Court Opinion

ID: 813783
Source: CourtListenerOpinion
Date Created: 2012-12-18 17:09:42+00
Date Added: 2024-06-11T18:00:49.929352
License: Public Domain

FILED
                                                            United States Court of Appeals
                                                                    Tenth Circuit

                                                                December 18, 2012
                     UNITED STATES COURT OF APPEALS
                                                  Elisabeth A. Shumaker
                                                                    Clerk of Court
                                  TENTH CIRCUIT

 THE MEADOWS AT BUENA VISTA,
 INC., a Colorado corporation;
 LONESOME PINE HOLDINGS, LLC,
 a Colorado limited liability company,

                Plaintiffs - Appellants,

           v.                                            No. 12-1084
                                                        (D. Colorado)
 ARKANSAS VALLEY PUBLISHING                 (D.C. No. 1:10-CV-02871-MSK-KMT)
 COMPANY,

                Defendant - Appellee,

 and

 TOWN OF BUENA VISTA,
 COLORADO; CARA RUSSELL,

                Defendants.

                              ORDER AND JUDGMENT *

Before HARTZ, BALDOCK, and GORSUCH, Circuit Judges.

       *
        This order and judgment is not binding precedent except under the
doctrines of law of the case, res judicata, and collateral estoppel. It may be cited,
however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th
Cir. R. 32.1.
      The Meadows at Buena Vista, Inc. (Meadows) unsuccessfully attempted to

obtain approval from the Town of Buena Vista (the Town) for a proposed

municipal annexation of a tract that Meadows planned to develop. Meadows sued

the Town and its mayor, Cara Russell, on various causes of action, including

tortious and unconstitutional obstruction of its development plans, and it sued the

publisher of the local newspaper, Arkansas Valley Publishing Company (the

Publisher), for aiding and abetting the mayor’s constitutional violations and

conspiring with the mayor to commit those violations. It settled with the Town

and mayor, but the district court, after dismissing Meadows’ first amended

complaint, denied Meadows’ motion to file a proposed Third Amended Complaint

because it did not state a cause of action against the Publisher, and dismissed the

Publisher with prejudice. Meadows appeals the dismissal, arguing that the

proposed Third Amended Complaint stated a claim because it properly alleged an

agreement between the Publisher and the mayor. Exercising jurisdiction under

28 U.S.C. § 1291, we affirm. We agree with the district court’s ruling, not

adequately challenged by Meadows on appeal, that the proposed complaint failed

to allege constitutional violations by the mayor.

I.    BACKGROUND

      A.     Facts

      In 2005 Meadows began discussions with the Town concerning the

development and annexation of a 274-acre tract of land west of the Town.

                                        -2-
Petitions for annexation are presented to the Town trustees. At the time, the six

trustees included Russell.

      The Town code provides that, absent waiver by the trustees, an annexation

applicant must either dedicate water rights to the Town as a condition of

annexation or, at the Town’s option, make cash payments to the town for the

purchase of water rights. The Town initially insisted that Meadows dedicate the

water rights it had to the land to be annexed. In late 2005 and early 2006,

however, the Town expressed its willingness to agree to a plan involving cash

payments instead. But after a March 28, 2006, Town meeting, the Town again

insisted that any annexation be conditioned on the dedication of water rights.

About this time, Russell was elevated from trustee to mayor.

      In late 2006 two trustees resigned, and new trustees were elected. Shortly

after they took office, the Town and Meadows entered into a pre-annexation

agreement permitting Meadows to pay the town cash in lieu of dedicating water

rights. The trustees unanimously approved an annexation and development

agreement on March 25, 2008. Russell did not vote because the mayor is not

entitled to vote on annexations. Four citizens circulated a petition for a

referendum to overturn the trustees’ approval of the plan. See Colo. Rev. Stat.

