Alamo Forensic Servs. v. Bexar Cnty., 20-50449

ALAMO FORENSIC SERVICES, L.L.C., Plaintiff—Appellant, v. BEXAR COUNTY, TEXAS; JOE D. GONZALES, Defendants—Appellees, v. DEBRA STEPHENS, Appellant.

No. 20-50449

United States Court of Appeals for the Fifth Circuit

June 17, 2021

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

USDC No. 5:20-CV-38

Before DENNIS and ENGELHARDT, Circuit Judges, and HICKS^*, District Judge.

PER CURIAM:^**

Plaintiff-Appellant Alamo Forensic Services, LLC (AFS) appeals the dismissal of its action against Defendants-Appellees Bexar County, Texas, and Bexar County Criminal District Attorney Joe D. Gonzales for alleged breach of implied contract and violations of First Amendment Rights pursuant to 42 U.S.C. § 1983. The district court granted Defendants' motion to dismiss, finding that AFS had failed to state a plausible breach of contract claim and that AFS lacked standing to assert the constitutional rights of an unnamed party. On appeal, AFS asserts that the district court erred in denying its motion for leave to file an amended complaint and granting Defendants' motion to dismiss. We AFFIRM.

I.

Alamo Forensic Services, LLC provides breath alcohol testing and instrument calibration services to various Texas law enforcement agencies and governmental entities. Between September, 2012 and February, 2018, AFS contracted with Bexar County (the "Contract") to provide maintenance of breath-test instruments, labor and parts for repair of those instruments, supervision of breath-test operators for the County, expert testimony on breath tests, clerical support, and training classes in exchange for a monthly fee and expense reimbursements from Bexar County.

Under the terms of the Contract, either party could terminate the agreement with thirty days written notice. On December 29, 2017, AFS was informed in writing by the Director of Bexar County Judicial Support Services that the County was not going to renew when the Contract's term expired on February 1, 2018. Bexar County subsequently contracted withone of AFS's competitors, Quality Forensic Toxicology, LLC (QFT) for the same services. AFS alleges that after the Contract expired, Bexar County continued to request services from AFS, but failed to compensate for those services. As a result, AFS stopped providing records to the Bexar County District Attorney.

Debra Stephens (Stephens), owner of AFS, is a Technical Supervisor approved by the Texas Department of Public Safety (DPS) under its Breath Alcohol Testing Program. Stephens allegedly became concerned about the practices being used by QFT and submitted a complaint to the Office of the Scientific Director of the Texas DPS Breath Alcohol Lab on February 2, 2019. According to AFS, DPS conducted an audit and found that QFT "was in compliance." Unsatisfied with the results of the DPS audit, Stephens submitted a letter to the Texas Attorney General on June 27, 2019, and shared her concerns with the Bexar County District Attorney's office about QFT's testing on August 26, 2019. AFS claims that, in response to Stephens' letter, Criminal District Attorney Joe Gonzales (Gonzales) issued a Memorandum of Disclosure that inaccurately attributed several false statements to Stephens.

On January 13, 2020, AFS brought a claim for breach of implied contract, a claim in the alternative for quantum meruit, and a claim pursuant to 42 U.S.C. § 1983 alleging a violation of the First Amendment rights of Stephens. On February 25, 2020, Appellees filed a motion to dismiss pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure. On March 10, 2020, AFS filed a response in opposition to the motion, arguing the motion to dismiss should be denied because "a plaintiff is not required to plead facts supporting each and every element of [its] claim or legal theory," "a plaintiff is not required to plead law or the legal elements of its claims," and discovery has not yet begun.

AFS also included with its response to the motion to dismiss a request for leave to file an amended complaint. The proposed amended complaint abandoned AFS's implied contract and quantum meruit claims, and instead asserted a claim for unconstitutional deprivation of property rights based on the same facts, and sought to add Stephens as a named plaintiff. The district court entered an order granting the Defendants' motion to dismiss and denying AFS's motion seeking leave to file the amended complaint. AFS timely appealed.

II.

