Court Opinion

ID: 9590966
Source: CourtListenerOpinion
Date Created: 2023-08-22 00:00:34.896934+00
Date Added: 2024-06-11T10:24:42.921832
License: Public Domain

Case: 22-20019     Document: 00516866428         Page: 1     Date Filed: 08/21/2023

           United States Court of Appeals
                for the Fifth Circuit
                                                                        United States Court of Appeals
                                                                                 Fifth Circuit

                                                                               FILED
                                                                         August 21, 2023
                                  No. 22-20019                            Lyle W. Cayce
                                                                               Clerk

   St. Maron Properties, L.L.C.; Yang Su, doing business as
   Re-Mart Investment; John Winkler; Jose M. Gallegos,

                                                           Plaintiffs—Appellants,

                                      versus

   City of Houston; Ella Park Terrace Civic Club,

                                                        Defendants—Appellees.

                  Appeal from the United States District Court
                      for the Southern District of Texas
                            USDC No. 4:19-CV-900

   Before Dennis, Elrod, and Ho, Circuit Judges.
   James C. Ho, Circuit Judge:
         A group of property owners alleges that the Mayor of Houston, the
   City Council, and the City Attorney concocted a scheme to trespass on and
   damage their properties to benefit neighboring residents—all without
   permission, compensation, or due process. The property owners allege that
   the City used their empty lots as a dumping ground for construction
   materials, thereby rendering their land unable to absorb water. As a result,
   neighboring residences were frequently flooded over subsequent decades.
   After numerous complaints from the neighboring residents, the Mayor and
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   City Council directed city officials to conduct various remediation efforts on
   the lots, thereby damaging the properties—all without the consent of the
   owners.
          The property owners—Jose M. Gallegos, John Winkler, Yang Su
   (doing business as Re-Mart Investment), and St. Maron Properties—
   brought, inter alia, § 1983 claims against the City under the Takings Clause,
   the Due Process Clause, and the Equal Protection Clause, as well as state law
   tort and statutory claims. The district court dismissed the state law claims as
   barred by sovereign immunity. It also dismissed the § 1983 claims under Rule
   12(b)(6) for failure to satisfy the requirements for municipal liability under
   Monell v. Dep’t of Soc. Servs., 436 U.S. 658 (1978).
          We affirm the dismissal of the state law claims. But we reverse the
   dismissal of the § 1983 claims.
          Under Monell, a § 1983 plaintiff may not proceed against a
   municipality unless the injury was caused by an official policy of the
   municipality. But here, the property owners allege that city officials violated
   their rights at the specific direction of the Mayor and the City Council.
          That is enough to establish liability under Monell. “If the decision to
   adopt [a] particular course of action is properly made by th[e] government’s
   authorized decisionmakers, it surely represents an act of official government
   policy.” Pembaur v. City of Cincinnati, 475 U.S. 469, 481 (1986).
          Accordingly, we hold that the property owners are entitled to proceed
   against the City on their federal claims.
                                          I.
          For purposes of this appeal, we accept the factual allegations in Plain-
   tiffs’ complaint as true. See, e.g., Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

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          Before Plaintiffs acquired the lots, the City used the land as a dumping
   ground for dirt and road construction debris. As a result, the land compacted
   into a mound raised eight-to-ten feet above the surrounding area. Because
   the debris was composed of clay and construction materials, the land was un-
   able to soak up rainwater.
          Ella Park Terrace is a subdivision bordering the lots. When it rains,
   water from the lots sheds onto the backyards of some Ella Park Terrace
   homes.
          For decades, Ella Park Terrace residents have complained to the City
   about the resulting flooding. The City planned to remediate the flooding.
   But the plan fell apart when the City couldn’t afford to compensate Ella Park
   Terrace homeowners for modifications to their backyards.
          Eventually, the Houston Mayor brought the watershed issue to the
   City Council on behalf of the Ella Park Terrace Civic Club (“Ella Park”), a
   civic association comprised of subdivision residents. The City Council then
   directed the City Attorney’s Office and Department of Public Works and En-
   gineering (“Public Works”) to find a means of alleviating the flooding.
          With the Mayor’s and City Council’s support, the City Attorney’s
   Office filed a lawsuit in county court on behalf of and in the name of Ella Park
   against Plaintiff Gallegos. The lawsuit shifted blame for the watershed from
   the City to Gallegos and sought injunctive relief accordingly. The City At-
   torney represented Ella Park in every aspect of the lawsuit. And the Mayor
   said on TV that “her legal team [was] throwing the [C]ity’s muscle behind”
   Ella Park.
          The lawsuit alleged that all of the lots belonged to Gallegos. Gallegos
   never appeared or answered. But the county court entered a permanent in-
   junction anyway. The court found that Gallegos was properly served. But
   Plaintiffs dispute that any of them—including either Gallegos or the

