Court Opinion

ID: 2795628
Source: CourtListenerOpinion
Date Created: 2015-04-22 00:01:20.837468+00
Date Added: 2024-06-11T11:29:15.551857
License: Public Domain

Case: 14-60397      Document: 00513013621         Page: 1    Date Filed: 04/21/2015

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

                                      No. 14-60397                           FILED
                                                                         April 21, 2015
                                                                        Lyle W. Cayce
NOATEX CORPORATION, a California Corporation,                                Clerk

              Plaintiff - Appellant

v.

KING CONSTRUCTION COMPANY OF HOUSTON, L.L.C., A Mississippi
limited liability company; ET AL,

                Defendants

JAMES M. HOOD, III, Mississippi Attorney General, State of Mississippi, ex
rel,

              Intervenor - Appellee

                 Appeal from the United States District Court for
                      the Northern District of Mississippi
                             USDC No. 3:11-CV-137

Before JOLLY, WIENER, and CLEMENT, Circuit Judges.
PER CURIAM:*

       * 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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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      The district court denied the motion for attorneys’ fees pursuant to 42
U.S.C. § 1988(b) filed by Plaintiff-Appellant Noatex Corporation (“Noatex”).
We affirm.
                          I. Facts and Proceedings
      Noatex contracted with former Defendants Carl King and King
Construction of Houston, LLC (“King Construction”) to provide labor and
materials for the construction of a new factory for Auto Parts Manufacturing
Mississippi (“APMM”) in Guntown, Mississippi. King Construction supplied
labor and materials, for which Noatex allegedly failed to pay. To secure the
disputed funds, King Construction served a “stop notice” on APMM pursuant
to Miss. Code Ann. § 85-7-181, which “bound” the disputed funds in the hands
of APMM as the owner of the property for which King Construction had
furnished labor and materials.
      Following service of the stop notice, Noatex filed a complaint in the
district court against Carl King and King Construction, seeking declaratory
relief under 28 U.S.C. § 2201. Noatex requested a declaration that the stop
notice had no legal effect against the funds “bound” in the hands of APMM
because the state’s stop notice procedure violated “federal constitutional due
process.”    The complaint did not name any state official as a defendant.
Neither did Noatex allege that, by virtue of serving the stop notice on APMM,
King Construction colluded with state actors or otherwise engaged in action
fairly attributable to the State of Mississippi.   Noatex’s prayer for relief
demanded “a judgment against King Construction Houston, LLC and all other
Defendants declaring that the Laborer’s and Materialman’s Lien and Stop
Notice, dated September 23, 2011, is void, invalid, and has no effect upon any
funds in the hands of Auto Parts Manufacturing Mississippi Inc. that are owed
to Noatex Corporation.”
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      As required by state statute, 1 the State of Mississippi intervened in the
action as a non-aligned party to defend the constitutionality of § 85-7-181.
Noatex filed a motion for summary judgment, asserting that the stop notice
statute lacked any of the minimum safeguards that due process requires to
accompany such a substantial deprivation of property.               The district court
granted Noatex’s motion, declaring the statute facially unconstitutional,
vacating the stop notice, and ordering that it have “no effect on the funds that
have been withheld by APMM.” We affirmed the district court’s judgment.
      Back in district court, the case was reassigned for resolution of Noatex’s
pending motion for § 1988 attorneys fees. The district court denied Noatex’s
motion, reasoning that not only did Noatex fail to plead § 1983 in its complaint,
but the substance of its complaint did not present a § 1983 claim. Noatex
timely appealed. In November, 2014, we granted the joint settlement motion
between Noatex and King Construction and Carl King, dismissing the King
parties from this appeal. The only remaining question is whether Noatex may
recover an award of § 1988(b) attorneys fees from Intervenor-Appellee the
State of Mississippi.
                                      II. Analysis
A.    Standard of review
      Section 1988(b) provides for an award of attorneys fees to prevailing
parties in civil rights cases: “In any action or proceeding to enforce a provision
of section[] . . . 1983 . . . of this title, . . . the court, in its discretion, may allow
the prevailing party, other than the United States, a reasonable attorney’s fee
as part of the costs.” 2 “We review a denial of § 1988 attorney’s fees for abuse

