Morgan v. Chapman

• Decision Date: 07 August 2020
• Docket Number: No. 18-40491,18-40491
• Parties: Courtney MORGAN, Plaintiff – Appellee, v. Mary CHAPMAN; John Kopacz, Defendants – Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

969 F.3d 238

Courtney MORGAN, Plaintiff – Appellee,

v.Mary CHAPMAN; John Kopacz, Defendants – Appellants.

No. 18-40491

United States Court of Appeals, Fifth Circuit.

FILED August 7, 2020

Tommy Swate, Swate Law, Houston, TX, Erica Faith Chaplin, Palm Beach, FL, Leslie A. Werner, Victoria, TX, for Plaintiff-Appellee.

Bill L. Davis, Assistant Attorney General, Office of the Attorney General, Office of the Solicitor General, Seth Byron Dennis, Assistant Attorney General, Office of the Attorney General, Financial Litigation & Charitable Trusts Division, Summer Rayne Lee, Assistant Attorney General, Office of the Attorney General, General Litigation Division, Austin, TX, for Defendants-Appellants.

Andrew Layton Schlafly, Far Hills, NJ, for Amicus Curiae.

Before ELROD, WILLETT, and DUNCAN, Circuit Judges.

JENNIFER WALKER ELROD, Circuit Judge:

This is another in a long line of cases involving the Texas Medical Board serving instanter subpoenas on medical clinics. We have said that those subpoenas—which do not allow for court review and demand immediate compliance—are unconstitutional.

In this case, a team of law enforcement officers and Medical Board investigators locked down a clinic, rifled through private patient records, and seized confidential files. Courtney Morgan alleges that Mary Chapman, a Medical Board investigator, used those illegally-obtained files to fabricate evidence and get him indicted on trumped-up charges of running a pill mill. A state district court largely agreed with that version of the facts, suppressing the illegally obtained evidence, and dismissing the indictment against Morgan. Now, Morgan brings a civil suit against two government agents for violating his constitutional rights.

In this case, Morgan contends that Chapman and John Kopacz used instanter subpoenas to illegally search his clinic (which did not dispense pain medication), resulting in the illegal seizure of property and patient records. This is not the first time this court has addressed these subpoenas. In Zadeh v. Robinson , the Board executed an unconstitutional instanter subpoena on an internal medicine doctor. 928 F.3d 457, 462 (5th Cir. 2019), cert denied ––– U.S. ––––, ––– S.Ct. ––––, ––– L.Ed.2d ––––, 2020 WL 3146691 (June 15, 2020). And in Cotropia v. Chapman , another doctor alleged that Chapman showed up with an unconstitutional instanter subpoena and, over the receptionist's objection, removed and copied sensitive documents from the office's front desk. 721 Fed. App'x 354, 356 (5th Cir. 2018).

The district court denied qualified immunity to both defendants and rejected Chapman's assertion of absolute prosecutorial immunity. It held that Morgan stated a claim for the purported constitutional tort of malicious prosecution against Kopacz and Chapman, and stated a claim for "constitutional" abuse of process against Chapman. We reverse because malicious prosecution and abuse of process are not viable theories of constitutional injury. But we remand for the district court to decide whether Morgan has waived his Fourth Amendment claims and whether he should be allowed to amend his complaint a third time to add a due process claim.

I.

Dr. Courtney Morgan is a licensed physician in Victoria, TX.¹ Since 2007, he has owned and operated two medical clinics: Hop Medical Services and Drive Thru Doc. Hop Medical focuses on general family medicine, while Drive Thru focuses only on simple medical issues that can be treated in thirty days. Such ailments include rashes, toothaches, sexually transmitted diseases

, and strep throat. Drive Thru provides these services at a discounted rate in order to help uninsured patients.

Morgan states that he has never stored, retained, or dispensed any controlled substance at either clinic. But on July 18, 2013, law enforcement descended to search for evidence of illegal controlled-substance related activity. Mary Chapman, an investigator for the Texas Medical Board, and John Kopacz, an agent with the Texas Department of Public Safety, along with two additional Medical Board agents, two Drug Enforcement Administration agents, and a local Victoria, TX, police officer, served administrative instanter subpoenas on Morgan, searched his clinics, and seized medical files. Chapman and Kopacz confined Morgan in an examination room, prevented his employees from communicating with each other, and collected all of their cell phones. Chapman and Kopacz seized confidential documents, including all patient medical records for March 2013, as well as additional documents that were not listed in the subpoenas.