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   predecessors-in-interest to Su and St. Maron—was ever given notice prior to
   the issuance of the challenged injunction. The county court also found
   Gallegos was the owner of real property adjoining Ella Park; that he was re-
   sponsible for the increased elevation causing water to stream onto Ella Park;
   and that he created a public nuisance.
          Among other things, the injunction ordered Gallegos to remediate the
   watershed issue at his own expense and permitted Ella Park to enter the lots
   or obtain enforcement by contempt of court if Gallegos failed to remediate.
   Remediating in accordance with the injunction would have required Gallegos
   to trespass onto the other Plaintiffs’ lots.
          After Ella Park complained about the continued flooding, the City di-
   rected and authorized Public Works to enter the lots to remediate the water-
   shed. Public Works did so. But heavy rains the following year revealed that
   stormwater did not flow as intended. So once again, Public Works entered
   the lots without permission, engineering studies, assessments, easements, or
   condemnation. Public Works used various motorized vehicles and machin-
   ery to further modify the lots. These changes caused repeated flooding on
   the lots, leading to mosquito and snake infestations. They have deprived
   Plaintiffs of their use of their properties.
          Plaintiffs sought the help of Houston’s citizens helpline, Public
   Works, and the City Attorney’s Office, but received no response. So they
   sued in state court. They argued that the injunction the City obtained on
   behalf of Ella Park was frivolous and based on facts the City knew to be un-
   true—namely, that Gallegos owned all the lots, and that he caused the in-
   crease in elevation.
          The City removed when Plaintiffs asserted § 1983 claims, and then
   moved to dismiss. The district court dismissed the federal claims under

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   Monell. It dismissed the state law claims as barred by sovereign immunity.
   Plaintiffs appealed.
                                           II.
          We begin with the federal claims. A district court’s dismissal under a
   Rule 12(b)(6) motion is reviewed de novo, “accepting all well-pleaded facts as
   true and viewing those facts in the light most favorable to the plaintiffs.”
   Wolcott v. Sebelius, 635 F.3d 757, 763 (5th Cir. 2011) (quotation omitted). In
   their detailed 44-page complaint, Plaintiffs allege that Houston policymakers
   enacted an elaborate scheme which led to the unconstitutional taking of their
   properties without just compensation or due process. We conclude that
   Plaintiffs have sufficiently pled claims for municipal liability under § 1983.
          “Section 1983 is not itself a source of substantive rights, but merely
   provides a method for vindicating federal rights elsewhere conferred.”
   Albright v. Oliver, 510 U.S. 266, 271 (1994) (quotations omitted). It provides
   that any person who, under color of state law, deprives another of “any
   rights, privileges or immunities secured by the Constitution and laws, shall
   be liable to the party injured in an action at law, suit in equity, or other proper
   proceeding for redress.” 42 U.S.C. § 1983. Municipalities are persons
   susceptible to suit under § 1983, but they cannot be found liable on a theory
   of vicarious liability or respondeat superior. Monell, 436 U.S. at 690–92.
          To state a Monell claim against Houston, Plaintiffs must plead facts
   that plausibly establish that “(1) an official policy (2) promulgated by the
   municipal policymaker (3) was the moving force behind the violation of a
   constitutional right.” Peña v. City of Rio Grande City, 879 F.3d 613, 621 (5th
   Cir. 2018) (quotation omitted). See also Monell, 436 U.S. at 694. We consider
   each of these elements.
          First, there are three ways to establish an official policy under Monell:
   (1) written policy statements, ordinances, or regulations; (2) a widespread

