Castellano v. Fragozo

• Citation: 352 F.3d 939
• Decision Date: 05 December 2003
• Docket Number: No. 00-50591.,00-50591.
• Parties: Alfred CASTELLANO, Plaintiff-Appellee, v. Chris FRAGOZO, Etc.; et al., Defendants, Chris Fragozo, Individually and in his Official Capacity as a San Antonio Police Officer; Maria Sanchez, Individually, Defendants-Appellants.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

352 F.3d 939

Alfred CASTELLANO, Plaintiff-Appellee, v. Chris FRAGOZO, Etc.; et al., Defendants, Chris Fragozo, Individually and in his Official Capacity as a San Antonio Police Officer; Maria Sanchez, Individually, Defendants-Appellants.

No. 00-50591.

United States Court of Appeals, Fifth Circuit.

Filed December 5, 2003.

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Timothy B. Soefje (argued), Thornton, Summers, Biechlin, Dunham & Brown, San Antonio, TX, for Plaintiff-Appellee.

Nathan Mark Ralls (argued), Chaves, Gonzales & Hoblit, San Antonio, TX, Audrey Mullert Vicknair, Chaves, Gonzalez & Hoblit, Corpus Christi, TX, for Fragozo.

Steven Norbert Harkiewicz (argued), Law Office of Steven N. Harkiewicz, San Antonio, TX, for Sanchez.

Appeals from the United States District Court for the Western District of Texas.

Before KING, Chief Judge, and JOLLY, HIGGINBOTHAM, DAVIS, JONES, SMITH, WIENER, BARKSDALE, EMILIO M. GARZA, DeMOSS, BENAVIDES, STEWART, DENNIS, CLEMENT and PRADO, Circuit Judges.

PATRICK E. HIGGINBOTHAM, Circuit Judge:

Today we examine our uncertain law attending a claim of malicious prosecution with its undisciplined mix of constitutional and state tort law. We decide that "malicious prosecution" standing alone is no violation of the United States Constitution, and that to proceed under 42 U.S.C. § 1983 such a claim must rest upon a denial of rights secured under federal and not state law.

Alfred Castellano sought damages for his wrongful conviction of arson, asserting claims under the First, Fourth, Fifth, Sixth, Eighth, and Fourteenth Amendments. Before trial the magistrate judge concluded that alleging the elements of malicious prosecution under Texas law stated a claim, but only under the Fourth Amendment. The trial judge passed over defendants' claim of absolute immunity, accepting their argument that the Supreme Court in Albright v. Oliver¹ held that if there is an adequate state tort remedy there can be no claim for a denial of due process, and dismissed all claims under any other constitutional provision. With the Texas law of malicious prosecution now the source for his § 1983 claim, Castellano amended his complaint, dropping his state law claim. A jury returned a substantial award of money damages.

We conclude that the trial court's reading of Albright, while clinging to the law of this circuit, simultaneously misread both the Fourth and Fourteenth Amendments. As for the Fourteenth Amendment claims, we reject the trial court ruling that there was no denial of due process, either in its primitive form that § 1983 cannot sustain such a claim, or because the state provides a post-deprivation tort remedy. We hold that a state's manufacturing of evidence and knowing use of that evidence along with perjured testimony to obtain a wrongful conviction deprives a defendant of his long recognized right to a fair trial secured by the Due Process Clause, a deprivation of a right not reached by the Parratt² doctrine. At the same time, we note that Castellano faces obstacles in pursuing his wrongful conviction claims on remand given that Sanchez and Fragozo enjoy absolute immunity for their testimony at trial and have substantial arguments that their manufacturing of evidence could not have created, without the trial testimony, a wrongful conviction.

Given that the district court dismissed the Fourteenth Amendment claims, albeit erroneously, the verdict cannot be sustained on the Fourth Amendment alone since it rests in part on events at trial — events not protected by the Fourth Amendment. It is not possible to separate the damages awarded for violations of the Fourth Amendment from those awarded for wrongful conviction. Nor can we sustain the verdict because the jury effectively decided the Fourteenth Amendment claim.

We begin by reciting the history of the case. We then examine the development of malicious prosecution as a claim under § 1983 — including the contours of the state law tort, its early development as a federal claim in this circuit, as well as the impact of Albright v. Oliver³ on this circuit's precedent. After examining our own law, we turn to the law of other circuits and conclude that "malicious prosecution" standing alone is no violation of the United States Constitution. We then return to the case at hand, and in doing so we examine Albright, finding no support there for the magistrate judge's ruling that by using the elements of the state tort of malicious prosecution, Castellano's full claim could be tethered to the Fourth Amendment. We conclude by finding that the verdict cannot be sustained and that the case must be remanded for a new trial.

