Court Opinion

ID: 3190921
Source: CourtListenerOpinion
Date Created: 2016-04-02 00:00:56.075257+00
Date Added: 2024-06-11T14:35:48.712411
License: Public Domain

Case: 15-50832      Document: 00513448481         Page: 1    Date Filed: 04/01/2016

           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT
                                                                          United States Court of Appeals
                                                                                   Fifth Circuit

                                                                                 FILED
                                    No. 15-50832                              April 1, 2016
                                  Summary Calendar
                                                                            Lyle W. Cayce
                                                                                 Clerk
LOUIS V. DOSS, doing business as Mulligan’s Pub; CAROLYN DOSS,
Individually and doing business as Mulligan’s Pub,

              Plaintiffs - Appellants

v.

SERGEANT MARTIN MORRIS; OFFICER HARRY HOLT,

              Defendants - Appellees

                   Appeal from the United States District Court
                        for the Western District of Texas
                             USDC No. 5:11-CV-116

Before KING, CLEMENT, and OWEN, Circuit Judges.
PER CURIAM:*
       Pro se Plaintiffs–Appellants Louis V. Doss and Carolyn S. Doss filed the
instant suit under 42 U.S.C. §§ 1981 and 1983, alleging that Defendants–
Appellees Sergeant Martin Morris and Officer Harry Holt violated their
substantive due process rights under the Fourteenth Amendment. Defendants
moved for summary judgment on Plaintiffs’ claims, raising the defense of

       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
     Case: 15-50832       Document: 00513448481          Page: 2     Date Filed: 04/01/2016

                                       No. 15-50832
qualified immunity. A magistrate judge recommended that the motion for
summary judgment be denied, but the district court vacated the memorandum
and recommendation and granted Defendants’ motion. Plaintiffs appeal. For
the following reasons, we AFFIRM the judgment of the district court.
             I. FACTUAL AND PROCEDURAL BACKGROUND
       Pro se Plaintiffs–Appellants Louis V. Doss and Carolyn S. Doss
(Plaintiffs) filed suit against the City of Kerrville, Texas, and various Kerrville
police officials on February 9, 2011, seeking damages pursuant to 42 U.S.C.
§§ 1981 and 1983. In Plaintiffs’ Third Amended Complaint, they alleged that
Defendants–Appellants Sergeant Martin Morris and Officer Harry Holt
(Defendants) deprived them of their liberty right to own and operate a lawful
business, as well as their property right in their business, in violation of the
Due Process Clause of the Fourteenth Amendment. In particular, Plaintiffs
claimed that Defendants had conspired to shut down Plaintiffs’ legal business,
Mulligan’s Pub, by harassing the business and its patrons. 1
       On November 30, 2012, Defendants moved for summary judgment. In
their motion, Defendants raised the defense of qualified immunity and argued
that Plaintiffs failed to show a conspiracy to harass Mulligan’s Pub or that any
alleged harassment had an effect on the establishment’s revenue. In response,
Plaintiffs argued that their liberty interest to run their business without law
enforcement interference was clearly established by a previous Fifth Circuit
case, San Jacinto Sav. & Loan v. Kacal, 928 F.2d 697 (5th Cir. 1991) (per
curiam), and disputed that the evidence did not support their claims.

       1Plaintiffs also alleged in the complaint that the City of Kerrville had participated in
the conspiracy and alleged Fourth and Fourteenth Amendment claims against Scott
Helpenstell, an agent of the Texas Alcoholic Beverage Commission. The claim against the
City has since been dismissed, and the claim against Helpenstell is not before this court on
appeal.
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       On January 16, 2013, the magistrate judge recommended that
Defendants’ motion be denied because there was a factual issue of whether
Defendants were harassing Mulligan’s customers. In addition, the magistrate
judge concluded that Kacal clearly established Plaintiffs’ liberty interest in
operating a business free from government interference and their property
interest in lost profits.      On May 15, 2013, the district court vacated the
magistrate judge’s report and recommendation and granted Defendants’
motion for summary judgment. The district court held that Plaintiffs could not
succeed on their substantive due process claims under the Fourteenth
Amendment and that Defendants were entitled to qualified immunity. As to
the deprivation of Plaintiffs’ property interest, the court stated that Plaintiffs
never pleaded a property interest in lost profits and that such an interest was
not clearly established in any event. With respect to Plaintiffs’ liberty interest
in operating their business, the district court held that Plaintiffs failed to show
that they were effectively foreclosed from operating their business and
therefore failed to show the violation of a constitutional right. The district
court subsequently granted Defendants’ Rule 54(b) motion for final judgment.
Plaintiffs timely appealed, arguing that the district court erred in granting
Defendants motion for summary judgment on qualified immunity grounds. 2
                           II. STANDARD OF REVIEW
       We review a grant of summary judgment de novo, applying the same
standard as the district court. Rogers v. Bromac Title Servs., L.L.C., 755 F.3d
347, 350 (5th Cir. 2014). Summary judgment is proper “if the movant shows
that there is no genuine dispute as to any material fact and the movant is

