Texas Ass'n of Business v. Earle

• Decision Date: 18 October 2004
• Docket Number: No. 03-50254.,03-50254.
• Citation: 388 F.3d 515
• Parties: TEXAS ASSOCIATION OF BUSINESS and William O. Hammond, Plaintiffs-Appellants, v. Ronald EARLE, District Attorney, Travis County, Texas, Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

388 F.3d 515

TEXAS ASSOCIATION OF BUSINESS and William O. Hammond, Plaintiffs-Appellants, v. Ronald EARLE, District Attorney, Travis County, Texas, Defendant-Appellee.

No. 03-50254.

United States Court of Appeals, Fifth Circuit.

October 18, 2004.

William Andrew Taylor (argued), Amanda Staines Peterson, Andy Taylor & Associates, Houston, TX, for Plaintiffs-Appellants.

R. James George, Jr. (argued), Peter Drew Kennedy, George & Brothers, James A. Hemphill, Graves, Dougherty, Hearon & Moody, Austin, TX, for Defendant-Appellee.

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

Before DeMOSS, DENNIS and PRADO, Circuit Judges.

DENNIS, Circuit Judge:

Plaintiffs-Appellants, Texas Association of Business (TAB) and William O. Hammond, filed suit in the Western District of Texas against Defendant-Appellee Ronald Earl, the District Attorney for Travis County, seeking injunctive and declaratory relief. The lawsuit arises out of a Travis County grand jury investigation of TAB for Texas Election Code violations during the 2002 state election cycle. TAB and Hammond seek an injunction against the enforcement of subpoenas issued by the grand jury, an order enjoining the entire grand jury investigation, and a judgment declaring that TAB's conduct during the 2002 campaign season constitutes expression protected by the First Amendment guarantees of free speech and free association. The district court declined to consider these requests, citing the abstention doctrine set forth in Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971) and its progeny. We affirm. However, we decline to decide whether an injunction is necessary to relieve TAB of its obligation to produce documents under the subpoenas, as the issue has become moot.

I. BACKGROUND

TAB is a non-profit Texas corporation that describes its purpose as the promotion of the free enterprise system. Hammond is TAB's President and Chief Executive Officer. During the 2002 election cycle, TAB promulgated a number of television and print advertisements highlighting a particular candidate's view on specific issues, such as lawsuit reform, healthcare, and taxes. TAB alleges that these ads were for informational purposes and did not advocate for the election or defeat of any particular candidate; although, the ads criticized and praised particular candidates by name.¹ TAB also maintains that the ads were created solely of their own volition without consultation with, or cooperation from, any candidate. District Attorney Earle questions TAB's assertions that no candidate cooperation or consultation occurred.

After the election cycle, five different losing candidates filed two separate lawsuits against TAB and Hammond in state court, alleging that TAB violated Texas state election law by illegally obtaining $2,000,000 and failing to disclose the expenditure of those funds for campaign purposes. In addition, a complaint was filed with the Texas Ethics Commission, which enforces the Texas Election Code, alleging various violations of the Code. The Travis County's District Attorney's office began an investigation into TAB's practices and on January 16, 2003, the 147th Travis County Grand Jury issued three subpoenas to Hammond, Don Shelton, who was TAB's Information Systems Director, and Bob Thomas, owner of Thomas Graphics, who was hired to create TAB's ads.

TAB claims that all three of the subpoenas seek to compel information that is protected by its rights to free speech and freedom of association as guaranteed in the First Amendment to the United States Constitution. Based on this assertion, TAB and Hammond filed suit in federal district court seeking: (1) an injunction to prevent the District Attorney's office from enforcing the three grand jury subpoenas, (2) an injunction to prevent the District Attorney's office from conducting a grand jury investigation into TAB's advertisements, and (3) a declaration that TAB's conduct during the 2002 election cycle was protected speech. On February 10, 2003, after conducting an evidentiary hearing, the district court denied TAB and Hammond's requests for relief and dismissed the suit, applying the abstention doctrine set out in Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971). TAB and Hammond timely appealed.