§ 31-12-107(2)(a) (2010) (authorizing petitions for referenda). In response,

Meadows voluntarily withdrew its agreements and requested the trustees to

conduct a public hearing at which the petitioners could express their concerns.

                                         -3-
When no citizens attended the hearing, the trustees again approved the project on

September 5, 2008, this time with one dissenting vote. The Town and Meadows

agreed to preempt another citizen-filed referendum petition by placing the matter

on the November 4, 2008, ballot. On October 28 the trustees adopted a resolution

endorsing the ballot measure. Russell neither voted nor expressed an opinion at

either the September 5 or October 28 meeting.

      Sometime before the November 4 election, Russell submitted an opinion

column to the Publisher to run in the local newspaper, the Chaffee County Times.

The column encouraged citizens to vote against approval of Meadows’ project,

suggesting that the risks to the community from approving the development

outweighed the potential benefits. The Publisher printed the column on

October 30. Voters defeated approval of Meadows’ project by a margin of 23

votes out of nearly 1,600 cast.

      Meadows asserts that the Publisher opposed approval of the project and that

it cooperated with Russell to ensure its defeat. It alleges that the Publisher failed

to report on (1) alleged conflicts of interest resulting from Russell’s connection to

Dean Hiatt, a competing developer, and (2) the Town’s favoritism toward Hiatt’s

development company. Moreover, Meadows alleges that the Publisher ran

Russell’s column on the Sunday immediately preceding the Tuesday election,

instead of on the previous Sunday, to deprive Meadows of the opportunity to

respond.

                                          -4-
      B.     Procedural History

      On November 3, 2010, Meadows filed a complaint in Colorado state court

alleging multiple claims against the Town and Russell. It also alleged a claim

against the Publisher for aiding and abetting Russell’s “overall illegal, tortious

and unconstitutional conduct.” Aplt. App. at 42 (Compl. at 17, Meadows at

Buena Vista, Inc. v. Town of Buena Vista, et al., No. 2010 CV 149 (Colo. Cnty.

Ct. Nov. 3, 2010)). On November 12 Meadows amended its complaint to add as a

plaintiff Lonesome Pine Holdings, LLC, which owned the land for the proposed

development. (Lonesome Pine’s claims were identical to Meadows’, so we need

not mention it further.) On November 23 the defendants removed the suit to the

United States District Court for the District of Colorado.

      A week after removal, the Publisher moved to dismiss the claim against it

under Fed. R. Civ. P. 12(b)(6) for failure to state a cause of action. Meadows

filed a response in opposition, followed by successive motions to amend the

complaint. Its proposed First Amended Complaint (which would actually have

been a second amended complaint), submitted for approval on February 7, 2012,

expanded the claim against the Publisher to five claims. Four claims were

unequivocally solely for civil-rights violations. Count 12 is entitled “Conspiracy

Against the [Publisher] to Violate Plaintiffs’ Civil Rights.” Id. at 155. Count 13

is entitled “Conspiracy Against the [Publisher] to Violate Plaintiffs’ Civil Rights

with Actual Malice.” Id. at 160. Count 14 is entitled “Aiding and Abetting

                                         -5-
Mayor Russell’s Violation of the Plaintiffs’ Civil Rights.” Id. at 161. And

Count 15 is entitled “Aiding and Abetting Mayor Russell’s Violation of the

Plaintiffs’ Civil Rights with Actual Malice.” Id. at 162. Count 16 was somewhat

ambiguous, bearing the title “Declaratory Judgment Against the [Publisher].” Id.

But the motion to amend resolved any ambiguity by stating: “Lastly, the Fifth

Claim is a declaratory judgment claim for violation of the plaintiffs’ civil rights

without a claim for damages as suggested by Judge Pierre N. Leval . . . .” Id. at

120 (Pls.’ Renewed Mot. to Amend Am. Compl. at 3, Meadows at Buena Vista,

Inc. v. Town of Buena Vista, No. 1:10-cv-02871-MSK-KMT (D. Colo. Feb. 7,

2011)). The proposed Third Amended Complaint stated the same claims,

although supplemented by additional factual allegations. In particular, the titles

of counts 12, 13, 14, and 15 still expressly stated that they were civil-rights

claims (in language essentially identical to the claims in the proposed First

Amended Complaint), and the language of Count 16, the declaratory-judgment

claim, was unchanged except for the paragraph numbering.

