Court Opinion

ID: 4314153
Source: CourtListenerOpinion
Date Created: 2018-09-21 00:00:16.224305+00
Date Added: 2024-06-11T14:44:37.088947
License: Public Domain

Case: 17-60810      Document: 00514650953         Page: 1    Date Filed: 09/20/2018

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

                                      No. 17-60810                                 FILED
                                                                           September 20, 2018
                                                                              Lyle W. Cayce
WRECKER WORKS, L.L.C.; STEPHANIE THOMPSON,                                         Clerk

              Plaintiffs–Appellants,

v.

CITY OF ABERDEEN, MISSISSIPPI; HENRY RANDLE, in his individual
capacity,

              Defendants–Appellees.

                   Appeal from the United States District Court
                     for the Northern District of Mississippi
                             USDC No. 1:16-CV-117

Before DENNIS, OWEN, and SOUTHWICK, Circuit Judges.
PER CURIAM:*
       Stephanie Thompson sued the city of Aberdeen, Mississippi (the City)
and its Chief of Police, Henry Randle, under 42 U.S.C. § 1983, asserting a
deprivation of a property right in violation of the due process clause of the
Fourteenth Amendment. She also asserted a state-law claim against Randle
for tortious interference with business relations. The district court granted
summary judgment for the City and Randle on all claims. We affirm.

       * 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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.
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                                         I
         When a traffic accident in Aberdeen necessitates the towing of a vehicle,
the local police department dispatches a private provider from the City’s
rotation list, unless the owner of the vehicle requests a specific company. The
requirements for inclusion on the rotation list are set forth in the City’s towing
or wrecking service ordinance.
         Stephanie Thompson started a towing business in April 2016.          She
formed a limited liability company, Wrecker Works, LLC, and bought the
equipment and tools of a local company, Irvin Wrecker Service, from Dean
Irvin.     The asset purchase agreement purported to assign Irvin Wrecker
Service’s customer contracts and its place on several wrecker-service rotation
lists, including that of the City. Irvin told Thompson that he usually received
one to three rotation-list calls per week from the City.         During a short
transition period before the sale, Thompson serviced clients (other than the
City) of Irvin Wrecker Service, which later transmitted the payments to
Thompson.
         Unbeknownst to Irvin and Thompson, when Chief Randle learned of the
pending sale two weeks before the transaction was finalized, he removed Irvin
Wrecking Company from the rotation list. Chief Randle also operated a towing
company, H & M Towing. H & M Towing provided services primarily to private
clients, but occasionally received calls from the City if the vehicle owner
specifically requested H & M. Randle’s company had not been on the City’s
rotation list since 2014, when he was the subject of an ethics complaint to the
state attorney general.      Randle had a fractious relationship with Irvin, a
former alderman who had voted to halve Randle’s pay due to personnel issues
not related to the wrecker/towing service rotation list.
         Prior to the consummation of the transaction with Irvin, Thompson
submitted a request to the City Clerk on April 27, 2016, to have Wrecker Works
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added to the rotation list. Under the wrecker ordinance in place between
March 2014 and June 7, 2016, a towing company seeking to be on the rotation
list was required to file a written request with the Clerk. The City Building
Official and Zoning Administrator would then investigate the company,
including its equipment and insurance coverage, to ensure it was qualified to
be on the rotation list. When the “investigating officer” was “satisfied” of the
company’s qualifications, he or she would “direct the City Clerk to issue the
wrecker company an ‘Authorized Permit’ and the Clerk [would] direct the Chief
of Police to place the company on the City of Aberdeen Rotation list.” The
ordinance defined “Authorization Permit” as “[t]he written authorization by
the City Clerk (after receiving the Compliance Officer’s report of compliance)
which entitles a Wrecker Company’s name to be placed on the Wrecker
Rotation list.”
      Neither Thompson nor city officials followed the requirements of the
wrecker ordinance to the letter. Thompson testified that she gave the Clerk a
certificate of insurance and that the Clerk ordered an investigation to
determine that Wrecker Works met all qualifications. Thompson appears to
have believed that because the equipment previously belonged to a company
on the rotation list, an inspection was unnecessary. She maintains that other
required steps were also completed. However, the record does not reflect that
an inspection took place or that Wrecker Works received an authorization
permit from the City Clerk. Instead, Thompson asked the Board of Aldermen
(Board), the City’s governing body, to put Wrecker Works on the rotation list.
The Board approved this request on May 3, 2016, even though Board approval
was not part of the procedures to gain inclusion on the rotation list set forth in
the wrecker ordinance in effect at the time. Two days later, Thompson and
Irvin formalized the asset purchase agreement, and Irvin Wrecker Service
eventually dissolved.
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       When Wrecker Works did not initially receive calls from the City,
Thompson informed Alderman Jim Buffington, who agreed to address the
matter at the June 7, 2016 Board meeting. Buffington asked Chief Randle why
Wrecker Works was not on the rotation list. In this litigation, Randle stated
that he did not initially put Wrecker Works on the list because he was in the
process of drafting a new wrecker ordinance—which the Board approved in the
June 7 meeting—that gave Randle the authority to investigate the companies
seeking to be on rotation. He also claimed that Thompson had not given him
a certificate of insurance—a requirement of the new ordinance. About three
days after the meeting, Wrecker Works began receiving the expected number
of calls.
       Later, Wrecker Works and Thompson sued, claiming that the City and
Chief Randle violated the due process clause by failing to place Wrecker Works
on the rotation list immediately after the May 3 Board meeting. They sought
to recover the estimated income lost (about $2,500) for the period between May
3 and June 10. Wrecker Works and Thompson also sued Randle for malicious
interference with business relations under state law.
       The district court granted summary judgment in favor of the City and
Chief Randle. As to the constitutional claims, the court reasoned that Wrecker
Works did not have a property interest in being placed on the rotation list
immediately. Alternatively, the court held that the City could not be held
liable for Chief Randle’s actions and that Chief Randle had qualified immunity.
As to the state law claim, the court concluded that there was no evidence that
Chief Randle’s actions were motivated by malice.         Wrecker Works and
Thompson appeal. Wrecker Works and Thompson expressly concede in their
Reply Brief that the City is not liable for the purported deprivations of due
process. We therefore limit our analysis to whether Chief Randle can be held