I

All of this stems from a case drawn from the entangled lives of Alfred Castellano, Maria Sanchez, a trusted employee, and Chris Fragozo, a City of San Antonio police officer who did security work for Castellano's chain of fast order restaurants around the city of San Antonio called Fred's Fish Fry. Castellano worked for his father in starting the business, primarily offering fried catfish and chicken to go. There were three stores when his father died and eighteen on October 31, 1984, when one of the restaurants, Number 7, burned. By this time, Castellano's business was prospering and he held a prominent citizen's position on the Fire and Police Civil Service Commission, hearing appeals of police personnel from decisions of the Chief of Police.

Officer Castro, a veteran police officer and member of the Arson Squad, quickly determined that the fire had been intentionally set and was an "inside job." That it was arson has never been an issue. The investigation led to Castellano, largely on the testimony of Maria Sanchez and a tape recording she produced with a recorder supplied by Fragozo.

Castro and his partner took the case to the District Attorney, who prepared and, along with Castro, signed an affidavit. Castro presented the affidavit to a magistrate judge who issued an arrest warrant. Castro arrested Castellano, taking him to the police station. He was released a few hours later after being booked and facing an array of cameras. A later examining trial found probable cause to proceed. A grand jury indictment and trial followed. Castellano was convicted in a prominent jury trial by a state court jury in San Antonio and sentenced to five years probation.

Throughout Castellano denied involvement in the arson. His story was that he fired Maria when she refused to take a polygraph, a company policy when money was missing; that Maria and Fragozo were lovers; and that he had refused to give Fragozo a copy of a police examination Fragozo had to pass for promotion. Maria's story was that Castellano had sought her help in the arson and she taped conversations with him to protect herself if he did burn the restaurant.

In 1993, on his third habeas attempt, the Texas Court of Criminal Appeals set aside the conviction and remanded the case to the trial court. The District Attorney then dismissed the case for "lack of sufficient evidence," a predictable outcome given the findings of the state habeas judge adopted by the Texas Court of Criminal Appeals.

The findings included:

Chris Fragozo, a police officer with the City of San Antonio, attempted to enlist Clemencia Jiminez as a witness against Applicant and aided Maria Sanchez in altering the tape recordings offered into evidence. The tapes were altered to appear that the Applicant was admitting to the arson when in fact he had no knowledge of its commission.

Maria Sanchez and Chris Fragozo collaborated together and without their testimony and the altered tapes, there is insufficient evidence to sustain a finding of guilt in this case.⁴

Following the dismissal of charges, Castellano filed suit in the District Court of the 288th Judicial District, Bexar County, Texas, against Sanchez, Fragozo and Castro, in both their individual and official capacities, and the City of San Antonio. Castellano claimed in this § 1983 suit that defendants were guilty of malicious prosecution and had denied him rights secured by the First, Fourth, Fifth, Sixth, Eighth, and Fourteenth Amendments.

The case was removed to federal court and referred to a magistrate judge, where it was mired in pretrial proceedings over the next six years. During these proceedings, all defendants, except Castro, Sanchez, and Fragozo, were dismissed. And, critically, the magistrate judge's focus was upon the elements of the Texas law of malicious prosecution as sufficient to state a constitutional violation with little examination of particular violation beyond the conclusion that "malicious prosecution" could proceed only under the Fourth Amendment — but not the Fourteenth. This view simultaneously took out the Fourteenth Amendment and overlooked the limits of the Fourth, as we will explain. The case was tried to a seven-person jury, which returned a verdict awarding $3,000,000 in compensatory damages and $500,000 in punitive damages against Sanchez and Fragozo while exonerating Officer Castro. A divided panel of this court upheld the judgment entered on the verdict, and en banc review was granted.

The civil trial was a retrial of the criminal case. In large terms the jury was asked to decide whether Castellano was an arsonist or reasonably believed to be so, or rather, whether he was the victim of a conspiracy between Sanchez and Fragozo, joined by Castro, an ambitious cop. The jury plainly was persuaded that Castellano was the victim of Sanchez and Fragozo, but not Castro.

With only the Fourth Amendment claim left in the case, the trial court instructed the jury:

Castellano claims that Alfred Castro and Chris Fragozo, while acting under color of law, intentionally violated his constitutional right to due process by maliciously prosecuting him for the criminal offense of arson. Castellano further claims that Maria Sanchez, as an individual, intentionally violated the same constitutional right.

The jury was told that Castellano must...