      On September 19, 2011, the district court granted the Publisher’s motion to

dismiss the amended complaint filed in November 2010. And two weeks later the

magistrate judge recommended that Meadows’ pending motion to file a Third

Amended Complaint be denied as moot in light of the district court’s dismissal of

the Publisher from the action.

                                          -6-
      On February 15, 2012, the district court adopted the magistrate judge’s

recommendation to deny the motion to amend, but for different reasons. It said

that Meadows’ motion to amend had not been mooted but concluded that the

proposed Third Amended Complaint had not adequately alleged a plausible

constitutional violation by Russell, rendering amendment futile. 1 First, it

explained that Meadows had failed to allege a protected property interest, as is

required for a due-process claim, because it did not allege a legitimate

expectation that the Town would approve its development plan. Even assuming a

protected interest, the court continued, Meadows failed to allege a deprivation of

either procedural or substantive due process with respect to that interest, because

it identified neither specific procedural requirements that had been denied (to

support its procedural-due-process claim) nor a conscience-shocking arbitrary

deprivation of property rights (to support its substantive-due-process claim).

Finally, the court observed that Meadows did not allege that Russell made the

decision to deny its application or that Russell’s actions caused the application to

be defeated, except for the conclusory assertion that the column caused the

referendum’s defeat. Thus, the court denied the motion to amend and dismissed

all claims against the Publisher with prejudice. See Op. & Order Following

      1
        The court ruled that Meadows’s claims also failed because they did not
adequately allege an agreement or concerted action between Russell and the
Publisher, or that Russell had acted under color of state law. Because we agree
with the court’s ruling on the underlying constitutional violations, we need not
consider these alternative bases.

                                         -7-
Recommendation by Mag. J., Meadows at Buena Vista, Inc., No. 1:10-cv-02871-

MSK-KMT (D. Colo. Feb. 15, 2012) (District Court Opinion).

      Meadows argues on appeal that the district court erred in not permitting it

to file the proposed Third Amended Complaint.

II.   DISCUSSION

      “Although Fed. R. Civ. P. 15(a) provides that leave to amend shall be given

freely, the trial court may deny leave to amend where amendment would be

futile.” Hertz v. Luzenac Grp., 576 F.3d 1103, 1117 (10th Cir. 2009) (internal

quotation marks omitted). We ordinarily review the denial of leave to amend for

abuse of discretion, but “[w]hen denial is based on a determination that

amendment would be futile, our review for abuse of discretion includes de novo

review of the legal basis for the finding of futility.” Id. (internal quotation marks

omitted). Because the district court based its finding of futility on the Third

Amended Complaint’s failure to state a claim that could survive a motion to

dismiss under Fed. R. Civ. P. 12(b)(6), we review that determination de novo.

      To survive a motion to dismiss under Fed. R. Civ. P. 12(b)(6), “a complaint

must contain enough allegations of fact, taken as true, to state a claim to relief

that is plausible on its face.” Al-Owhali v. Holder, 687 F.3d 1236, 1239 (10th

Cir. 2012) (internal quotation marks omitted). “A claim has facial plausibility

when the plaintiff pleads factual content that allows the court to draw the

reasonable inference that the defendant is liable for the misconduct alleged.” Id.

                                         -8-
at 1239–40 (internal quotation marks omitted). “Although we must accept as true

all factual allegations asserted in the complaint, dismissal is appropriate where

the well-pleaded facts do not permit the court to infer more than the mere

possibility of misconduct.” Id. at 1240 (internal quotation marks omitted).

