is se d.

Ex pa rt e Y

ou ng pr ov id es no refu ge fo r th e Fu nd

. In Y ou ng , th e Co ur t fo un d juri sd ic ti on whe re a pa rty ch al le ng ed a st at e st at ut e as un co ns ti tu ti on al ev en th ou gh

th e st at e ha d y et to en fo rce th e st at ut e. The Fu nd m ak es no si m il ar ch arg e reg ard in g
A l a b a ma’ s la ws in th is cas e be cau se a ba n on el ect ro ni c bi ng o m ach in es do es no t

8vi ol at e fed eral la w. The Fu nd ci te s no cas e th at in te rp ret s Ex Par te Y ou ng as en ti tl in g
it to a pr es ei zu re he ari ng in ci rcu m st an ces li ke th es e. In fact , cas e la w an d co m m on

se ns e co un se l ag ai ns t a du e pr oc es s req ui rem en t fo r a pr es ei zu re he ari ng un de r th es e
ci rcu m st an ces

. Th e g ov ern m en t’s se iz ur e of su sp ect ed co nt rab an d wou ld gr in d to a ha lt i f

ev ery en ti ty th at ha d an eco no m ic in te res t in th e ta rg et ed pr op ert y was owe d a he ari ng
be fo re the go ve rn m en t co ul d la wfu ll y se iz e th e pr op ert y
. The du e pr oc es s clau se is

no t to th e co nt rary. W hi le th e du e pr oc es s cl au se or di na ril y req ui re s p r e se iz ur e

pr oc es s, in Ca le ro -To le do v. Pea rs on Y ac ht Lea si ng Co

. , 41 6 U.S. 66 3, 94 S. Ct

. 20 80 (1 97 4) , th e Su pr em e Co ur t ag reed “ th at se iz ur e fo r pu rp os es of fo rfei tu re is on e
of tho se ‘ “ ex tra or di na ry si tu at io ns ” th at jus ti fy po st po ni ng no ti ce an d op po rtu ni ty fo r

a he ari ng .’ ” Id

. at 67 7, 94 S. Ct

. at 20 88 (q uo ti ng Fue nt es v. Sh evi n , 40 7 U.S. 67 , 92 S. Ct

. 19 83 , 19 99 (1 97 2) ). Giv en th at th e Su pr em e Co ur t di d no t affo rd th e ow ne r
of pr op ert y ac tu al ly se iz ed a pr es ei zu re he ari ng , we ha ve no tro ub le co nc lu di ng th at
th e du e pr oc es s cl au se do e s no t affo rd an en ti ty wit ho ut an own ers hi p in te res t a
he ari ng in th e face of th reat en ed se iz ur e. Si m pl y pu t, th e du e pr oc es s cl au se do es no t

req ui re st at es to affo rd th os e who se ek to pr of it fro m po te nt ia ll y cri m in al en te rp ris es

a he ari ng to es ta bl is h th e le ga li ty of th e en te rp ris e be fo re st at e of fic ers ha ve be gu n

9a pr os ecu ti on or fo rfei tu re act io n. Thu s, th e Fu nd ha s fai le d to st at e a cl ai m fo r whi ch

rel ie f sh ou ld be gra nt ed

. W e al so reject th e Fu nd ’s arg um en t th at th e di st ric t cou rt erre d by di sm is si ng
i t s co m pl ai nt wit ho ut gr an ti ng it le av e to am en d. The Fu nd ’s req ue st fo r le av e to

am en d ap pe ared in it s res po ns e to th e Defen da nt s’ m ot io n to di sm is s

. The Fu nd
fai le d, ho wev er, to at ta ch a co py of th is pr op os ed am en dm en t o r se t fo rth it s

su bs ta nc e. Th eref

or e, th e di st ric t co ur t di d no t err by de nyin g th e Fu nd ’s req ue st

. Se e Uni te d St at es ex re l. Atki n s v

. M c I nt eer , 47 0 F.3 d 13 50 , 13 62 (1 1t h Ci r. 20 06 ) (ci ti ng Lo ng

v. Sa tz , 18 1 F .3d 12 75 , 12 79 (11 th Cir . 19 99 )).

IV. CONCLUSION

W e de ny th e Defen da nt s’ pe nd in g m ot io n to di sm is s th e ap pe al as m oo t in li gh t
of th is op in io n. W e gr an t th e Fu nd ’s m ot io n to su bs ti tu te

. W e m od ify th e jud gm en t 5

of th e di st ric t co ur t to de cl are th at Co un t I of th e Fu nd ’s Co m pl ai nt is di sm is se d wit h

pr ejud ic e u nd er Ru le 12 (b )(6 ) an d a ffi rm th e jud gm en t as m od ifi ed

. AFFIR MED.

The Def endants’ moved to dismiss the appea l as moot beca use Gover

nor Be ntley 5 disbanded the Ta sk Forc e.
10