Court Opinion

ID: 7804640
Source: CourtListenerOpinion
Date Created: 2022-08-30 00:00:22.223575+00
Date Added: 2024-06-11T16:29:52.712719
License: Public Domain

Case: 21-20678     Document: 00516451386          Page: 1    Date Filed: 08/29/2022

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

                                                                            FILED
                                                                      August 29, 2022
                                   No. 21-20678
                                                                       Lyle W. Cayce
                                                                            Clerk

   Dennis Laviage,

                                                             Plaintiff—Appellee,

                                       versus

   Jesse E. Fite,

                                                         Defendant—Appellant.

                  Appeal from the United States District Court
                      for the Southern District of Texas
                            USDC No. 4:20-CV-84

   Before King, Duncan, and Engelhardt, Circuit Judges.
   Stuart Kyle Duncan, Circuit Judge:
          Dennis Laviage was prosecuted for knowing failure to report scrap
   metal transactions to the Texas Department of Public Safety, as required by
   state law. A jury acquitted him. Laviage then sued Houston Police Sergeant
   Jesse Fite, claiming Fite had provided false information that led to Laviage’s
   arrest and prosecution. See Franks v. Delaware, 438 U.S. 154 (1978). The
   district court, concluding Fite’s affidavit omitted material facts, denied him
   qualified immunity. We reverse and render judgment for Fite.
Case: 21-20678          Document: 00516451386             Page: 2      Date Filed: 08/29/2022

                                           No. 21-20678

                                                I.
           Dennis Laviage is president and CEO of C&D Scrap Metal in
   Houston, Texas. 1 C&D’s operations are governed by the Texas Occupations
   Code §§ 1956.001 et seq., and City of Houston ordinances. These require
   metal recycling entities to report certain transactions. C&D uses Scrap
   Dragon, a computer program, to generate reports and send them to the Texas
   Department of Public Safety (“DPS”), as required by § 1956.036, 2 and to a
   national investigation system called Leads Online, as required by a directive
   of the Houston Police Department’s Metal Theft Unit. After a 2015 software
   update, Scrap Dragon continued to generate the city-mandated reports but
   sometimes failed to generate the state-mandated reports.
           In August 2015, Sergeant Jesse Fite, a Houston Police Department
   officer in charge of the Metal Theft Unit, learned of C&D’s reporting
   discrepancies and confronted Laviage. Laviage explained the software glitch
   and represented that C&D was working to resolve the issue. Unable to fix the
   problem, C&D personnel began recording data for scrap metal purchases and
   filing the reports with DPS manually as missed reports were discovered. All
   purchases were timely reported to the City of Houston through Leads
   Online. But Fite discovered approximately twenty-four C&D reports that
   had not been filed with DPS.
           Relying on these missing reports, Fite persuaded an assistant district
   attorney to file a criminal information against Laviage in March 2016. Fite’s
   supporting affidavit did not include information about Scrap Dragon’s

           1
             We take the facts from Laviage’s first amended complaint, accepting all well-
   pleaded facts as true and viewing them in the light most favorable to Laviage. Johnson v.
   Halstead, 916 F.3d 410, 414 n.1 (5th Cir. 2019) (citation omitted).
           2
               Unless otherwise noted, statutory references are to the Texas Occupations Code.