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liable—under the Constitution or under state law—for his delay in placing
Wrecker Works on the rotation list.
                                              II
       We review a district court’s grant of summary judgment de novo. 1 To
survive summary judgment on their procedural and substantive due process
claims, Wrecker Works and Thompson must establish that Chief Randle is not
entitled to qualified immunity. “The doctrine of qualified immunity protects
government officials from liability from civil damages insofar as their conduct
does not violate clearly established statutory or constitutional rights of which
a reasonable person would have known.” 2 “A plaintiff can overcome a qualified
immunity defense by showing ‘(1) that the official violated a statutory or
constitutional right, and (2) that the right was “clearly established” at the time
of the challenged conduct.’” 3
       The Fourteenth Amendment prohibits state actors from “depriv[ing] any
person of life, liberty, or property, without due process of law.” 4 To obtain
redress under the due process clause, a plaintiff must show that (1) she has a
property interest and (2) a state actor has deprived her of that interest without
due process. 5 Property interests are not created by the text of the Constitution
itself, but by other sources such as “state law, local ordinances, contracts, and
mutually explicit understandings.” 6               While benefits distributed by the
government may give rise to property interests, 7 a mere “unilateral

       1 Smith v. Reg’l Transit Auth., 827 F.3d 412, 417 (5th Cir. 2016) (citing United States
v. Lawrence, 276 F.3d 193, 195 (5th Cir. 2001)).
       2 Rockwell v. Brown, 664 F.3d 985, 990 (5th Cir. 2011) (internal quotations omitted)

(quoting Pearson v. Callahan, 555 U.S. 223, 231 (2009)).
       3 Allen v. Cisneros, 815 F.3d 239, 244 (5th Cir. 2016) (per curiam) (quoting Ashcroft v.

al–Kidd, 563 U.S. 731, 741 (2011)).
       4 U.S. CONST. amend. XIV.
       5 Blackburn v. City of Marshall, 42 F.3d 925, 935 (5th Cir. 1995).
       6 Id. at 936-37.
       7 Ridgely v. FEMA, 512 F.3d 727, 735 (5th Cir. 2008).