      Counsel for Meadows suggested at oral argument that the proposed Third

Amended Complaint had stated a claim against the Publisher for conspiring with

or aiding and abetting Russell in acts of tortious interference with contract. But,

as previously summarized, Counts 12, 13, 14, and 15 have always been expressly

limited to civil-rights claims, and the initial motion to add count 16 explained

unambiguously that it was solely a civil-rights claim. Moreover, the district

court’s decision refusing to permit filing of the Third Amended Complaint

stated that the declaratory-judgment claim “is repetitive of” the four other claims

challenged, Aplt. App. at 451 (District Court Opinion at 20), and Meadows’ briefs

on appeal do not confront the district court’s characterization of this claim. We

therefore reject Meadows’ suggestion at oral argument that it raised common-law

claims against the Publisher. Cf. Robbins v. U.S. Bureau of Land Mgmt., 438

F.3d 1074, 1086–87 (10th Cir. 2006) (appellant waived argument that was not

adequately briefed but raised for first time at oral argument).

      We turn now to Meadows’ claims that the Publisher conspired with Russell

in violating Meadows’ civil rights. Like the district court, we construe these

claims as arising under 42 U.S.C. § 1983. “To state a claim under 42 U.S.C.

                                         -9-
§ 1983 a plaintiff must allege the violation of a right secured by the Constitution

and laws of the United States, and must show that the alleged deprivation was

committed by a person acting under color of state law.” Hall v. Witteman,

584 F.3d 859, 864 (10th Cir. 2009) (brackets and internal quotation marks

omitted). Because the Publisher is a private entity, Meadows must plead that

Russell committed a constitutional violation. See Wilson v. Price, 624 F.3d 389,

394 (7th Cir. 2010) (private citizen may not be liable under § 1983 unless he or

she becomes a public officer pro tem or conspires with respect to a constitutional

violation by a public employee).

      We hold that the judgment of the district court must be affirmed on the

ground that Meadows did not adequately plead that Russell had violated its

constitutional rights. To begin with, Meadows’ opening brief on appeal does not

challenge the district court’s conclusions regarding Russell’s alleged

constitutional violations. In its reply brief, Meadows asserts that such a challenge

was unnecessary because the issue of underlying due-process deprivations was

actually “resolved adversely to [the Publisher] in the district court.” Aplt. Reply

Br. at 12 (emphasis added). It points to the magistrate judge’s March 18, 2011,

report and recommendation that Meadows be allowed to amend its claims against

Russell but not its claims against the Publisher; in that recommendation the

magistrate judge opined “that Plaintiffs have alleged sufficient facts to state a

claim” that Russell had violated Meadows’ civil rights. Aplt. App. at 212

                                         -10-
(internal quotation marks omitted) (Recommendation of U.S. Mag. J. at 7,

Meadows at Buena Vista, Inc., Civ. A. No. 10-cv-02871-MSK-KMT (D. Colo.

Mar. 18, 2011)). Meadows argues that because the Publisher did not object to

this recommendation, the firm-waiver rule precludes the Publisher from arguing

on appeal that Meadows did not adequately plead constitutional violations. See

Cohen v. Longshore, 621 F.3d 1311, 1318 (10th Cir. 2010) (under firm-waiver

rule, “failure to make timely objections to the [magistrate judge’s] findings or

recommendations waives appellate review of both factual and legal questions”

(internal quotation marks omitted)).

      But even if the district court had previously endorsed the magistrate judge’s

view that the amended complaint adequately alleged constitutional violations by

Russell, a district court is not bound by its own rulings made before final

judgment. See Nw. Cent. Pipeline Corp. v. JER P’ship, 943 F.2d 1219, 1225

(10th Cir. 1991) (“Until final decree the court always retains jurisdiction to

modify or rescind a prior interlocutory order.” (internal quotation marks

omitted)); 18B Charles Alan Wright, Arthur R. Miller & Edward H. Cooper,

Federal Practice and Procedure § 4478.1, at 692 (2d ed. 2002) (“[U]ntil the court

expressly directs entry of final judgment, an order that resolves fewer than all of

the claims among all of the parties ‘is subject to revision at any time before the

entry of judgment adjudicating all the claims and the rights and liabilities of all

the parties.’” (quoting pre-restyling version of Fed. R. Civ. P. 54(b) (2002))).

