Hearth, Inc. v. Department of Public Welfare, 77-3238

• Decision Date: 03 March 1980
• Docket Number: No. 77-3238,77-3238
• Parties: The HEARTH, INC., Plaintiff-Appellant, v. DEPARTMENT OF PUBLIC WELFARE et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 981

612 F.2d 981

The HEARTH, INC., Plaintiff-Appellant, v. DEPARTMENT OF PUBLIC WELFARE et al., Defendants-Appellees.

No. 77-3238.

United States Court of Appeals, Fifth Circuit.

March 3, 1980.

F. Edward Barker, Corpus Christi, Tex., for plaintiff-appellant.

David H. Young, Asst. Atty. Gen., John L. Hill, Atty. Gen., David M. Kendall, Robert S. Bickerstaff, Jr., Asst. Attys. Gen., Austin, Tex., for defendants-appellees.

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

Before TJOFLAT and HILL, Circuit Judges, and HIGGINBOTHAM ^*, District Judge.

PER CURIAM:

This case arises out of a contract dispute between appellant, a non-profit nursing care facility operating in Corpus Christi, Texas, and the Texas Department of Public Welfare. In 1969, appellant voluntarily entered into a contract with the Department wherein it was agreed that the State would reimburse appellant for services rendered to indigent, aged persons. The contract further provided that any such payments could be withheld by the Department "if necessary because of irregularity from whatever cause until such irregularity or difference can be adjusted." Brief for Appellant at 4. In 1973, the Department conducted an audit of appellant and determined that certain irregularities existed in appellant's method of accounting. Appellant was directed to make restitution to certain individuals totalling $21,000, and was informed that a hold would be placed on all payments due appellant until the Department's directive was complied with.

Appellant then filed suit in the United States District Court for the Southern District of Texas, seeking a temporary restraining order, and a permanent injunction in the event that the court determined that the payments had been withheld wrongfully. Named as defendants in the action were the Department and its Commissioner, Raymond Vowell, individually and in his official capacity. The complaint alleged a violation of the due process clause of the Fourteenth Amendment and based jurisdiction on 28 U.S.C.A. § 1331. In 1977, the district court dismissed the suit on the grounds that § 1331 requires that more than $10,000 be in controversy and that any such award against the Department or Vowell, in his official capacity, would be barred by the Eleventh Amendment. The claim against Vowell in his individual capacity was dismissed because of the absence of any indication that he had personally participated in any alleged wrongdoing. For the reasons stated below, we affirm the dismissal.

The problem in this case is one of jurisdiction. Thus, we look to appellant's jurisdictional statement, contained in paragraph 2 of the complaint, which reads as follows:

This action arises under the Fourteenth Amendment to the Constitution of the United States, Section 1 as hereinafter more fully appears. The matter in controversy exceeds exclusive of interest and costs the sum of $10,000.

In support of its claim, appellant appears to assert that the failure of Texas to provide a forum to adjudicate this contract dispute with the Department amounts to a denial of due process of law. As appellant does not cite us to any statute or common law doctrine which might authorize such a suit in the federal courts, we must assume that appellant wishes us to hold that the Fourteenth Amendment alone provides a basis for invoking federal...