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expectation of receiving government referrals” 8 is not sufficient—there must
be a “legitimate claim of entitlement.” 9 Whether the City’s rotation list confers
a property interest depends on whether the specific facts of this case create an
entitlement. 10
       Over the course of this litigation, Wrecker Works has identified three
potential sources for its alleged property interest. First, Wrecker Works claims
that it has a right to be on the rotation list because Irvin Wrecker Service had
previously been on the list, and the purchase agreement between the two
entities purported to assign the relationship with the City. As an initial
matter, Wrecker Works had no property interest in assuming Irvin Wrecker
Service’s place on the list. The transaction between Wrecker Works and Irvin
Wrecker Service was structured as an asset purchase rather than a merger or
equity purchase, and Irvin Wrecker Service dissolved after the sale. Nothing
in the wrecker ordinance permits a towing company to assign a right to be
included on the rotation list.             Rather, the ordinance states that any
authorization permit is “personal to the holder” and prohibits towing
companies from referring rotation calls to other companies. Inclusion on the
rotation list was specific to a particular company. Furthermore, there was no
understanding between the Board and Thompson that Wrecker Works would
occupy Irvin Wrecker Service’s place on the list. In fact, Thompson sought and
obtained Board approval for Wrecker Works to be on the list before the asset
purchase was finalized.

       8 Blackburn, 42 F.3d at 937.
       9 Id. at 936.
       10 Id. at 937; see also Chavers v. Morrow, 354 F. App’x 938, 940-42 (5th Cir. 2009) (per

curiam) (unpublished) (observing that tow-rotation schemes may confer property interests
but holding that the ordinance at issue did not do so).
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       Insofar as Wrecker Works seeks to litigate constitutional claims on
behalf of Irvin Wrecker Service, it lacks standing to do so. To have standing to
sue in federal court, plaintiffs must demonstrate:
       (1) that they suffered an injury in fact, which is a concrete and
       particularized invasion of a legally protected interest; (2) that the
       injury is traceable to the challenged action . . . ; and (3) it is likely,
       rather than merely speculative, the injury will be redressed by a
       particular decision. 11
        The district court held that Wrecker Works did not have standing to
argue this issue because any injury caused when Chief Randle removed Irvin
Wrecker Service from the rotation list affected only Irvin Wrecker Service. Any
redress would accrue to Irvin Wrecker Service, not Wrecker Works. On appeal,
Wrecker Works and Thompson argue that since Thompson was operating her
wrecker service under the Irvin Wrecker Service name shortly before the
official sale was completed, Thompson did experience an injury. Assuming
that Wrecker Works suffered an injury when Irvin Wrecker Service was
removed from the rotation list, Wrecker Works does not have standing because
any relief would belong to Irvin Wrecker Service. Since Wrecker Works merely
acquired enumerated assets of Irvin Wrecker Service—it did not acquire the
entity itself or its accounts receivable—it has no claim of damages for any
business lost by the removal from the rotation list.                    Because any relief
regarding the removal of Irvin Wrecker Service from the rotation list would
not redress harm experienced by Wrecker Works, Wrecker Works does not
have standing.
       As a second source of a property interest, Wrecker Works argued before
the district court that the City’s wrecker ordinance granted it the right to be
on the list.      Whether the ordinance creates a constitutionally protected