      1   MISS. CODE. ANN. § 7-5-1 (West 2012).
      2   42 U.S.C. § 1988(b).
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of discretion.” 3    When determining whether the district court abused its
discretion, we review the factual findings supporting the denial of attorneys
fees for clear error and the conclusions of law underlying the denial de novo. 4
In so doing, we keep in mind that, in the context of § 1988(b), “a prevailing
plaintiff   should ordinarily         recover     an   attorney’s fee unless special
circumstances would render such an award unjust.” 5
B.     Section 1988(b)
       Noatex brought its complaint under the Declaratory Judgment Act, 28
U.S.C. § 2201, and asserted federal question jurisdiction under 28 U.S.C.
§ 1331. Although the district court characterized its inquiry as whether the
stop notice statute affords Noatex sufficient procedural due process under the
Fifth and Fourteenth Amendments to the United States Constitution, the
court did not cite § 1983 in granting summary judgment. Only after obtaining
judgment in its favor did Noatex assert that § 1983 governed its cause of action
and therefore it was entitled to attorneys fees under § 1988(b). We address
whether the district court’s summary judgment in Noatex’s favor supports an
award of attorneys fees under § 1988(b).
       “The availability of attorneys’ fees under § 1988(b) is expressly limited
to actions or proceedings to enforce certain enumerated provisions of federal
law, including § 1983.” 6 We have not explicitly ruled whether failure to plead
§ 1983 pretermits our consideration of a plaintiff’s eligibility for § 1988(b)
attorneys fees. We held in Kirchberg v. Feenstra that the plaintiff could recover

       3 Sanchez v. City of Austin, 774 F.3d 873, 878 (5th Cir. 2014) (internal quotation marks
omitted) (quoting Dean v. Riser, 240 F.3d 505, 507 (5th Cir. 2001)).
       4 Id.
       5 Hous. Chronicle Pub. Co. v. City of League City, Tex., 488 F.3d 613, 623 (5th Cir.

2007) (internal quotation marks omitted) (quoting Hensley v. Eckerhart, 461 U.S. 424, 429
(1983)).
       6 Planned Parenthood of Hous. & Se. Tex. v. Sanchez, 480 F.3d 734, 738 (5th Cir. 2007).

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attorneys’ fees, even though she did not plead § 1983 in her complaint. At the
time the plaintiff filed her complaint however, § 1988 did not exist. Because
the plaintiff had “little reason” to hope she could obtain § 1988 fees by
amending her complaint, and because § 1983 provided a remedy for her claim,
we held that her failure to plead § 1983 in her complaint did not prevent her
from receiving attorneys fees. 7 Given the unique timing considerations in that
case, we limited our holding to the facts before us: “We do not mean to imply
that § 1988 fees are available in any action which could be brought under
§ 1983, or even in any action which could have been brought under § 1983 prior
to the enactment of § 1988.” 8
       Since our decision in Kirchberg, other courts have ruled that a prevailing
party may recover § 1988 fees without explicitly pleading § 1983: “The mere
failure to plead or argue reliance on § 1983 is not fatal to a claim for attorney’s
fees if the pleading and evidence do present a substantial Fourteenth
Amendment claim for which § 1983 provides a remedy, and this claim is related
to the plaintiff[’s] ultimate success.” 9 We agree and hold that a party may
recover § 1988(b) fees without pleading § 1983—if his complaint presents a
claim for which § 1983 affords succor. This holding accords with our
observation in Kirchberg that “the courts have taken an extremely liberal view
on nearly every interpretative question that has arisen under § 1988.” 10 It also

       7  Kirchberg v. Feenstra, 708 F.2d 991, 1000-01 (5th Cir. 1983).
       8  Id. at 1000 (emphasis supplied); see Espino v. Besterio, 708 F.2d 1002, 1008 n.9 (5th
Cir. 1983) (“We do not mean to imply in Feenstra that § 1988 fees are appropriate whenever
§ 1983 could have been pleaded, but was not . . . .”).
        9 Am. United for Separation of Church & State v. Sch. Dist. of City of Grand Rapids,

835 F.2d 627, 631 (6th Cir. 1987); see, e.g., Haley v. Pataki, 106 F.3d 478, 481 (2d Cir. 1997)
(holding that a plaintiff’s failure to plead § 1983 in its complaint does not preclude award of
attorneys’ fees under § 1988(b)).
        10 Kirchberg, 708 F.2d at 1000 (internal quotation marks omitted) (quoting Williams