                                                 2
Case: 21-20678       Document: 00516451386            Page: 3      Date Filed: 08/29/2022

                                       No. 21-20678

   software malfunctions. Laviage was arrested, charged with violating the state
   reporting requirements, and eventually tried before a jury. In August 2018,
   the jury found Laviage not guilty. A state judge signed an agreed order
   expunging all records of the prosecution.
          Laviage sued Fite under 42 U.S.C. § 1983, alleging Fite had violated
   his Fourth Amendment rights. 3 Specifically, Laviage contended that by
   “intentionally and willfully omitt[ing] critical and exculpatory facts” from
   his affidavit, Fite triggered the issuance of an arrest warrant that lacked
   probable cause, resulting in Laviage’s prosecution. Fite moved for judgment
   on the pleadings based on qualified immunity. The district court denied
   Fite’s motion. Fite appealed.
                                            II.
          “An order denying qualified immunity, to the extent it turns on an
   issue of law, is immediately appealable.” Morgan v. Swanson, 659 F.3d 359,
   370 (5th Cir. 2011) (en banc) (cleaned up). We review de novo the denial of a
   motion for judgment on the pleadings under Federal Rule of Civil Procedure
   12(c), applying the same standard for Rule 12(b)(6) motions to dismiss for
   failure to state a claim. Harmon v. Dallas Cnty., 927 F.3d 884, 892 (5th Cir.
   2019) (per curiam) (citation omitted). To survive a Rule 12(c) motion, “a
   complaint must contain sufficient factual matter, accepted as true, to state a
   claim to relief that is plausible on its face.” Waller v. Hanlon, 922 F.3d 590,
   599 (5th Cir. 2019) (cleaned up).

          3
           Laviage initially sued in state court, alleging only state tort claims. When he
   amended his complaint to include § 1983 claims, Fite timely removed the case to federal
   court.

                                             3
Case: 21-20678         Document: 00516451386              Page: 4       Date Filed: 08/29/2022

                                          No. 21-20678

                                               III.
           Qualified immunity protects public officials from liability if “their
   conduct does not violate clearly established statutory or constitutional rights
   of which a reasonable person would have known.” Pearson v. Callahan, 555
   U.S. 223, 231 (2009) (quoting Harlow v. Fitzgerald, 457 U.S. 800, 818
   (1982)). To overcome qualified immunity, the plaintiff must allege facts
   showing (1) the officer violated a constitutional right, and (2) “the right was
   ‘clearly established’ at the time of the challenged conduct.” Templeton v.
   Jarmillo, 28 F.4th 618, 621 (5th Cir. 2022) (quoting Ashcroft v. al-Kidd, 563
   U.S. 731, 735 (2011)). We may address either prong or both. Harmon, 927
   F.3d at 892.
                                               A.
           Under prong one, we ask whether Laviage alleged a Fourth
   Amendment violation. In Franks v. Delaware, the Supreme Court held an
   officer violates the Fourth Amendment if he deliberately or recklessly
   provides false information necessary to secure an arrest warrant. 438 U.S. at
   171; see also, e.g., Anokwuru v. City of Houston, 990 F.3d 956, 964 (5th Cir.
   2021). The elements of a Franks claim are: “(1) the affidavit supporting a
   warrant contained false statements or material omissions; (2) the affiant
   made such false statements or omissions knowingly and intentionally, or with
   reckless disregard for the truth; and (3) the false statements or material
   omissions were necessary to the finding of probable cause.” Davis v.
   Hodgkiss, 11 F.4th 329, 333 (5th Cir. 2021) (per curiam) (citations omitted). 4
   Laviage alleges only that Fite’s affidavit had a material omission—

           4
              Although “[t]he Franks case arose in the context of a search warrant, . . . its
   rationale extends to arrest warrants.” Terwilliger v. Reyna, 4 F.4th 270, 281 (5th Cir. 2021)
   (citation omitted).

                                                4
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                                          No. 21-20678

   specifically, it did not mention Scrap Dragon’s software malfunctions. 5 See,
   e.g., Melton v. Phillips, 875 F.3d 256, 264 (5th Cir. 2017) (en banc) (Franks
   liability may be premised on an officer’s “mak[ing] knowing and intentional
   omissions that result in a warrant being issued without probable cause”
   (citation omitted)). Had those computer glitches been noted, Laviage
   claimed, Fite’s affidavit would have been “insufficient to establish probable
   cause.” Davis, 11 F.4th at 333 (quoting Franks, 438 U.S. at 156).
           The district court agreed with Laviage. While the court’s reasoning is
   terse, it suggests the unmentioned Scrap Dragon glitch would have showed
   Laviage did not “intentionally and knowingly” fail to file reports. The court
   added that “[t]he jury’s decision to throw out the claims illustrates the
   baseless foundation for the initial charge.” On appeal, Fite argues the district
   court misinterpreted the reporting requirements. He also argues that, even
   had the computer problem been noted, his affidavit still would have
   established probable cause. We agree with Fite on both points.
           The Texas Occupations Code imposes various recordkeeping and
   reporting requirements on metal recycling entities. See, e.g., § 1956.001(7)
   (defining “metal recycling entity”); §§ 1956.033–.034 (recordkeeping);
   § 1956.036 (reporting). As relevant here, a person commits a Class A
   misdemeanor by “knowingly” failing—within two working days after a
   qualifying transaction—to “send an electronic transaction report to the
   department via the department’s Internet website.” §§ 1956.040(a-1),