       11Williams v. Parker, 843 F.3d 617, 620 (5th Cir. 2016) (quoting Hollis v. Lynch, 827
F.3d 436, 441 (5th Cir. 2016)); see also Lujan v. Defs. of Wildlife, 504 U.S. 555, 560-61 (1992).
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property interest depends on “whether [it] place[s] ‘substantive limitations on
official discretion.’” 12 “[A] benefit is not a protected entitlement if government
officials may grant or deny it in their discretion.” 13 “In determining whether
statutes and regulations limit official discretion, the Supreme Court has
explained that we are to look for ‘“explicitly mandatory language,” i.e., specific
directives to the decisionmaker that if the regulations’ substantive predicates
are present, a particular outcome must follow.’” 14 In Ridgley, for example, this
court held that the plaintiffs did not have a property interest in rent assistance
from FEMA because the relevant statutes and regulations said only that
FEMA “may” give assistance to qualifying individuals. 15
      The City’s wrecker ordinance provides that, after the required
inspections and investigations, if the “Investigating Officer is satisfied that the
wrecker company is qualified, he will direct the City Clerk to issue the wrecker
company an ‘Authorized Permit’ and the Clerk will direct the Chief of Police to
place the company on the City of Aberdeen Rotation list.” The district court
held that Thompson and Wrecker Works did not have a property interest in
immediate placement on the list and that the ordinance does not mandate that
the Chief of Police follow directives from the City Clerk to put companies on
the rotation list.
      Wrecker Works concedes this point on appeal, stating that Wrecker
Works’ property interest was “not dependent upon the ordinance itself.” Even
if Wrecker Works had pressed the issue, the record does not reflect that
Wrecker Works had undertaken all of the steps necessary to qualify under the
ordinance. The definitions section of the ordinance states that companies that

      12 Ridgely, 512 F.3d at 735 (quoting Olim v. Wakinekona, 461 U.S. 238, 249 (1983)).
      13 Id. (quoting Town of Castle Rock v. Gonzales, 545 U.S. 748, 756 (2005)).
      14 Id. at 735-36 (quoting Ky. Dep't of Corr. v. Thompson, 490 U.S. 454, 463 (1989)).
      15 Id. at 736.

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obtain an “authorization permit” have a “written authorization by the City
Clerk . . . which entitles a Wrecker Company’s name to be placed on the
Wrecker Rotation list.” But the record does not contain an authorization
permit from the City Clerk, nor is there evidence of the inspections and report
of compliance required for Wrecker Works to receive a permit.                     Rather,
Thompson’s testimony reflects that there was no investigation of her
equipment—she believed it unnecessary because the equipment had
previously been used by Irvin Wrecker Service when it was on the rotation list.
       As a third potential source of a property right, Wrecker Works argues
that when the Board voted in its May 3 meeting to put Wrecker Works on the
rotation list, there was a “mutually explicit understanding” between Thompson
and the Board that Wrecker Works would be placed on the rotation list. The
district court did not address this argument, likely because Wrecker Works
referenced it only obliquely in the proceedings below. It is well-established
that “‘property’ interests subject to . . . due process protection are not limited
by a few rigid, technical forms,” but can arise from “mutually explicit
understandings.” 16 In defining such an understanding, the Supreme Court has
analogized to the doctrine of implied contracts and to labor doctrines that
emphasize course of dealing and historical practice. 17
       In this case, we must evaluate whether such an understanding existed
with reference to state law. 18 In Mississippi, “where a public board engages in
business with another entity, ‘no contract can be implied or presumed, it must
be stated in express terms and recorded on the official minutes and the action

       16Perry v. Sindermann, 408 U.S. 593, 601 (1972).
       17Jago v. Van Curen, 454 U.S. 14, 17-21 (1981).
      18 Blackburn v. City of Marshall, 42 F.3d 925, 937 (5th Cir. 1995) (quoting Bishop v.

