Blackburn v. City of Marshall

• Decision Date: 12 January 1995
• Docket Number: No. 93-5149,93-5149
• Citation: 42 F.3d 925
• Court: U.S. Court of Appeals — Fifth Circuit
• Parties: , 10 IER Cases 385 Jimmy BLACKBURN, Plaintiff-Appellant, v. MARSHALL CITY OF, et al., Defendants-Appellees.

Page 925

42 F.3d 925

63 USLW 2435, 10 IER Cases 385

Jimmy BLACKBURN, Plaintiff-Appellant, v. MARSHALL CITY OF, et al., Defendants-Appellees.

No. 93-5149.

United States Court of Appeals, Fifth Circuit.

Jan. 12, 1995.

Francine L. Wilkins and James Walter Hill, Anson, Maloney & Hill, Austin, TX, for appellant.

Jason R. Searcy, Longview, TX, for Marshall City and Williams.

Ken W. Good and James S. Howard, Cowles & Thompson, Tyler, TX, for Oldham.

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

Before GARWOOD, JOLLY and SMITH, Circuit Judges.

GARWOOD, Circuit Judge:

Plaintiff-appellant Jimmy Blackburn (Blackburn) sued the City of Marshall, Texas (the City), Marshall Chief of Police Chuck Williams (Williams), and former Harrison County Sheriff Bill Oldham (Oldham) (collectively Defendants), asserting constitutional and state law claims arising from the revocation of his permission to use the police radio frequency in his towing and wrecker service business. Blackburn appeals the district court's dismissal of his suit for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). We affirm in part and reverse and remand in part.

Facts and Proceedings Below

Blackburn owns and operates a towing and wrecker service in Harrison County, Texas. The backdrop of this suit centers around the wrecker business in Marshall, Texas, the county seat of Harrison County. The City provides local towing and wrecker operators with two distinct sources of business. The first category is the removal of abandoned vehicles from public property, for which the City awards a competitive contract to one local wrecker service. The second source is the removal of cars that have been involved in accidents, for which the City employs a rotating on-call system. Both these distinct operations are involved in this suit. A third source of business for local wreckers, independent of any City involvement or regulation, consists of customer requests for the assistance of a specific wrecker.

To award the contract for the removal of abandoned vehicles, the City solicited bids from local wreckers through the publication of two notices in the local newspaper as required by Texas law. TEX.LOCAL GOV'T CODE ANN. Sec. 252.041 (Vernon 1988). Blackburn, who does not subscribe to the newspaper, did not see the notices and therefore did not participate in the bidding process. Upset about missing the opportunity to bid, Blackburn, on or about January 23, 1992, telephoned Williams to complain about this bidding procedure. In this conversation, Williams told Blackburn that his attitude in complaining about the bidding procedure was improper and that he would therefore be removed from the rotation list for the accident vehicles. Later that day, Williams revoked Blackburn's permission to use the police radio frequency. On January 24, Blackburn received a letter from Oldham informing him that his wrecker company had been removed from the Harrison County rotation list. In a January 26, 1992, article in the local newspaper, Williams repeated his earlier statement: "I removed (Blackburn) [from the rotation list] because of his attitude. I don't need him representing the city of Marshall." This is the only adverse statement about Blackburn in the article, a copy of which is appended to the complaint.

The city police, the county sheriff, and the Texas Department of Public Safety often require the assistance of wreckers to remove damaged vehicles from accident scenes. In an effort to ensure equitable distribution of this official wrecker business, a group of local wreckers formed the Harrison County Wreckers Association (the Association). The Association notifies the city police, the county sheriff, and the Texas Department of Public Safety which wrecker service is available on call to receive requests for towing from the police dispatcher. It is not alleged that Defendants participate in the administration of the Association or play any role in the Association's selection of the on-call wrecker. Unless an accident victim requests a specific wrecker, the on-call wrecker tows all vehicles involved in traffic accidents. The Association requires, as a prerequisite for membership, permission to use the official police radio frequency. As a result of the City's suspension of his police radio frequency privileges, Blackburn could no longer be an Association member and therefore could not participate in the rotation system for removing accident vehicles.