       2On appeal, Plaintiffs also argue that they sufficiently demonstrated that Defendants
conspired to shut down Mulligan’s Pub. Because the district court declined to rule on this
issue and because we affirm on other grounds reached by the district court, we decline to
address this argument.
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entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A genuine
dispute of material fact exists “if the evidence is such that a reasonable jury
could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986). However, “[a] mere scintilla of evidence will not
preclude granting of a motion for summary judgment.” Schaefer v. Gulf Coast
Reg’l Blood Ctr., 10 F.3d 327, 330 (5th Cir. 1994) (per curiam). “We construe
all facts and inferences in the light most favorable to the nonmoving party
when reviewing grants of motions for summary judgment.” Dillon v. Rogers,
596 F.3d 260, 266 (5th Cir. 2010) (quoting Murray v. Earle, 405 F.3d 278, 284
(5th Cir. 2005)).
   III. DEFENDANTS ARE ENTITLED TO QUALIFIED IMMUNITY
      The district court did not err when it granted summary judgment to
Defendants on qualified immunity grounds.        “Qualified immunity protects
officers from suit unless their conduct violates a clearly established
constitutional right.” Mace v. City of Palestine, 333 F.3d 621, 623 (5th Cir.
2003). “In resolving questions of qualified immunity at summary judgment,
[we] engage in a two-pronged inquiry.” Tolan v. Cotton, 134 S. Ct. 1861, 1865
(2014) (per curiam). Under this inquiry, “[t]he plaintiff has the burden of
demonstrating that the defendant official is not entitled to qualified
immunity.” Vincent v. City of Sulphur, 805 F.3d 543, 547 (5th Cir. 2015). And
courts may “exercise their sound discretion in deciding which of the two prongs
of the qualified immunity analysis should be addressed first in light of the
circumstances in the particular case at hand.” Pearson v. Callahan, 555 U.S.
223, 236 (2009).
      On the first prong, we “determine ‘whether the facts alleged, taken in
the light most favorable to the party asserting the injury, show that the
officer’s conduct violated a constitutional right.’”   Mace, 333 F.3d at 623
(quoting Price v. Roark, 256 F.3d 364, 369 (5th Cir. 2001)). To satisfy the first
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prong, a plaintiff must “allege ‘the deprivation of an actual constitutional [or
statutory] right.’” Hampton v. Oktibbeha Cty. Sheriff Dep’t, 480 F.3d 358, 363
(5th Cir. 2007) (quoting Felton v. Polles, 315 F.3d 470, 477 (5th Cir. 2002)).
And on the second prong, we “consider whether the [officer]’s actions were
objectively unreasonable in light of clearly established law at the time of the
conduct in question.” Freeman v. Gore, 483 F.3d 404, 411 (5th Cir. 2007). To
satisfy the second prong, a plaintiff must show that the “right is one that is
‘sufficiently clear that every reasonable official would have understood that
what he is doing violates that right.’” Mullenix v. Luna, 136 S. Ct. 305, 308
(2015) (per curiam) (quoting Reichle v. Howards, 132 S. Ct. 2088, 2093 (2012)).
Thus, the second prong “do[es] not require a case directly on point, but existing
precedent must have placed the statutory or constitutional question beyond
debate.” Ashcroft v. al–Kidd, 563 U.S. 731, 741 (2011).
      The district court did not err when it held that Defendants were entitled
to qualified immunity on Plaintiffs’ claim that Defendants deprived them of a
property interest. As the district court correctly concluded, Plaintiffs failed to
establish that Defendants violated a constitutionally protected property right.
We have held that “[i]n order to establish either a substantive or a procedural
due process violation by claiming denial of a property right, [a plaintiff] must
first establish a denial of a constitutionally protected property right.” Bryan
v. City of Madison, 213 F.3d 267, 274 (5th Cir. 2000). But “[s]uch a showing
. . . must be made by reference to state law.” Id. at 275. And Plaintiffs failed
to reference any state law basis for their property interest in either their
complaint or in their response to Defendants’ motion for summary judgment.
      Instead, in their response to the motion, Plaintiffs asserted for the first
time that they had a property interest in lost anticipated profits from their
business as a result of government interference. As the district court correctly
concluded, even if Plaintiffs’ complaint had alleged such a constitutionally
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                                    No. 15-50832
protected property right, it was not clearly established. Pointing to the Kacal
decision,    Plaintiffs   argue   that   the   Fifth     Circuit    has   recognized    a
constitutionally protected property right in lost profits. However, Kacal and a
later Fifth Circuit case demonstrate that this right is not clearly established.
        In Kacal, the plaintiff alleged that she had been deprived of her liberty
