Green v. State Bar of Texas

Decision Date04 August 1994
Docket NumberNo. 93-1587,93-1587
Citation27 F.3d 1083
Parties65 Empl. Prac. Dec. P 43,264, 1994-2 Trade Cases P 70,675 Bennie GREEN, d/b/a Eagle Consulting Firm, Plaintiff-Appellant, v. STATE BAR OF TEXAS, Unauthorized Practice of Law Committee, et al., Defendants, Mark Ticer, Individually, et al., Defendants-Appellees.
CourtU.S. Court of Appeals — Fifth Circuit

Roger Fuller, Steven L. Eason, Dallas, TX, for appellant.

Joe C. Tooley, Elizabeth J. Lewis, McCauley, MacDonald, Love & Devin, Dallas, TX, for State Farm Ins. Companies.

Dennis L. Roosien, Jr., Wayne B. Mason, P. Michael Jung, Strasburger & Price, Dallas, TX, for Travelers.

Linda A. Acevedo, Asst. Gen. Counsel, Austin, TX, for Blume, Ticer, et. al.

David A. Harris, Arlen D. "Spider" Bynum, Dallas, TX, for Rodney D. Young Ins. Co.

Appeal from the United States District Court for the Northern District of Texas.

Before POLITZ, Chief Judge, DUHE and BARKSDALE, Circuit Judges.

DUHE, Circuit Judge:

Appellant, Bennie Green, d/b/a Eagle Consulting Firm, appeals from the district court's grant of Appellees' motions to dismiss under Federal Rule of Civil Procedure 12(b)(6). Appellant sued several state and private actors under 42 U.S.C. Secs. 1981, 1983, 1985(3), 1986 and the Sherman Antitrust Act, 15 U.S.C. Sec. 1. We affirm.

BACKGROUND

Bennie Green, d/b/a Eagle Consulting Firm, is an insurance adjuster licensed by the state of Texas. In August 1991, the Unauthorized Practice of Law Committee (UPLC), acting under the authority granted to it by Texas Government Code Sec. 81.102(a), sued Green to prevent him from engaging in the unauthorized practice of law. After a hearing in August 1991, the state district court issued a temporary injunction against Green. On November 5, 1991, the state district court converted the temporary injunction to a permanent injunction. Because Green was not a party to the November 5 proceeding, the state district court vacated the permanent injunction and reinstated the temporary injunction.

In response, Green filed this action against the UPLC; Mark Ticer, legal counsel for the UPLC; James Blume, chairman of the

UPLC; State Farm Insurance Company; Travelers Insurance Company and Rodney D. Young Insurance Agency. In December 1992, the district court granted all defendants' motions to dismiss under Rule 12(b)(6), but granted Green leave to amend his complaint. Green filed an amended complaint, but because he failed to correct the deficiencies of his original complaint, the district court again granted the defendants' motions to dismiss. Green appeals.

DISCUSSION
I. Standard of Review

We review a Rule 12(b)(6) dismissal de novo. We must accept all well-pleaded facts as true, and we review them in the light most favorable to the plaintiff. We may not look beyond the pleadings. A dismissal will not be affirmed if the allegations support relief on any possible theory. McCartney v. First City Bank, 970 F.2d 45, 47 (5th Cir.1992).

II. Section 1981 Claims

In his complaint, Appellant alleges that he entered into contracts with his clients to negotiate settlements of their insurance claims with State Farm. Appellant argues that State Farm refused, solely because of his race, 1 to honor his client contracts in violation of 42 U.S.C. Sec. 1981. 2

To establish a claim under Sec. 1981, a plaintiff must allege facts in support of the following elements: (1) the plaintiff is a member of a racial minority; (2) an intent to discriminate on the basis of race by the defendant; and (3) the discrimination concerns one or more of the activities enumerated in the statute. See Mian v. Donaldson, Lufkin & Jenrette Secs. Corp., 7 F.3d 1085, 1087 (2d Cir.1993). The "enumerated activity" implicated in this case is the right to "make and enforce contracts."

In Patterson v. McLean Credit Union, 491 U.S. 164, 109 S.Ct. 2363, 105 L.Ed.2d 132 (1989), 3 the Supreme Court explained what is meant by "make and enforce contracts": "Section 1981 cannot be construed as a general proscription of racial discrimination in all aspects of contract relations, for it expressly prohibits discrimination only in the making and enforcement of contracts." Id. at 176, 109 S.Ct. at 2372. The Court further elaborated that the making of contracts extended only to the formation of a contract and not to problems that may arise later. Id. The second protection regarding enforcement of contracts "prohibits discrimination that infects the legal process in ways that prevent one from enforcing contract rights, by reason of his or her race, and this is so whether this discrimination is attributed to a statute or simply to existing practices." Id. at 177, 109 S.Ct. at 2373.