                                         -11-
And the district court’s final decision made clear that it was addressing the issue

afresh. It wrote:

             Because review of Plaintiff’s Motion to Amend and proposed
      Third Amended Complaint is de novo, the referent is not this Court’s
      prior ruling addressing prior proposed amendments to a prior
      complaint. Rather, the issue is whether the proposed Third Amended
      Complaint contains sufficient factual allegations that, taken as true,
      state plausible claims against [the Publisher].

Aplt. App. at 441 (District Court Opinion at 10). Because Meadows failed to

challenge in its opening brief the district court’s ruling that it had not adequately

alleged that Russell violated the Publisher’s constitutional rights, Meadows

waived the opportunity to contest the ruling. See United States v. De Vaughn,

694 F.3d 1141, 1154–55 (10th Cir. 2012) (“It is well-settled that arguments

inadequately briefed in the opening brief are waived.” (internal quotation marks

omitted)).

      Further, even had Meadows not waived the argument that its Third

Amended Complaint alleged underlying constitutional violations by Russell, we

are not persuaded by the argument. As we read the proposed Third Amended

Complaint, it attempts to state a violation of constitutional due process by

alleging (1) that Russell refused to recuse herself from the annexation application

process despite her alleged conflict of interest, and (2) that the application

process was “quasi-judicial” in nature and her writing an opinion column for the

local newspaper “delegated to herself the opportunity to make an ex parte closing

                                         -12-
argument.” Aplt. App. at 313 (Third Am. Compl. at 44, Meadows at Buena Vista,

Inc., Civ. A. No. 10-cv-02871-MSK-KMT (D. Colo. July 14, 2011)).

      Neither of Meadows’ theories passes muster. Even if Russell labored under

a conflict of interest, her participation in the application process could not have

deprived Meadows of due-process rights because Russell did not possess any

official authority regarding Meadows’ application. See Koch v. City of

Hutchinson, 814 F.2d 1489, 1495–96 (10th Cir. 1987) (plaintiff claimed that

demotion violated his constitutional rights; defendant city commissioners not

liable because the city code empowered the city manager, not the commissioners,

to take such actions), vacated and modified on other grounds, 847 F.2d 1436 (en

banc) (1988). As Meadows specifically pleaded, Russell was not entitled to vote

on the trustees’ decisions approving the application or adopting the resolution to

endorse the ballot measure, and she made no statements at the meetings at which

those votes were held.

      Likewise, Russell’s submission of an opinion column urging her

constituents to vote against the proposed development was protected speech.

Cf. Initiative & Referendum Inst. v. Walker, 450 F.3d 1082, 1099 (10th Cir. 2006)

(en banc) (“The First Amendment undoubtedly protects the political speech that

typically attends an initiative campaign, just as it does speech intended to

influence other political decisions.”). Freedom of speech on public issues is not

denied to those who may have reasons other than the public interest in favoring

                                         -13-
one position over another. Nor is it denied to those who may have greater

influence over public opinion than others do. We are aware of no authority, and

would be surprised to find any, supporting Meadows’ theory that such an

expression of opinion by a public official can constitute an “ex parte closing

argument” in violation of due-process rights.

III.   CONCLUSION

       We AFFIRM the district court’s judgment denying Meadows’ motion to

amend and dismissing Meadows’ claims against the Publisher with prejudice.

                                       ENTERED FOR THE COURT

                                       Harris L Hartz
                                       Circuit Judge

                                        -14-