v. Thomas, 692 F.2d 1032, 1036 (5th Cir. 1982)); see also Johnson v. City of Shelby, Miss., 135
S. Ct. 346, 346 (2014) (“[N]o heightened pleading rule requires plaintiffs seeking damages for
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complements the United States Supreme Court’s recent ruling in Johnson v.
City of Shelby, Mississippi, that a plaintiff need not explicitly plead his
constitutional claim against a municipality under § 1983 to survive a Rule
12(b)(6) motion, as long as the complaint alleges factual material that
sufficiently demonstrates that the claim has substantive plausibility. 11 We
therefore hold that Noatex may recover § 1988(b) attorneys’ fees if its pleadings
and the evidence present a substantial claim for which § 1983 affords relief.
C.      Section 1983
        Noatex sought a declaratory judgment that the stop notice served by
King Construction on APMM lacked legal effectiveness because it violated
“federal constitutional due process.”             On appeal, Noatex contends that
“everyone knew” that it was pursuing a lawsuit under § 1983, despite the fact
that Noatex did not (1) expressly plead § 1983 in its complaint, (2) sue any
state official, or (3) allege that King Construction acted under color of state
law.
         “To state a Fourteenth Amendment due process claim under § 1983, a
plaintiff must first identify a protected life, liberty, or property interest and
then prove that governmental action resulted in a deprivation of that
interest.” 12 The parties do not dispute that King Construction’s service of the
stop notice, which seized money allegedly due to Noatex, constitutes a
deprivation of a protected property interest. The question instead is whether

violations of constitutional rights to invoke § 1983 expressly in order to state a claim.”
(citations omitted)).
        11 Johnson, 135 S. Ct. at 347.
        12 Morris v. Livingston, 739 F.3d 740, 749-50 (5th Cir. 2014) (internal quotation marks

omitted) (quoting Gentilello v. Rege, 627 F.3d 540, 544 (5th Cir. 2010)).
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King Construction’s conduct in serving the stop notice constituted
governmental action sufficient to state a due process claim under § 1983. 13
        As noted, King Construction is a private party. “[P]rivate use of the
challenged state procedures with the help of state officials constitutes state
action.” 14   We consider two questions when determining whether private
conduct is fairly attributable to the State: (1) Does the claimed constitutional
deprivation result from “the exercise of some right or privilege created by the
State or by a rule of conduct imposed by the state or by a person for whom the
State is responsible,” and (2) Is the party charged with the deprivation fairly
described as a state actor? 15 With this framework in mind, we turn to the
record to see if it supports the conclusion that Noatex presented a substantial
claim for which § 1983 affords a remedy.
       With respect to the first prong, we hold that the claimed constitutional
deprivation—here, the encumbrance of funds effected by King Construction’s
service of the stop notice on APMM—results from “a rule of conduct imposed

       13   Noatex contends that we “necessarily” affirmed the district court’s alleged “finding”
of state action in our opinion affirming the district court’s judgment, referring to this isolated
language in the district court’s order: “Noatex has been completely deprived of the use of the
money; it has been held beyond Noatex’s control as a result of state action, i.e., use of the
procedures set forth by state statue.” This is the only reference to state action that appears
in the court’s order, and is neither preceded nor followed by any state action analysis. Had
the district court intended to hold that King Construction’s conduct constituted state action,
making it liable under § 1983, the court would have explicitly held so. And we held in Noatex
Corp. v. King Const. of Hous., L.L.C., that “[t]he stop notice statute allows attachment, and
therefore deprivation, by mere notice from a subcontractor without any intervention by a
government official.” 732 F.3d 479, 487 (5th Cir. 2013) (emphasis supplied). Accordingly, we
reject Noatex’s contention that we are bound by that alleged “finding” of state action. See
Alpha/Omega Ins. Servs., Inc. v. Prudential Ins. Co. of Am., 272 F.3d 276, 279 (5th Cir. 2001)
(“. . . the law of the case doctrine applies only to issues that were actually decided, rather
than all questions in the case that might have been decided, but were not” (citing Morrow v.
Dillard, 580 F.2d 1284, 1290 (5th Cir. 1978))).
         14 Lugar v. Edmonson Oil Co., 457 U.S. 922, 933 (1982).
         15 Id. at 937.