After unsuccessfully attempting to settle his dispute with various city officials, including Williams and the mayor, and with Oldham, Blackburn requested a hearing to challenge the suspension of his radio privileges and his concomitant removal from the rotation list. Although Blackburn's pleadings are inconsistent on whether he received a hearing, ¹ his brief on appeal suggests that he did receive a hearing. Blackburn also alleges that, on or about October 6, 1992, he was informed for the first time that his permission to use the police radio frequency was revoked because of information retrieved from the National Law Enforcement Computer Network (NCIC) indicating that he had a 1980 grand larceny conviction in Virginia. Blackburn denied this assertion and presented an affidavit of a Virginia court administrator stating that he did not have a grand larceny conviction. ²

Blackburn complains that he has suffered substantial business losses as a result of Defendants' actions. In addition to losing the business generated by the on-call rotation system, Blackburn asserts that many of his customers have ceased to use his services in the wake of the publication of the January 26 newspaper article. Blackburn filed this suit against Defendants, pursuant to 42 U.S.C. Sec. 1983, alleging that he was denied business referrals from the City and County in retaliation for his speech on a matter of public concern in violation of the First Amendment, and that Defendants' actions deprived him of both a liberty and a property interest without due process in violation of the Fourteenth Amendment. ³ Blackburn also asserts several pendent (or supplemental) state law claims for defamation and tortious interference with business relationships.

After filing an answer, the City and Williams moved to dismiss the complaint for failure to state a cause of action under Federal Rule of Civil Procedure 12(b)(6). Oldham separately moved to dismiss on the same ground. Oldham and Williams also asserted qualified immunity defenses. The district court granted Defendants' motions to dismiss under Rule 12(b)(6). The district court held that Blackburn's First Amendment claim failed because he was not a public employee. Rejecting Blackburn's due process claims, the district court held that the facts alleged failed to satisfy the stigmatization requirement and that he did not have a property interest in remaining on the on-call rotation list. Having dismissed all the federal claims, the district court dismissed the pendent (or supplemental) state law claims. Blackburn now appeals. We affirm the dismissal of Blackburn's due process claims against all three defendants, affirm the dismissal of all other claims against Oldham, and reverse the dismissal of the First Amendment claim, and the pendent (or supplemental) state law claims, against the City and Williams.

Discussion

I. Standard of Review

We review de novo a district court's dismissal for failure to state a claim under Rule 12(b)(6). Leffall v. Dallas Independent School Dist., 28 F.3d 521, 524 (5th Cir.1994). We must accept plaintiff's factual allegations as true. Cinel v. Connick, 15 F.3d 1338, 1341 (5th Cir.), cert. denied, --- U.S. ----, 115 S.Ct. 189, 130 L.Ed.2d 122 (1994). A Rule 12(b)(6) dismissal will not be affirmed "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957); see also Mitchell v. McBryde, 944 F.2d 229, 230 (5th Cir.1991). However, "[d]ismissal is proper if the complaint lacks an allegation regarding a required element necessary to obtain relief." 2A Moore's Federal Practice p 12.07 [2.-5] at 12-91 (footnote omitted). And, "conclusory allegations or legal conclusions masquerading as factual conclusions will not suffice to prevent a motion to dismiss." Fernandez-Montes v. Allied Pilots Ass'n, 987 F.2d 278, 284 (5th Cir.1993).

In considering a defendant's claim of qualified immunity, our first inquiry is whether the plaintiff alleged "the violation of a clearly established constitutional right." Siegert v. Gilley, 500 U.S. 226, 231, 111 S.Ct. 1789, 1793, 114 L.Ed.2d 277 (1991). The second inquiry is whether the defendant is entitled to qualified immunity. Id. State officials are shielded from liability under qualified immunity unless they violate a constitutional right that was clearly established at the time of their conduct. Pfannstiel v. Marion, 918 F.2d 1178, 1183 (5th Cir.1990).

II. First Amendment Claim

Blackburn argues that Defendants' revocation of his permission to use the police radio frequency was in retaliation for the exercise of his First Amendment right to free speech. According to Blackburn's complaint, he spoke out on a matter of public concern: the bidding procedure for the abandoned vehicles contract. Blackburn alleges that, as a result, the City revoked his permission to use the police radio frequency, thereby rendering him ineligible for continued membership in the Association and participation in its rotation list. The district court rejected Blackburn's First Amendment claim on the basis that he was not a public employee and thus was not entitled to protection against retaliation for speaking out on a matter of public concern.

At the outset, we reject the district court's apparent assumption that only public employees enjoy the protections of the First...