Wood, 426 U.S. 341, 344 (1976)).
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of the board.’” 19 When the minutes reflect an agreement, the “entire contract
need not be placed on the minutes,” but the agreement can be enforced only
“where ‘enough of the terms and conditions of the contract are contained in the
minutes for determination of the liabilities and obligations of the contracting
parties without . . . resort[] to other evidence.’” 20
       The official minutes from the Board’s May 3 meeting state that the Board
unanimously voted to “add Wrecker Works, Wrecker Services, Robert and
Stephanie Thompson to the Aberdeen Police Department[’]s rotation list.” The
minutes could be construed to adopt the terms of participation in the rotation
list outlined in the wrecker ordinance (even though the Board did not hold
Wrecker Works to the qualification requirements in the ordinance).                         We
therefore assume that the Board’s vote could constitute an implied contract
that Wrecker Works would be placed on the rotation list. However, neither the
minutes nor the ordinance say when Wrecker Works would be added to the
rotation list. As a result, there was no “mutually explicit understanding” that
Wrecker Works would immediately begin to receive calls. Absent such an
understanding, Wrecker Works did not have a property right in immediate
inclusion on the list. Without a constitutionally protected property interest,
Wrecker Works cannot overcome the first prong of qualified immunity.
       Even if we determined that Wrecker Works had a property interest in
being placed on the rotation list immediately, Chief Randle did not violate
clearly established law by his one-month delay. The “clearly established”
prong of qualified immunity requires that a government official’s conduct not
violate clearly established constitutional or statutory rights that a reasonable

       19 Wellness, Inc. v. Pearl River Cty. Hosp., 178 So. 3d 1287, 1291 (Miss. 2015) (quoting
Burt v. Calhoun, 231 So. 2d 496, 499 (Miss. 1970)).
       20 Id. (quoting Thompson v. Jones Cty. Cmty. Hosp., 352 So. 2d 795, 797 (Miss. 1977)).

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person would know. 21         Although we “do[] not require a case directly on
point” 22—government officials may violate clearly-established law even in
novel factual scenarios if previous cases provide reasonable warning 23—there
must be case law “‘particularized’ to the facts of the case” 24 that puts the
question “beyond debate.” 25 The Supreme Court has recently reiterated the
“longstanding principle that ‘clearly established law’ should not be defined ‘at
a high level of generality’” 26 or couched in “abstract” terms that would
effectively eviscerate immunity. 27 In brief, “qualified immunity protects ‘all
but the plainly incompetent or those who knowingly violate the law.’” 28
       Citing Bowlby v. City of Aberdeen, 29 Wrecker Works and Thompson
contend that Chief Randle contravened settled law when he delayed in putting
Wrecker Works on the rotation list. In Bowlby, the City of Aberdeen’s zoning
board granted the plaintiff a permit to operate a snow-cone business for a
specific street corner near the entrance to town. 30 Shortly thereafter, the
zoning board changed its mind and revoked the permit at a meeting to which
the snow-cone proprietor was not invited. 31 The plaintiff sued, claiming that

       21 Rockwell v. Brown, 664 F.3d 985, 990 (5th Cir. 2011).
       22 Kisela v. Hughes, 138 S. Ct. 1148, 1152 (2018) (per curiam).
       23 Kinney v. Weaver, 367 F.3d 337, 350 (5th Cir. 2004) (en banc).
       24 White v. Pauly, 137 S. Ct. 548, 552 (2017) (per curiam) (quoting Anderson v.

Creighton, 483 U.S. 635, 640 (1987)).
       25 Id. at 551.
       26 Id. at 552 (quoting Ashcroft v. al–Kidd, 563 U.S. 731, 742 (2011)).
       27 Id.; see also Kisela, 138 S. Ct. at 1152-53 (noting that “[s]pecificity is especially

important in the Fourth Amendment context” due to the difficulties that officers face in
determining whether to use force) (internal quotations and citations omitted); Davidson v.
City of Stafford, 848 F.3d 384, 394 (5th Cir. 2017), as revised (Mar. 31, 2017) (assuming,
arguendo, that White’s emphasis on specificity applies to cases other than excessive force,
such as warrantless arrests and limits on speech).
       28 Mullenix v. Luna, 136 S. Ct. 305, 308 (2015) (per curiam) (quoting Malley v.

Briggs, 475 U.S. 335, 341 (1986)).
       29 681 F.3d 215 (5th Cir. 2012).
       30 Id. at 218.
       31 Id.