While TAB and Hammond were seeking relief in federal court they also sought relief within the state court system, filing a number of motions with the state district court. First, they filed a motion to quash the subpoenas, which was denied in a written order on April 8, 2003. The state court judge held that the TAB ads at issue "involve `speech' covered by the First Amendment, thereby requiring the state to regulate in the area with narrow specificity," but that the State had offered evidence that TAB "engaged in express advocacy, improperly coordinated with candidates and political action committees, improperly mixed T.A.B. and political action committee business, and failed to properly report expenditures and contributions." Based on the above, the state court judge allowed the grand jury to proceed, but prevented the grand jury from receiving a list of TAB's members and donors, and from subpoenaing any sitting elected official without the court's approval. The protective order also forbids the release of any information obtained under the subpoenas to any outside entity or individual, including the civil litigants working with the District Attorney's office. TAB then filed writs of mandamus challenging the state court's order, which the Austin Court of Appeals and the Texas Court of Criminal Appeals denied.

In addition, after Hammond and Shelton refused to comply with another subpoena, the state court held a show cause hearing. After the hearing, both were held in contempt and the court fined them $500 each. Hammond and Shelton then filed a petition for writs of mandamus in the Texas Court of Criminal Appeals, which was denied without opinion on June 25, 2003. When Hammond refused to abide by the order and to pay the fine, the court ordered him placed into custody. Hammond filed a writ of habeas corpus. The Texas Court of Criminal Appeals granted him bail and ordered a response from the state court on the habeas charge. On October 20, 2003, the appellants TAB and Hammond partially complied with the contested subpoenas and turned over to the grand jury the requested documents, redacted in accordance with the protective order issued by the state court.

II. MOOTNESS

District Attorney Earle contends that because the appellants complied with the subpoena request, there is no live case or controversy and that this case should be dismissed as moot. We agree that the issue of compliance with the subpoenas' order to hand over documents is now moot. There remains, however, a case and controversy over compliance with the parts of the subpoenas ordering live testimony before the grand jury, issuance of an injunction barring the entire grand jury investigation and the granting of declaratory relief. Thus, we must consider whether the Younger abstention doctrine applies.

III. STANDARD OF REVIEW

This court applies a two-tiered standard of review in abstention cases. Nationwide Mut. Ins. Co. v. Unauthorized Practice of Law Comm., 283 F.3d 650, 652 (5th Cir.2002). "Although we review a district court's abstention ruling for abuse of discretion, we review de novo whether the requirements of a particular abstention doctrine are satisfied." Id. "The exercise of discretion must fit within the narrow and specific limits prescribed by the particular abstention doctrine involved." Webb v. B.C. Rogers Poultry, Inc., 174 F.3d 697, 701 (5th Cir.1999). "A court necessarily abuses its discretion when it abstains outside of the doctrine's strictures." Id. Thus, we review a district court's decision to abstain for abuse of discretion, provided that the elements for Younger abstention are present.

IV. ANALYSIS

Under the rule set out by the United States Supreme Court in Younger v. Harris, federal courts must refrain from considering requests for injunctive relief based upon constitutional challenges to state criminal proceedings pending at the time the federal action is instituted. Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971); Doe v. The Order Desk, Inc., 1997 WL 405141, at *2 (N.D.Tex. July 14, 1997). On the same day that Younger was decided, the Court expanded the rule to apply to suits for injunctive relief. Samuels v. Mackell, 401 U.S. 66, 91 S.Ct. 764, 27 L.Ed.2d 688 (1971).

In Younger, the Court identified one primary source of the policy, saying, "[o]ne is the basic doctrine of equity jurisprudence that courts of equity should not act, and particularly should not act to restrain a criminal prosecution, when the moving party has an adequate remedy at law and will not suffer irreparable injury if denied equitable relief." 401 U.S. at 43-44, 91 S.Ct. 746. The Court pointed out that this rule of equity acts to "prevent erosion of the role of the jury" and "avoid a duplication of legal proceedings and legal sanctions where a single suit would be adequate to protect the rights asserted." Id. at 44, 91 S.Ct. 746. The Court then went on to name the most important source for the abstention doctrine it was enunciating, "Our Federalism." The Younger Court used this talismanic phrase to sum up "the notion of `comity,' that is, a proper respect for state functions, a recognition of the fact that the entire country is made up of a Union of separate state governments, and a continuance of the belief that the National Government will fare best if the States and their institutions are left free to perform their separate functions in their separate ways." Id.

There is a three-prong test for determining whether the Younger abstention doctrine is applicable: (1) the dispute must involve an "ongoing state judicial proceeding," (2) an important state interest in the subject...