           5
             Laviage also alleged the affidavit did not mention that Laviage submitted identical
   reports to the city through Leads Online. But, as the district court found, Fite’s affidavit
   did include this fact. According to the criminal information, Fite reported that “the
   regulated materials purchased by the businesses reported to Leads Online[,] an internet
   based company contracted by the City of Houston to collect transactions of scrap metal
   businesses[,] had not been reported to TxDPS[.]”

                                                5
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                                      No. 21-20678

   1956.036(a). 6 Alternatively, reports can be submitted “by facsimile” if a
   person applies for (and receives) a waiver based on “an affidavit stating that
   the entity does not have an available and reliable means of submitting the
   transaction report electronically.” § 1956.036(d).
          Contrary to the district court’s ruling, C&D’s computer problems
   were not material to whether probable cause existed to suspect Laviage had
   violated the reporting provisions. By his own admission, Laviage did not
   submit approximately twenty-four required reports to DPS. Laviage also
   knew Scrap Dragon was failing to send reports to DPS. His brief concedes
   that “in roughly August 2015,”—about seven months before his March 2016
   arrest—“Fite told Mr. Laviage about the reporting discrepancies.” Laviage
   also knew there was an alternate way of complying (fax), but never sought
   permission to use it. As Fite correctly argues, “according to Laviage’s
   pleadings, he continued to only submit the reports via Scrap Dragon despite
   knowing that Scrap Dragon was not meeting the reporting requirements
   under the statute and despite knowing there was a permissible reporting
   alternative.” Viewing these facts, an “objectively reasonable officer” could
   have concluded there was a “probability or substantial chance” that Laviage
   had violated the statute. District of Columbia v. Wesby, 138 S. Ct. 577, 586
   (2018) (cleaned up).
          In response, Laviage argues the Scrap Dragon glitch shows he did not
   “knowing[ly] and intentional[ly]” fail to report, but only did so
   “inadvertently.” We disagree. The statute punishes “knowing” failures, not
   “knowing and intentional” failures. See § 1956.040(a-1) (“A person commits
   an offense if the person knowingly violates Section . . . 1956.036(a).”

          6
            The offense is a “state jail felony,” however, if the person was previously
   convicted of violating the same subsection. § 1956.040(a).

                                            6
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                                          No. 21-20678

   (emphasis added)). 7 “Knowing” is a less culpable mental state than
   “intentional.” 8 Even taking Scrap Dragon’s foibles into account, one could
   reasonably believe Laviage knew that continuing to use the flawed system
   would result in reporting failures. See Tex. Pen. Code § 6.03 (one “acts
   knowingly . . . when he is aware that his conduct is reasonably certain to cause
   the result”). Indeed, one could think Scrap Dragon’s flaws made Laviage’s
   knowledge more, not less, likely. 9 He had been warned about the system’s
   deficiencies months before his arrest and yet failed to use the statutory safe
   haven. So, even had Fite mentioned the Scrap Dragon glitch, his affidavit still
   would have shown probable cause. See, e.g., Terwilliger v. Reyna, 4 F.4th 270,
   282 (5th Cir. 2021) (observing “[p]robable cause . . . turns ‘on the
   assessment of probabilities in particular factual contexts’” (quoting
   Maryland v. Pringle, 540 U.S. 366, 371 (2003))).
           In sum, Laviage failed to allege a Fourth Amendment violation.
                                                B.
           But even assuming a Fourth Amendment violation, the claimed right
   was not “‘clearly established’ at the time of the challenged conduct.”
   Templeton, 28 F.4th at 621 (quoting Ashcroft, 563 U.S. at 735). “[A] right is