Appellant has failed to allege facts in his complaint that place him in the ambit of protection under Sec. 1981 as defined by the Supreme Court in Patterson. Appellant has not complained that State Farm refused to contract with him or that State Farm somehow impeded his right to enforce a contract in either the courts or nonjudicial avenues. All he alleges is that State Farm refused to honor a third-party contract he had with his clients. Thus, Appellant has failed to allege

how State Farm could have discriminated against Appellant in the formation or enforcement of any contract. Accordingly, Appellant has presented no viable claim upon which relief can be granted under Sec. 1981.

III. Antitrust Claims

Appellant asserts that the defendants violated Sec. 1 of the Sherman Antitrust Act, 15 U.S.C. Sec. 1. 4 Section 1 of the Sherman Antitrust Act forbids contracts, combinations, or conspiracies in restraint of trade or commerce. 15 U.S.C. Sec. 1. To prevail on a Sec. 1 Sherman Antitrust Act claim, Appellant must show that the defendants' conspiracy produced some anti-competitive effect in the relevant market. See Kiepfer v. Beller, 944 F.2d 1213, 1221 (5th Cir.1991). Appellant may not just show that defendants' actions injured him but must also demonstrate that the defendants' actions unreasonably restrained competition. Id.

Appellant first alleges that Ticer conspired with the other defendants to cause Appellant's clients to breach their contracts with Appellant so that they might enter into contracts for representation with Ticer and other members of the State Bar of Texas. Appellant also alleges that defendants 5 in pursuit of a conspiracy forced him to cease doing business. Such allegations do not sufficiently state a claim under Sec. 1 as they demonstrate no unreasonable restraint of competition in a relevant market.

Appellant's final antitrust allegation involves only the UPLC and Ticer. Appellant alleges that the UPLC and Ticer were part of a conspiracy to fix the price of representation in insurance negotiations and to preclude Appellant and other insurance adjusters from competing in interstate commerce. The only specific averment of a possible agreement between UPLC and Ticer involves the institution of the suit against Appellant for the unauthorized practice of law. The UPLC is a state agency, Krempp v. Dobbs, 775 F.2d 1319, 1321 n. 1 (5th Cir.1985), that is authorized to pursue actions against those allegedly engaged in the unauthorized practice of law. Texas Gov't Code Ann. Sec. 81.102(a) (West 1988). Ticer was the agency's counsel in the action against Appellant. Accordingly, Ticer and the UPLC are immune from an antitrust suit under the state action doctrine. See Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943); Benton, Benton & Benton v. Louisiana Pub. Facilities Auth., 897 F.2d 198 (5th Cir.1990), cert. denied, 499 U.S. 975, 111 S.Ct. 1619, 113 L.Ed.2d 717 (1991).

IV. Monetary Damages Under Section 1983

Green asserts claims for monetary damages under 42 U.S.C. Sec. 1983 against all defendants. To state a cause of action under Sec. 1983, Appellant must allege that some person, acting under state or territorial law, has deprived him of a federal right. Gomez v. Toledo, 446 U.S. 635, 100 S.Ct. 1920, 64 L.Ed.2d 572 (1980); Auster Oil & Gas, Inc. v. Stream, 764 F.2d 381, 387 (5th Cir.1985), cert. denied, 488 U.S. 848, 109 S.Ct. 129, 102 L.Ed.2d 102 (1988).

A. UPLC, Blume and Ticer

The Eleventh Amendment generally divests federal courts of jurisdiction to entertain suits directed against states. Port Auth. Trans-Hudson Corp. v. Feeney, 495 U.S. 299, 304, 110 S.Ct. 1868, 1871, 109 L.Ed.2d 264 (1990). That amendment may not be evaded by suing state employees in their official capacity because such an indirect pleading device remains in essence a claim upon the state treasury. Stem v. Ahearn, 908 F.2d 1, 3 (5th Cir.1990), cert. denied, 498 U.S. 1069, 111 S.Ct. 788, 112 L.Ed.2d 850 (1991). State officials sued in their official capacity are not deemed "persons" subject to suit within the meaning of Sec. 1983. Id. at 4. Accordingly, Appellant's

claims under Sec. 1983 against the UPLC, a state agency, and Blume and Ticer in their official capacities, must be dismissed.

B. Ticer

Appellant alleges that Ticer caused a temporary restraining order to be issued under Texas Government Code Sec. 81.102(a) in violation of his constitutional rights. Appellant also asserts that Ticer had the state district court issue a temporary injunction without giving him notice. Finally, Appellant alleges that Ticer used his position as legal counsel for the UPLC to attempt to interfere with Appellant's business.

In Imbler v. Pachtman, 424 U.S. 409, 96 S.Ct. 984, 47 L.Ed.2d 128 (1976), the Supreme Court held that prosecutors were absolutely immune from damages claims arising out of their activities. The Court reasoned that the need for absolute immunity arose from the "concern that harassment by unfounded litigation would cause a deflection of the prosecutor's energies from his public duties, and the possibility that he would shade his decisions instead of exercising the independence of judgment required by his public trust." Id. at 423, 96 S.Ct. at 991. The Supreme Court, applying a functional approach...

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