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she had a property interest in the permit to operate at the original location and
that the board had deprived her of that property without due process of law. 32
We agreed, holding that because “[p]rivileges, licenses, certificates, and
franchises . . . qualify as property interests,” 33 “once issued, a license or permit
cannot be taken away by the State without due process.” 34
      Wrecker Works argues that Bowlby clearly establishes that Chief
Randle could not delay including Wrecker Works on the City’s rotation list
without affording Wrecker Works due process. But Bowlby is distinguishable.
Whereas the snow-cone operator in Bowlby received a permit expressly
granting her the right to do business in a specific location, 35 there is no
evidence in the record that Wrecker Works had a right to immediate inclusion
on the rotation list. Neither the minutes from the Board’s May 3 meeting nor
the wrecker ordinance gave Chief Randle any indication that he was required
to put Wrecker Works on the rotation list without any delay.
      Moreover, the Board’s vote to put Wrecker Works on the rotation list was
a departure from the wrecker ordinance, which did not provide for any Board
involvement in determining whether a towing company could be included on
the list. As noted, it is questionable whether there was a valid “mutually
explicit understanding” under Mississippi law. If such an understanding did
exist, its parameters are far from clear—even after discovery—and make no
mention of timing. A reasonable law enforcement officer therefore could not
be expected to know Wrecker Works had a property interest in immediate
inclusion on the rotation list or that a one-month delay in placing Wrecker
Works on the list would constitute a deprivation of that property. Given the

      32  Id. at 218-19.
      33  Id. at 220 (quoting Wells Fargo Armored Serv. Corp. v. Ga. Pub. Serv. Comm’n, 547
F.2d 938, 941 (5th Cir. 1977)).
       34 Id.
       35 Id. at 218.

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unique facts of this case, Chief Randle’s actions did not violate clearly
established law. Chief Randle is entitled to qualified immunity.
                                           III
       Wrecker Works contends that the district court erred by granting
summary judgment on its state-law claim that Chief Randle maliciously
interfered with its business relationships. Wrecker Works asserts that Randle
interfered with the agreement between the Board, acting for the City, and
Wrecker Works when Randle did not add Wrecker Works to the rotation list
immediately.
       To establish a claim for tortious interference with business relations, a
plaintiff must show:
       (1) The acts were intentional and willful; (2) The acts were
       calculated to cause damage to the plaintiffs in their lawful
       business; (3) The acts were done with the unlawful purpose of
       causing damage and loss, without right or justifiable cause on the
       part of the defendant (which constitutes malice); (4) Actual
       damage and loss resulted. 36
Under this conjunctive test, “[i]f any of the factors are not met, there cannot be
a finding of tortious inference with business.” 37
       Wrecker Works cannot establish that Chief Randle’s delay in adding
Wrecker Works to the rotation list was “without right or justifiable cause.” If
the without-right-or-justifiable-cause requirement is not satisfied, any
interference with business relations, however intentional, is not, in fact,
tortious. 38 For example, a landowner who intentionally blocked a parking lot
that he owned because he was annoyed with noise from a neighboring saloon
did not tortiously interfere with business relations because he acted within his

       36 Biglane v. Under The Hill Corp., 949 So. 2d 9, 16 (Miss. 2007) (quoting MBF Corp.
v. Century Bus. Comms., Inc., 663 So. 2d 595, 598 (Miss. 1995)).
       37 Id.
       38 Id.

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rights as a property holder. 39 In this case, Chief Randle did not act outside of
the legal rights attached to his position. Under the original wrecker ordinance,
a wrecker service was required to comply with certain requirements that were
not met by Wrecker Works. The Board’s vote to place Wrecker Works on the
list was not in compliance with this ordinance. There was at least justifiable
cause for the Chief of Police to question the Board’s authority. Under the
subsequent ordinance, the Chief of Police was in charge of the process, and the
ordinance did not indicate that a delay of three days in placing an approved
towing/wrecker service on the list was unreasonable.
                                 *       *       *
      For the foregoing reasons, we AFFIRM the judgment of the district court.

      39   Id.
                                       14