           7
           The district court also thought the statute penalized only one who “intentionally
   and knowingly” failed to file required reports.
           8
            See Tex. Penal Code § 6.02(d)(1)–(2) (ranking “intentional” as a higher
   mental state than “knowing”); see also Howard v. State, 333 S.W.3d 137, 139 (Tex. Crim.
   App. 2011) (observing “knowingly” is a “less-culpable mental state” than
   “intentionally”).
           9
              The jury evidently did not think so, because it acquitted Laviage. The district
   court took this to undermine Fite’s affidavit: “The jury’s decision to throw out the claims
   illustrates the baseless foundation for the initial charge.” Not so. “[A]n acquittal does not
   necessarily signal an absence of probable cause for an arrest, for the standards for a
   determination of probable cause and for a criminal conviction markedly differ.” Brumfield
   v. Jones, 849 F.2d 152, 155 (5th Cir. 1988).

                                                7
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                                      No. 21-20678

   clearly established only if it is sufficiently clear that every reasonable official
   would have understood that what he is doing violates that right.” Betts v.
   Brennan, 22 F.4th 577, 584 (5th Cir. 2022) (cleaned up). The right must be
   framed “with specificity and granularity,” Morrow v. Meachum, 917 F.3d 870,
   874–75 (5th Cir. 2019), not “at a high level of generality,” Betts, 22 F.4th at
   584 (citation omitted). Accordingly, qualified immunity shields officers
   “unless existing precedent ‘squarely governs’ the specific facts at issue,”
   Kisela v. Hughes, 138 S. Ct. 1148, 1153 (2018) (citation omitted), such that the
   question has been placed “beyond debate,” Ashcroft, 563 U.S. at 741.
          Instead of engaging this prong of the analysis, the district court only
   recited the general contours of Franks liability. Much more is needed. See id.
   at 742 (“We have repeatedly told courts . . . not to define clearly established
   law at a high level of generality.” (citation omitted)). For his part, Laviage
   argues he need not identify a squarely-governing precedent because Fite’s
   Franks violation was “obvious.” We disagree. It is far from obvious that the
   Scrap Dragon malfunction was “material” to probable cause. See supra. To
   be sure, “[t]he law can be clearly established ‘despite notable factual
   distinctions between the precedents relied on and the cases then before the
   Court, so long as the prior decisions gave reasonable warning that the
   conduct then at issue violated constitutional rights.’” Kinney v. Weaver, 367
   F.3d 337, 350 (5th Cir. 2004) (en banc) (quoting Hope v. Pelzer, 536 U.S. 730,
   740 (2002)). But that provides no relief where, as here, Laviage fails to
   “identify a single case to support [his] argument” and the “the district court
   d[oes] not fix [that failure]” or “assess the clearly established law
   applicable.” Joseph v. Bartlett, 981 F.3d 319, 345–46 (5th Cir. 2020). In any
   event, this situation is nothing like cases involving violations so blatant that
   officers need no on-point precedent to know their conduct is illegal. Cf., e.g.,
   Hope, 536 U.S. at 739–41, 745 (denying qualified immunity despite no
   “materially similar” precedent, given “[t]he obvious cruelty inherent” in

                                           8
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                                       No. 21-20678

   handcuffing a prisoner to a post for seven hours in the sun); Taylor v. Riojas,
   141 S. Ct. 52, 53 (2020) (per curiam) (denying qualified immunity without a
   materially similar case where prisoners were housed in “deplorably
   unsanitary conditions for . . . an extended period of time”).
          In sum, even assuming Laviage alleged a Fourth Amendment
   violation, the right was not clearly established at the time.
                                   *        *         *
          For either of the foregoing reasons, Fite was entitled to qualified
   immunity. We REVERSE the district court’s judgment and RENDER
   judgment for Fite.

                                            9