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by the State.” 16       We next turn to the second prong, viz., whether King
Construction’s service of the stop notice is fairly attributable to the state. 17 In
so doing, we remain mindful that our precedent and that of the Supreme Court
“has not been a model of consistency”—in part because the state action inquiry
is closely tied to the “peculiar facts and circumstances” present in each case. 18
The case at hand falls somewhere between the Court’s decisions in Lugar v.
Edmonson Oil Co. and Flagg Brothers, Inc. v. Brooks.
       In Flagg Brothers, the Court held that the defendant-creditor’s sale of
the plaintiff’s goods following her non-payment of storage fees, in accordance
with state statute, did not constitute state action sufficient to assert a § 1983
claim because the defendant acted on its own: “This total absence of overt
official involvement plainly distinguishes this case from earlier decisions
imposing procedural restrictions on creditors’ remedies . . . . ” 19 In Lugar, the
defendant relied on a state statute when applying to the county clerk for a writ
attaching the plaintiff’s property, which attachment was then executed by the
county sheriff.       In holding that state action existed in Lugar, the Court
distinguished Flagg Brothers on the ground that the “private use of the
challenged state procedures with the help of state officials constitutes state
action for purposes of the Fourteenth Amendment;” 20 and, noted its consistent

       16  See MISS. CODE ANN. § 85-7-181 (West 2013) (repealed 2014); Lugar, 457 U.S. at
937 (noting that the “rule of conduct” prong is satisfied by a state statute providing the right
to obtain prejudgment attachment, and the procedure by which the rights could be exercised).
        17 See Lugar, 457 U.S. at 937; see also id. (“Without a limit such as this, private parties

could face constitutional litigation whenever they seek to rely on some state rule governing
their interactions with the community surrounding them.”).
        18 Edmonson v. Leesville Concrete Co., 500 U.S. 614, 632 (1991) (O’Connor, J.,

dissenting).
        19 Flagg Bros., Inc. v. Brooks, 436 U.S. 149, 157 (1978) (emphasis supplied); see Lugar,

457 U.S. at 930 (“The Court concluded that the sale, although authorized by state law, did
not amount to state action under the Fourteenth Amendment . . . .”) (describing Flagg Bros.)
(emphasis supplied).
        20 Lugar, 457 U.S. at 933 (emphasis supplied).

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jurisprudence that “constitutional requirements of due process apply to
garnishment and prejudgment attachment procedures whenever officers of the
State act jointly with a creditor in securing the property in dispute.” 21 The
Court emphasized that “[c]areful adherence to the ‘state action’ requirement
preserves an area of individual freedom by limiting the reach of federal law
and federal judicial power . . . . [and] avoids imposing on the State, its agencies
or officials, responsibility for conduct for which they cannot be fairly blamed.” 22
       Within that framework, we are convinced that the facts alleged in
Noatex’s complaint fail to meet the second prong, i.e., that the “party charged
with the deprivation must be a person who may fairly be said to be a state
actor.” 23 Noatex’s complaint does not allege that state officials “act[ed] jointly
with [King Construction] in securing the property in dispute.” Instead, Noatex
alleges that “King Construction caused a [stop notice] to be filed in the records
of the Lee County Chancery Court . . . . King Construction also caused a copy
of the Stop Notice to be served upon APMM,” and, “King Construction filed and
served its [stop notice] . . . without obtaining any court ordered writ of
sequestration or garnishment.” 24             The only allegation concerning any
individual that might conceivably qualify as a state actor implicates the clerk
of the chancery court, who recorded the stop notice in the lis pendens record.
But, Noatex itself describes the clerk’s function in recording the notice as
“solely ministerial.”      In this sense, the case is essentially identical to Cobb v.
Saturn Land Co. 25 There, the United States Court Of Appeals for the Tenth

       21 Lugar, 457 U.S. at 932-33 (emphasis supplied) (citations omitted).
       22  Id. at 936; see Am. Mfrs. Mut. Ins. Co. v. Sullivan, 526 U.S. 40, 52 (1999) (“Action
taken by private entities with the mere approval or acquiescence of the State is not state
action.”) (citations omitted).
       23 See Lugar, 457 U.S. at 937.
       24 Emphasis supplied.
       25 966 F.3d 1334, 1337 (10th Cir. 1992).

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Circuit reasoned that “the actions of the county clerk, who merely accepted and
recorded the required lien material prepared by Defendant and then issued
filing notices to Plaintiff, were not substantial enough to bring Plaintiff’s claim
within the ambit of § 1983.” 26
       We acknowledge that the procedural scheme created by the stop notice
statute is the product of state action. But such a scheme is only addressed
properly in a § 1983 action “if the second element of the state-action
requirement is met as well.” 27           We cannot discern any state action from
Noatex’s pleadings or from the record. 28 This is so in part because Noatex did
not proceed under § 1983, obviating the need for Noatex to plead and meet its
evidentiary burden with respect to state action and for the district court to
analyze whether state action was present. And, although we are mindful that
the joint participation requirement need not entail anything more than
“invoking the aid of state officials to take advantage of state-created
procedures,” King Construction had to “make use of state procedures with the
overt, significant assistance of state officials” to qualify as state action