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   practice that is so common and well-settled as to constitute a custom that
   fairly represents municipal policy; or (3) even a single decision may
   constitute municipal policy in rare circumstances, when the official or entity
   possessing final policymaking authority for an action performed the specific
   act that forms the basis of the § 1983 claim. Webb v. Town of Saint Joseph, 925
   F.3d 209, 214–15 (5th Cir. 2019). This case falls within the third category.
          “If the decision to adopt [a] particular course of action is properly
   made by th[e] government’s authorized decisionmaker, it surely represents
   an act of official government policy.” Pembaur, 475 U.S. at 481. This
   element is met if a plaintiff alleges that a “deliberate choice to follow a course
   of action is made from among various alternatives” by officials responsible
   “for establishing final policy with respect to the subject matter in question.”
   Garza v. City of Donna, 922 F.3d 626, 638 (5th Cir. 2019) (quotations
   omitted).
          Here, Plaintiffs allege—and, in some instances, incorporate evidence
   into their complaint—that:

      • The City Council had previously considered at least one other option
          to remediate the watershed, but chose not to proceed, due to expense.

      • The Mayor brought Ella Park’s concerns about the watershed before
          the City Council and directed the City Council to vote on the issue.
          And the City Council—at the direction of the Mayor—voted to have
          several city service departments address the issue.

      • The Mayor and the City Council ratified the City Attorney’s Office’s
          decision to pursue an injunction against Plaintiff Gallegos, “[d]espite
          an abundance of options” to remediate the issue.

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      • At least one City Council member thanked the Mayor and City
          Attorney’s Office for the City’s “aggressive legal action on behalf of
          Ella Park.”

      • Houston filed and litigated the injunction action in the name of Ella
          Park against Gallegos, despite the City Attorney’s Office knowing that
          Gallegos wasn’t the owner of all the lots.

      • The Mayor announced on TV that “her legal team [was] throwing the
          [C]ity’s muscle behind [Ella Park’s] legal efforts to fix” the issues and
          authorized the legal team to continue its efforts despite other options.

      • The City Council explained that it was trying to assist the Ella Park
          residents with remediation but needed to resolve some preliminary
          issues.

      • The City Council and City Attorney—relying on the challenged
          injunction—directed Public Works to enter into and modify the lots.
          And Public Works explained to Plaintiff Winkler that it acted “with
          the support” of the Mayor and City Council.
          These allegations establish that the Mayor and City Council made the
   deliberate decision to use City services to get an injunction based on false
   information, and then use that injunction to justify entering and modifying
   Plaintiffs’ properties. Plaintiffs also specify that this approach was selected
   from among various options. These allegations are sufficient to establish an
   official policy under Monell.
          Second, a plaintiff must “identify those officials or governmental
   bodies who speak with final policymaking authority for the local government
   actor concerning the action alleged to have caused the particular
   constitutional or statutory violation.” McMillian v. Monroe Cnty., Ala., 520
   U.S. 781, 784–85 (1997) (quotation omitted). That inquiry is “dependent on

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   an analysis of state law,” because the court’s “understanding of the actual
   function of a governmental official, in a particular area, will necessarily be
   dependent on the definition of the official’s function under relevant state
   law.” Id. at 786.
          Houston argues that Plaintiffs have failed to allege this prong because
   they “do not allege facts that any of the persons making the specific decisions
   in the City public works or legal departments were final decisionmakers.”
   But this misstates Plaintiffs’ claims. Fairly read, the complaint alleges that
   Houston is liable because the Mayor and City Council directed the City
   Attorney’s Office and Public Works to carry out their unconstitutional
   scheme. Cf. Webb, 925 F.3d at 217 (“Even when an official with final
   policymaking authority does not directly act to set policy, a municipality may
   be liable in extreme factual situations when that official ratifies a
   subordinate’s decision, which requires more than the defense of a decision
   or action shown to be unconstitutional after the fact.”) (quotation omitted);
   Groden v. City of Dallas, Tex., 826 F.3d 280, 286 (5th Cir. 2016) (noting that
   allegations that a policymaker “ratified an unconstitutional policy” may be
   enough at the pleading stage and that under some circumstances—like a city
   spokesman announcement—statements to media may “allow[] for a
   reasonable pleading inference that [a challenged] policy was attributable to
   an official policy made by the policymaker of the city”).
          The Mayor and City Council are final policymakers for the purpose of
   Monell liability. The Houston Charter makes it clear that “[t]he governing
   body of the City of Houston, Texas, shall be the City Council,” and that it
   “shall be composed of the Mayor and . . . Council Members.” Houston,
   Tex., Charter art. V, § 1. It further specifies that “[a]ll administrative
   work of the city government shall be under the control of the Mayor.” Id. at
   art. VI, § 7a. And it establishes that the “Mayor shall have and exercise such
   powers, prerogatives and authority, acting independently of or in concert