Things would get worse for Morgan. As he tells it, Chapman fabricated evidence to encourage a baseless criminal prosecution. In Texas, a clinic that prescribes four specific types of controlled substances to greater than half of its patients on a monthly basis must obtain a pain management clinic certification. Chapman made a report that included all patients who received prescriptions for any controlled substance, knowing that this was deceptive. Based on that fabricated report, Kopacz suggested to the district attorney that Morgan be charged with operating an unlicensed pain management clinic. A grand jury indicted Morgan based solely on the fabricated report, and he was arrested for the third-degree felony of non-certification of a pain management clinic.

A.

The state court made quick work of the prosecution. On September 3, 2015, Chapman testified on Morgan's motion to suppress. This testimony, Morgan says, revealed startling new information: (1) Chapman and Kopacz coordinated extensively with each other prior to serving the TMB administrative instanter subpoenas; (2) Chapman's fabricated report was the sole evidence used to support Morgan's indictment; and (3) Chapman and Kopacz worked together to encourage the prosecution that rested on the fabricated report.

The state district court held a suppression hearing, where it heard testimony from Chapman and Kopacz. The court found that the Medical Board and DPS communicated for the purpose of charging Morgan with a crime, that there was "an unusual show of force by law enforcement to merely serve subpoena(s)," and that Chapman's evasive testimony was "less than credible." The court granted Morgan's motion to suppress, holding that Chapman and Kopacz conducted a warrantless search and seizure at Morgan's clinics.

The court applied New York v. Burger , which held that an administrative subpoena is only reasonable if there is a substantial government interest implicating the regulatory scheme, the search is necessary to further that scheme, and the subpoena provides an adequate substitute for a warrant. 482 U.S. 691, 702–03, 107 S.Ct. 2636, 96 L.Ed.2d 601 (1987). There was a substantial interest in the regulatory scheme, the court concluded, but the search violated the Fourth Amendment because "the intent behind the search ... was to pursue criminal charges." The subpoena did not provide an adequate substitute for a warrant, the court explained, because it did not provide Morgan an opportunity for pre-enforcement judicial review, and that neither the consent nor exigent circumstances exceptions to the warrant requirement applied. The court granted the motion to suppress and dismissed the indictment on January 20, 2016.

On July 11, 2016, Morgan learned that Chapman deliberately inflated the numbers in her report in order to encourage his prosecution. He also asserts that Chapman deliberately excluded evidence that would show his exemption from pain-management certification requirements.

B.

Morgan filed this lawsuit on January 20, 2017 in the Southern District of Texas. His first complaint alleged claims under 42 U.S.C. § 1983 —for malicious prosecution and violations of the Fourth Amendment—as well as a state-law malicious-prosecution claim and violation of Article I § 9 of the Texas Constitution.

After the defendants filed motions to dismiss, Morgan amended his complaint. This new complaint dropped most of his claims, leaving only individual-capacity claims against Kopacz and Chapman for malicious prosecution under 42 U.S.C. § 1983. The First Amended Complaint added a Fourth Amendment claim. Chapman and Kopacz again responded with motions to dismiss. At a subsequent hearing, the district court granted Morgan leave to file a second amended complaint, mooting the previous filings.

The Second Amended Complaint is before us today. It alleges that Chapman "compiled an investigative report from the seized medical records obtained during the warrantless search," which used "deliberately inaccurate calculations [to] falsely inflate[ ] the percentage of prescriptions issued by Morgan"; that Kopacz "received the entire investigative file from the [Texas Medical Board]," and that the report "was the sole evidence relied upon in Kopacz's decision to cause the criminal prosecution of Morgan through the Victoria County District Attorney's Office."

The Second Amended Complaint asserts three claims, all brought under 42 U.S.C. § 1983 : Count I, for malicious prosecution against Kopacz; Count II for malicious prosecution against Chapman; and Count III, for abuse of process against Chapman.

Kopacz and Chapman each moved to dismiss. Kopacz's motion raised the defense of qualified immunity and argued that there is no constitutional right to be free from malicious prosecution. It also noted that any freestanding Fourth Amendment claim alleged in the complaint would be time-barred. Chapman's motion to dismiss asserted defenses of absolute immunity, qualified immunity, and failure to state a claim. The motion also asserted that the abuse-of-process claim was time-barred.

The district court denied both motions. The court briefly summarized the alleged facts, described the claims and defenses, and stated the Rule 12(b)(6) standard. Then, the district court copied the state court's suppression order verbatim, entailing four-and-a-half of the order's nine pages. The district court concluded that defendants...