969 F.3d 1125 (10th Cir. 2020), 19-6141, Castanon v. Cathey

Docket Nº:19-6141
Citation:969 F.3d 1125
Opinion Judge:BACHARACH, Circuit Judge.
Party Name:Mike Lee CASTANON; Elite Oilfield Services, LLC, Plaintiffs-Appellants, v. Kelly CATHEY, an individual; Mike Cory, an individual; Richard Bickle, an individual; David Moore, an individual; Debbie Schauf, an individual; and Oklahoma Horse Racing Commission. Defendants-Appellees, and DEBBIE SCHAUF, an individual, Defendant.
Attorney:Clark O. Brewster, Brewster & De Angelis, P.L.L.C., Tulsa, Oklahoma ( Mbilike M. Mwafulirwa with him on the briefs), for Plaintiffs-Appellants. Randall Yates, Assistant Solicitor General, Oklahoma City, Oklahoma ( Jacqueline R. Zamarripa, Assistant Attorney General, Oklahoma City, Oklahoma with h...
Judge Panel:Before BACHARACH, MURPHY, and MORITZ, Circuit Judges.
Case Date:August 14, 2020
Court:United States Courts of Appeals, Court of Appeals for the Tenth Circuit

Page 1125

969 F.3d 1125 (10th Cir. 2020)

Mike Lee CASTANON; Elite Oilfield Services, LLC, Plaintiffs-Appellants,

v.

Kelly CATHEY, an individual; Mike Cory, an individual; Richard Bickle, an individual; David Moore, an individual; Debbie Schauf, an individual; and Oklahoma Horse Racing Commission. Defendants-Appellees, and DEBBIE SCHAUF, an individual, Defendant.

No. 19-6141

United States Court of Appeals, Tenth Circuit

August 14, 2020

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[Copyrighted Material Omitted]

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Appeal from the United States District Court for the Western District of Oklahoma (D.C. No. 5:18-CV-00537-R)

Clark O. Brewster, Brewster & De Angelis, P.L.L.C., Tulsa, Oklahoma ( Mbilike M. Mwafulirwa with him on the briefs), for Plaintiffs-Appellants.

Randall Yates, Assistant Solicitor General, Oklahoma City, Oklahoma ( Jacqueline R. Zamarripa, Assistant Attorney General, Oklahoma City, Oklahoma with him on the briefs), for Defendants-Appellees.

Before BACHARACH, MURPHY, and MORITZ, Circuit Judges.

BACHARACH, Circuit Judge.

This appeal stems from the disqualification of two horses from two races. The plaintiffs owned two horses registered to race, but state racing officials determined that the horses were ineligible. The owners sued, alleging denial of due process in disqualifying one of the horses. The district court dismissed the claim based on the absence of a property or liberty interest. The owners asked the district court to alter or amend the judgment. The district court denied this request, and the owners appeal. We affirm the denial of the motion to alter or amend.

When moving to alter or amend the judgment, the owners • reasserted one argument that the district court had rejected and

• asserted two new arguments that could have been raised earlier.

The district court acted within its discretion in rejecting these arguments as a basis to alter or amend the judgment, for these arguments are procedurally and substantively invalid.

The arguments are procedurally invalid because they are not suitable for a motion to alter or amend the judgment. This kind of motion cannot be based on the reassertion of earlier arguments or the assertion of new arguments that could have been raised earlier. So the owners could not properly raise any of these arguments in a motion to alter or amend the judgment.

These arguments are also substantively invalid because the racing officials' disqualification of the horses did not deprive the owners of a property or liberty interest.

I. Officials disqualified the plaintiffs' horses based on suspension of the trainer.

The plaintiffs owned two horses: EOS A Political Win and EOS Trumpster. EOS Trumpster won a horse race, and EOS A Political Win was set to run in a later race. Both horses had the same trainer.

Between the two races, the Oklahoma Horse Racing Commission found that EOS Trumpster had tested positive for a banned substance. This finding led the Commission to suspend the trainer's horse-racing license. Because this trainer also handled EOS A Political Win, officials disqualified EOS A Political Win from the upcoming race.

But officials allegedly waited to tell the owners about the disqualification of EOS A Political Win. The delay allegedly prevented the owners from seeking judicial review before the race, so the owners asked the Commission's Executive Director to stay the order of disqualification.

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He declined, and the race proceeded without EOS A Political Win.

After the race, the owners sued for a denial of due process, naming the Commission and four of its officials (the Executive Director and three stewards).1 The Commission and its four officials moved to dismiss the complaint and the district court granted the motion, holding that • the owners lacked a property or liberty interest protected by the Fourteenth Amendment and

• any potential property or liberty interest would not have been clearly established.

The owners then moved to alter or amend the judgment. As part of the motion, the owners sought permission to amend the complaint. The district court denied the motion to alter or amend.