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   with the City Council, as are conferred by the provisions of this Article or as
   may be conferred upon him by the City Council.” Id. at art. VI, § 7.
          Plaintiffs have plausibly alleged that the Mayor and City Council
   directed and ratified the unconstitutional actions of City departments, and
   the Houston Charter makes clear the Mayor and City Council have
   policymaking authority. These allegations are sufficient to establish an
   official policymaker under Monell.
          Third, a plaintiff must allege “a direct causal link between the
   municipal policy and the constitutional deprivation.” Piotrowski v. City of
   Houston, 237 F.3d 567, 580 (5th Cir. 2001). A plaintiff must also show “the
   requisite degree of culpability,” which is at least “deliberate indifference to
   the risk that a violation of a particular constitutional or statutory right will
   follow the decision.” Valle v. City of Houston, 613 F.3d 536, 542 (5th Cir.
   2010) (quotations omitted).
          Here, Plaintiffs allege that Houston infringed on their rights to just
   compensation under the Takings Clause of the Fifth Amendment, as well as
   procedural due process and equal protection under the Fourteenth
   Amendment.
          “A property owner has an actionable Fifth Amendment takings claim
   when the government takes his property without paying for it.” Knick v. Twp.
   of Scott, Pa., 139 S. Ct. 2162, 2167 (2019). Generally, a “property owner has
   suffered a violation of his Fifth Amendment rights when the government
   takes his property without just compensation, and therefore may bring his
   claim in federal court under § 1983 at that time.” Id. at 2168. Even
   temporary physical invasions into private property constitute per se physical
   takings, warranting compensation. See Cedar Point Nursery v. Hassid, 141 S.
   Ct. 2063, 2080 (2021).

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          Plaintiffs allege that Houston entered their properties on multiple
   occasions and modified them by relying on the challenged injunction. The
   allegations support the inference that the challenged injunction gave
   Houston a justification to enter the lots without permission. And although
   it’s fair to note that the City would’ve had an independent right to enter the
   lots if they had been declared a public nuisance, that doesn’t alter the
   analysis. After all, the county court only declared the lots a public nuisance
   in the challenged injunction—meaning there wouldn’t have been an
   independent right to enter without the alleged scheme.
          Plaintiffs argue that they were deprived of their Fourteenth
   Amendment rights because none of them “were given notice or an
   opportunity to be heard prior to the taking of their property by [Houston]
   under the guise of a declaration of nuisance.” Even assuming that Gallegos
   was properly served, there are sufficient allegations to support the inference
   that Houston violated the due process rights of the other property owners.
          Procedural due process guarantees an “opportunity to be heard at a
   meaningful time and in a meaningful manner.” Matthews v. Eldridge, 424
   U.S. 319, 333 (1976) (cleaned up). Plaintiffs alleged that, even though the
   City was aware that people other than Gallegos owned the lots, it directed the
   injunction case against him alone. As a result, the other lot owners had no
   opportunity to defend against the challenged injunction. Considering that
   the challenged injunction declared the lots a public nuisance and commanded
   Gallegos (or Ella Park) to enter into them in order to remediate the
   watershed, this amounts to a significant constitutional deprivation.         It
   demonstrates “deliberate indifference to the known or obvious fact” that a
   constitutional violation of the rights of the other property owners would
   result. Webb, 925 F.3d at 219.