       26  Id. (emphasis supplied).
       27  Lugar, 457 U.S. at 941 (emphasis supplied).
        28 Noatex cites the Court’s observation in Lugar that, in three cases concerning

constitutional due process requirements in the context of garnishment actions, “[e]ach of
these cases involved a finding of state action as an implicit predicate of the application of due
process standards.” Appellant’s Brief at 11 (quoting Lugar, 457 U.S. at 927 (citing N. Ga.
Finishing, Inc. v. Di-Chem, Inc., 419 U.S. 601 (1975); Mitchell v. W.T. Grant Co., 416 U.S.
600 (1974); Fuentes v. Shevin, 407 U.S. 67 (1972))). Noatex ignores the latter half of the
Court’s analysis, which is that “Flagg Brothers distinguished [the cited cases] on the ground
that in each there was overt, official involvement in the property deprivation,” and, “there was
no such overt action by a state officer in Flagg Brothers.” Lugar, 457 U.S. at 927 (emphasis
supplied). So, although the cited cases assumed state action as an “implicit predicate” of the
application of due process standards, this assumption was tied to the existence of “overt,
official involvement in the property deprivation.” See Lugar, 457 U.S. at 927. We reject
Noatex’s reliance on this cherry-picked language to support its contention on appeal that we
“necessarily” decided state action.
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sufficient “to implicate the Due Process Clause” and § 1983. 29 Neither King
Construction’s service of the stop notice nor the chancery court clerk’s filing of
the stop notice in the lis pendens record bring Noatex’s claim within the ambit
of § 1983. 30 We therefore hold that Noatex did not present a substantial
Fourteenth Amendment claim for which § 1983 affords a remedy, so the district
court did not err in denying Noatex’s request for attorneys fees under §
1988(b). 31
                                       III. Conclusion
       Finally, an observation. Noatex makes much of the fact that because, in
its view, the case proceeded as if state action was pleaded and proved, we must
award § 1988 fees. We are troubled by this “gotcha” approach. 32 As Noatex
would have it, a plaintiff could sidestep the grunt work of pleading and proving
state action, then receive § 1988(b) attorneys’ fees at the conclusion of the case,

       29   See Tulsa Prof’l Collection Servs., Inc. v. Pope, 485 U.S. 478, 486 (1988) (“Private
use of state-sanctioned private remedies or procedures does not rise to the level of state action
. . . . But when private parties make use of state procedures with the overt, significant
assistance of state officials, state action may be found.”) (emphasis supplied).
         30 See Cobb, 966 F.2d at 1337; see also Haley, 106 F.3d at 482 (holding the plaintiffs

could recover § 1988(b) fees despite failing to plead § 1983 in their complaint because they
(1) sued the governor, a state official who is a person under § 1983, (2) the complaint
“sufficiently alleges that [the state official] acted under color of state law,” and (3) the
complaint alleged that defendants’ conduct deprived plaintiffs of their constitutional rights)
(emphasis supplied).
         31 We do not address Noatex’s other contentions raised on appeal: (1) the declaratory

judgment rendered Noatex a “prevailing party” for the purpose of § 1988(b), (2) the State of
Mississippi is liable for attorneys fees in its capacity as a non-aligned intervenor, and (3) the
State’s defense of the statute was unreasonable and without foundation.
         32 See Am. Mfrs. Mut. Ins. Co., 526 U.S. at 50 (“Perhaps hoping to avoid the traditional

application of our state-action cases, respondents attempt to characterize their claim as a
‘facial’ or ‘direct’ challenge to the utilization review procedures contained in the act . . . . [t]his
argument, however, ignores our repeated insistence that state action requires both an alleged
constitutional deprivation ‘caused by the exercise of some right or privilege created by the
State or by a rule of conduct imposed by the State or by a person for whom the State is
responsible,’ and that ‘the party charged with the deprivation must be a person who may
fairly be said to be a state actor.’” (quoting Lugar, 457 U.S. at 937)); see also Haley, 106 F.3d
at 482 (noting that the court required that the “plaintiffs meet the evidentiary burden of a
section 1983 claim” before awarding § 1988 fees).
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without the court ever analyzing the merits of the plaintiff’s putative § 1983
claim. We will not countenance such legalistic legerdemain.
     The judgment of the district court is AFFIRMED.

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