II. The district court acted within its discretion when declining to alter or amend the judgment.

In their motion to alter or amend the judgment, the owners asked the court to reconsider the existence of a property or liberty interest.2 The district court declined to alter or amend the judgment, and we review that ruling for an abuse of discretion. Nelson v. City of Albuquerque, 921 F.3d 925, 929 (10th Cir. 2019). In conducting that review, we conclude that the district court didn't abuse its discretion in light of the absence of a protected interest.

A. The owners claim three property or liberty interests.

Procedural due process is required when a plaintiff is deprived of "interests encompassed by the Fourteenth Amendment's protection of liberty and property." Bd. of Regents of State Colls. v. Roth, 408 U.S. 564, 569, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972). To evaluate a claim involving procedural due process, we ask (1) whether the defendants' actions deprived the plaintiffs of a property or liberty interest and (2) if so, whether the plaintiffs "were afforded the appropriate level of process." M.A.K. Inv. Grp., LLC v. City of Glendale, 897 F.3d 1303, 1308-09 (10th Cir. 2018) (quoting Pater v. City of Casper, 646 F.3d 1290, 1293 (10th Cir. 2011)).

Property interests arise from "existing rules and understandings that stem from an independent source such as state law." Roth, 408 U.S. at 577, 92 S.Ct. 2701; Carnes v. Parker, 922 F.2d 1506, 1509 (10th Cir. 1991). Liberty interests "may arise from the Constitution itself, by reason of guarantees implicit in the word `liberty' ... or ... from an expectation or interest created by state laws or policies." Wilkinson v. Austin, 545 U.S. 209, 221, 125 S.Ct. 2384, 162 L.Ed.2d 174 (2005).

The owners assert three interests: 1. an interest in a government-sponsored program,

2. an interest in using property to pursue business or leisure, and

3. an interest in a state cause of action for judicial review.

B. The owners couldn't assert these interests in the Rule 59(e) motion to alter or amend the judgment.

The owners waited to invoke two of the purported interests until the motion to alter or amend the judgment: (1) an interest in a government-sponsored program and (2) an interest in using the property to

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pursue business or leisure. In asserting these interests, the owners invoked Federal Rule of Civil Procedure 59(e).3 This rule allows litigants to ask the court to reconsider adverse judgments. But the remedy is limited: a court can grant relief under Rule 59(e) only when the court has "misapprehended the facts, a party's position, or the controlling law." Servants of the Paraclete v. Does, 204 F.3d 1005, 1012 (10th Cir. 2000).

Given the parties' interests in the finality of judgments, Rule 59(e) motions are "not appropriate to revisit issues already addressed or advance arguments that could have been raised in prior briefing." Id. The owners could have invoked these purported property and liberty interests when opposing the motion to dismiss. But the owners instead waited to assert these interests until they filed their Rule 59(e) motion.

The owners offer no excuse for their delay. When asked if the owners could have presented the arguments earlier, the owners' attorney responded that "[w]e could have, I suppose." Oral Arg. at 8:00. Because the owners could have raised these arguments earlier, the district court acted within its discretion in rejecting these arguments newly asserted in the Rule 59(e) motion.

The owners also urge a property interest in their state cause of action for judicial review. This argument appeared in the owners' response to the motion to dismiss. See Appellants' App'x at 115 ("[A]s OHRC licensees, the Oklahoma Rules of Racing entitled Plaintiffs to notice of impending adverse action and a meaningful opportunity to be heard."). But Rule 59(e) "may not be used to relitigate old matters," Exxon Shipping Co. v. Baker, 554 U.S. 471, 485 n.5, 128 S.Ct. 2605, 171 L.Ed.2d 570 (2008) (quoting 11 C. Wright & A. Miller, Federal Practice and Procedure § 2810.1, at 127-28 (2d ed. 1995)), unless a party shows that the district court misunderstood the facts or the law, Servants of Paraclete v. Does, 204 F.3d 1005, 1012 (10th Cir. 2000). This part of the motion to alter or amend the judgment simply rehashed the owners' response to the motion to dismiss. So the district court had discretion to decline consideration of the owners' reasserted argument.

C. Even if these arguments had been properly raised, they would not show a property or liberty interest.

Even if we overlook the limited scope of Rule 59(e), the state racing officials did not deprive the owners of a property or liberty interest.

1. The owners lacked a property or liberty interest in a government-sponsored program.

In asserting an interest in a government-sponsored program, the owners rely on an Oklahoma statute and the Oklahoma Administrative Code, which require participants in a state-sanctioned horse race to be licensees, to have a horse and trainer, and to register the horse. See Okla. Stat. tit. 3A § 204(A); Okla. Admin. Code § § 325:15-5-1(1)(B)-(C); 325:35-1-5(b)(4). The owners argue that they satisfied these requirements, triggering a property or liberty interest.

But the owners don't show any limits on the discretion of state racing officials to disqualify EOS A Political Win. The owners argue that a state regulation limits discretion by providing specific grounds

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for denial, refusal, suspension, or revocation of a license by the stewards. Okla. Admin. Code § §...

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