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                                         ***
          Plaintiffs have specifically alleged each of the elements of a Monell
   claim. Accordingly, the district court erred in dismissing the § 1983 claims.
                                         III.
          We now turn to the state law claims. A district court’s determination
   of subject-matter jurisdiction is reviewed de novo. See In re FEMA Trailer
   Formaldehyde Prods. Liab. Litig., 668 F.3d 281, 286 (5th Cir. 2012).
          “Sovereign immunity is jurisdictional.” Cozzo v. Tangipahoa Par.
   Council—President Gov’t, 279 F.3d 273, 280 (5th Cir. 2002). Sovereign
   immunity protects Texas and its political subdivisions—including
   municipalities like Houston—from suits for money damages. See Wasson
   Ints., Ltd. v. City of Jacksonville, 489 S.W.3d 427, 429 (Tex. 2016) (Wasson
   I).
          When it comes to the sovereign immunity of municipalities in tort
   actions, the Texas Supreme Court “has distinguished between those acts
   performed as a branch of the state and those acts performed in a proprietary,
   non-governmental capacity.” Id. at 430. Plaintiffs argue that sovereign
   immunity is nonexistent here because Houston was acting in a propriety
   capacity since the City was acting on behalf of Ella Park—a group of private
   citizens.
          “[G]enerally speaking, a municipality’s proprietary functions are
   those conducted in its private capacity, for the benefit only of those within its
   corporate limits, and not as an arm of the government, while its government
   functions are in the performance of purely governmental matters solely for
   the public benefit.” Tooke v. City of Mexia, 197 S.W.3d 325, 343 (Tex. 2006)
   (quotation omitted). Although this rule is well settled, the Texas Supreme
   Court has recognized that difficulties may arise depending on the particular

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   fact pattern presented. See City of Houston v. Shilling, 240 S.W.2d 1010, 1012
   (1951).
             The Texas Constitution authorizes the Legislature to “define for all
   purposes those functions of a municipality that are to be considered
   governmental and those that are proprietary, including reclassifying a
   function’s classification assigned under prior statute or common law.” Tex.
   Const. art. XI, § 13(a).        Texas courts “are very hesitant to declare
   immunity nonexistent,” and thus “carefully consider the statutory landscape
   before doing so.” Wasson I, 489 S.W.3d at 437–38 (quotation omitted).
             The Texas Tort Claims Act includes “sanitary and storm sewers” in
   its non-exhaustive list of governmental functions. Tex. Civ. Prac. &
   Rem. Code § 101.0215(a)(9). See also City of Tyler v. Likes, 962 S.W.2d
   489, 502 (Tex. 1997) (acknowledging that prior to amendments to the Texas
   Tort Claims Act, common law classified storm sewer maintenance as
   proprietary). And under Texas law, the fact that the Texas Tort Claims Act
   lists “sanitary and storm sewers” as a governmental function is dispositive.
   See Texas Dep’t of Transp. v. A.P.I. Pipe & Supply, LLC, 397 S.W.3d 162, 171
   n.38 (Tex. 2013) (noting the “legislative interpretation of ‘governmental
   functions’” is “binding” in the “context of the Tort Claims Act”). The Act
   explicitly states that the “proprietary functions of a municipality do not
   include those governmental activities listed.” Tex. Civ. Prac. & Rem.
   Code § 101.0215(c). So “[i]f a function is included in the nonexclusive list
   of governmental functions, it has been deemed governmental in nature by the
   legislature and [courts] have no discretion or authority to hold otherwise.”
   Roger v. City of Houston, 627 S.W.3d 777, 794 (Tex. App.—Houston 2021, no
   pet.). Because the Texas Tort Claims Act establishes that “sanitary and
   storm sewers” are governmental functions, Plaintiffs’ argument is foreclosed
   here. A.P.I. Pipe, 397 S.W.3d at 171 n.38.