We review the district court's grant of a motion to dismiss de novo. See Budhathoki v. Nielsen, 898 F.3d 504, 507 (5th Cir. 2018). To survive a 12(b)(6) motion, the plaintiff's complaint must assert "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). The facts asserted must allow "the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Limiting its review to the face of the pleadings, this court accepts as true all well-pleaded facts and views them in the light most favorable to the plaintiff. Spivey v. Robertson, 197 F.3d 772, 774 (5th Cir. 1999). Nevertheless, the plaintiff must provide more than "conclusory allegations, unwarranted factual inferences, or legal conclusions." Ferrer v. Chevron Corp., 484 F.3d 776, 780 (5th Cir. 2007). The factual bases for the plaintiff's complaint "must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true." Twombly, 550 U.S. at 555.

Rule 8(a)(2) of the Federal Rules of Civil Procedure provides, in a general way, the applicable standard of pleading. It requires that a complaint contain "a short and plain statement of the claim showing that the pleader is entitled to relief," FED. R. CIV. P. 8(a)(2), "in order to give the defendantfair notice of what the claim is and the grounds upon which it rests," Twombly, 550 U.S. at 555. Although a complaint need not contain detailed factual allegations, the "showing" contemplated by Rule 8 requires the plaintiff to do more than simply allege legal conclusions or recite the elements of a cause of action. Id.

III.

Defendants argue AFS failed to state a viable claim for breach of implied contract or quantum meruit and failed to state a viable First Amendment claim. AFS argues the motion should be denied because they set forth additional facts that state a legally cognizable claim.¹

Breach of Implied Contract and Quantum Meruit

In response to the motion to dismiss, AFS requests leave to file an amended complaint which removes the breach of contract and quantum meruit claims, adds Stephens as a plaintiff in her individual capacity, and adds a claim for unconstitutional deprivation of property rights, based on the same facts.

Defendants assert Bexar County is entitled to governmental immunity against breach of contract and quantum meruit claims. The Supreme Court of Texas has provided significant guidance on issues of immunity. "A unit of state government is immune from suit and liability unless the state consents." Dallas Area Rapid Transit v. Whitley, 104 S.W.3d 540, 542 (Tex. 2003) (citations omitted). Unless the party suing the governmental entity meets its burden of establishing that governmental immunity is waived, thetrial court lacks jurisdiction to consider the claim. Rusk State Hosp. v. Black, 392 S.W.3d 88, 95 (Tex. 2012).

To establish such a waiver of governmental immunity, a plaintiff must either point to an express legislative waiver or a constitutional provision that allows the plaintiff to bring the claim against the governmental unit. Luttrell v. El Paso Cty., 555 S.W.3d 812, 826 (Tex.App.—El Paso 2018, no pet.). AFS has failed to identify any waiver of governmental immunity that would permit those claims to proceed, and has therefore failed to plead facts showing either that any court may exercise subject matter jurisdiction over those claims or that they are viable. We affirm dismissal of the breach of contract and quantum meruit claims.

Due Process Deprivation of Property

In the proposed amended complaint, AFS adds a new claim against Bexar County: that AFS and Stephens "had property taken from them without compensation in violation of Plaintiffs' due process rights under the [Fourteenth] Amendment in violation of 42 U.S.C. § 1983." To establish municipal liability under § 1983, a plaintiff must plead three elements: "(1) an official policy (or custom) of which (2) a policymaker can be charged with actual or constructive knowledge, and (3) a constitutional violation whose 'moving force' is that policy or custom." Id. at 541-42 (quoting Pineda v. City of Houston, 291 F.3d 325, 328 (5th Cir. 2002)). AFS fails to address these elements in its original or proposed amended complaint.

To establish a § 1983 procedural due process claim, a plaintiff must show: (1) that he or she was deprived of a property interest protected by the Fourteenth Amendment, and (2) that the process attendant to the deprivation was constitutionally deficient. Ky. Dep't of Corr. v. Thompson, 490 U.S. 454, 460 (1989). A plaintiff must demonstrate a "legitimate claim of entitlement" to that property interest. Nunez v. Simms, 341 F.3d 385, 387(5th Cir. 2003). An implied contract may provide the source of such a property interest. White v. Miss. State Oil and Gas Bd., 650 F.2d 540, 543 (5th Cir. Unit A 1981). AFS's proposed amended complaint, however, fails to show that AFS had an implied contract that would be enforceable under Texas law. Because AFS has not adequately pled a violation of the Due Process Clause, its § 1983 procedural due process claim fails.

First Amendment

AFS alleges that Defendants issued the Memorandum of Disclosure after Stephens complained about QFT in an attempt to mischaracterize her concerns and attack her personally. In their motion to dismiss, Defendants argue this claim should be dismissed because: (1) AFS lacks...