interest in operating a business and of her property interest in profits when a
city and its police officers harassed her business, which effectively forced the
business to cease operations. Kacal, 928 F.2d at 699. The district court there
found no constitutional deprivation, but this court reversed, finding that the
plaintiff’s “property interest in the profits of her business and her liberty
interest in operating her business [rose] to the level of protectable interests.”
Id. at 704. However, in discussing the plaintiff’s lost profits, this court also
suggested that lost profits were not a separately protected property interest,
but rather a measure of damages for the deprivation of a liberty interest. See
id. (“[Plaintiff]’s property interest in her business is essentially her interest in
the lost profits, which are sought merely as the measure of damages in this
action.”). Interpreting this statement, we later noted that “it is unclear in
Kacal whether lost profits were considered a protected property interest or only
a measure of damages.” Stidham v. Tex. Comm’n on Private Sec., 418 F.3d
486, 492 n.9 (5th Cir. 2005); see id. (“Nevertheless, we are persuaded, if not
required, by Kacal to conclude that anticipated profits from this arrangement
may be considered as a measure of damages from the deprivation of a liberty
interest.”). Given this lack of clarity, “existing precedent [has not] placed the
. . . constitutional question” here “beyond debate,” and Plaintiffs’ property
interest in their lost profits is not clearly established. al–Kidd, 563 U.S. at
741.
        The district court also did not err when it held that Defendants were
entitled to qualified immunity on Plaintiffs’ claim that Defendants had
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                                         No. 15-50832
deprived them of a liberty interest in violation of the Due Process Clause. This
court has previously recognized that there is a liberty interest in “operat[ing]
a legitimate business, free from arbitrary deprivation by local police acting
under the color of state law,” under the Due Process Clause of the Fourteenth
Amendment. Kacal, 928 F.2d at 702. However, government actions that cause
“a brief interruption” of a person’s occupational calling do not amount to a
deprivation of this liberty interest in the same way as “a complete prohibition
of the right to engage in a calling.” Conn v. Gabbert, 526 U.S. 286, 292 (1999).
Similarly, in Kacal this court recognized that a plaintiff’s liberty interest in
operating a business was not violated where “the government had not
significantly altered or deprived [a plaintiff] of his liberty interest in practicing
[his profession] or his property interests in the profits therefrom.” 928 F.3d at
703. However, the Kacal court held that the plaintiff there had sufficiently
shown that the government had deprived her of this liberty interest because
she adduced evidence “that the comprehensive, concerted actions of the police
caused [plaintiff] to lose so much of her business that she had to close her doors
and default on her lease.” Id.
       Taking the evidence on summary judgment in the light most favorable
to Plaintiffs, Defendants’ conduct did not deprive Plaintiffs of their liberty
interest in operating their legal business. Although the district court held that
Defendants did not violate Plaintiffs’ due process rights because Plaintiffs were
not effectively foreclosed from operating Mulligan’s Pub, the evidence also
failed to show that Plaintiffs’ ability to operate their business was significantly
altered or impaired. 3         In particular, since the beginning of the alleged

       3  The district court read Conn and the Ninth Circuit’s decision in Dittman v.
California, 191 F.3d 1020 (9th Cir. 1999), as suggesting that only a complete prohibition on
the right to conduct a business can sustain a substantive due process claim for violations of
occupational liberty. Because the evidence on summary judgment showed that Plaintiffs
failed to allege a significant alteration of their liberty interest like the plaintiff in Kacal, we
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                                     No. 15-50832
harassment by Defendants, Plaintiffs had periods where sales from their
business increased and continued to run a profitable and operating business.
Accordingly, on summary judgment, Plaintiffs failed to show that Defendants
violated the Due Process Clause by depriving them of a liberty interest in
operating their business.
                                 IV. CONCLUSION
      For the foregoing reasons, the judgment of the district court is
AFFIRMED.

need not determine whether a complete prohibition is required to make out such a
substantive due process claim. See Bain v. Ga. Gulf Corp., 462 F. App’x 431, 433 (5th Cir.
2012) (per curiam) (unpublished) (“We may affirm a district court’s judgment on any ground
raised before the district court and supported by the record.”).
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