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          Alternatively, Plaintiffs make various arguments that Texas has
   waived sovereign immunity for the claims here. None succeed.
          To begin with, Plaintiffs argue that, even if Houston was acting within
   a governmental capacity, it waived immunity by interjecting itself in
   damages-seeking litigation. “[I]f the governmental entity interjects itself
   into or chooses to engage in litigation to assert affirmative claims for
   monetary damages, the entity will presumably have made a decision to
   expend resources to pay litigation costs.” Reata Construction Corp. v. City of
   Dallas, 197 S.W.3d 371, 375 (Tex. 2006).
          But Reata establishes a narrow exception. In Reata, the City of Dallas
   intervened in a negligence dispute to seek damages from a third-party
   claimant. Id. at 373. It then invoked sovereign immunity in response to the
   third-party claimant’s claim against it. Id. The Texas Supreme Court
   recognized that “it would be fundamentally unfair to allow a governmental
   entity to assert affirmative claims against a party while claiming it had
   immunity as to the party’s claims against it.” Id. at 375–76. “If the opposing
   party’s claim can operate only as an offset to reduce the government’s
   recovery [under its own claim], [then] no tax resources w[ould] be called
   upon to pay a judgment, and the fiscal planning of the governmental entity
   should not be disrupted.” Id. at 375. So Dallas did not have immunity from
   suit as to counter-claims “which [we]re germane to, connected with, and
   properly defensive of the City’s claims, to the extent [the counter-
   claimant’s] claims offset those asserted by the City.” Id. at 373.
          Reata’s narrow holding doesn’t encompass the situation in this case.
   Here Plaintiffs claim that Houston acted on behalf of private citizens in their
   efforts to seek damages (and remediation) from Gallegos. They’re not
   alleging that Houston sought damages in a way that would offset the fiscal
   impacts of being subject to suit.

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           Plaintiffs’ other arguments fare no better.
           “In a suit against a governmental unit, the plaintiff must affirmatively
   demonstrate the court’s jurisdiction by alleging a valid waiver of immunity.”
   DART v. Whitley, 104 S.W.3d 540, 541 (Tex. 2003). And “a statute shall not
   be construed as a waiver of sovereign immunity unless the waiver is effected
   by clear and unambiguous language.” Tex. Gov’t Code § 311.034.
           The Texas Tort Claims Act provides only a limited waiver for claims
   arising out of negligence. It waives immunity for “the property damage . . .
   [that] arises from the operation or use of a motor-driven vehicle or motor-
   driven equipment; and . . . the employee would be personally liable to the
   claimant according to Texas law.” Tex. Civ. Prac. & Rem. Code
   § 101.021(1).     Here, the injury is the taking of the property without
   compensation or due process, which was not caused by the use of motor
   vehicles. The district court did not err in dismissing the negligence claim.
           Two of Plaintiffs’ claims are for intentional torts—trespass and civil
   conspiracy. See Harris Cnty. v. Cypress Forest Pub. Util. Dist., 50 S.W.3d 551,
   553 (Tex. App.—Houston 2001) (trespass); Firestone Steel Prods. Co. v.
   Barajas, 927 S.W.2d 608, 617 (Tex. 1996) (civil conspiracy). The Texas Tort
   Claims Act doesn’t apply to any claim “arising out of assault, battery, false
   imprisonment, or any other intentional tort.” Tex. Civ. Prac. & Rem.
   Code § 101.057(2) (emphasis added). So the district court did not err in
   dismissing the trespass and civil conspiracy claims. 1

           1
              The district court dismissed the statutory claim for use of fraudulent court
   records. Aside from their argument regarding the applicability of Reata to this case,
   Plaintiffs don’t address this issue in their opening brief. They have therefore abandoned
   any other argument on this claim. See Yohey v. Collins, 985 F.3d 222, 224–25 (5th Cir.
   1993). Moreover, at no point have Plaintiffs shown a waiver of immunity for claims under
   this statute. The district court properly dismissed this claim.

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                                               ***
           We affirm the district court’s dismissal of the state tort and statutory
   claims against Houston. We reverse and remand the dismissal of the § 1983
   claims against Houston.

            Plaintiffs also asserted state law claims against Ella Park, which the district court
   likewise dismissed. Because neither party briefed this issue and Ella Park never appeared
   at the district court, it’s not properly before us.

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