Anderton v. Tex. Parks & Wildlife Dep't

JAMES ANDERTON; JIMMIE ANDERTON, Plaintiffs - Appellants v. TEXAS PARKS AND WILDLIFE DEPARTMENT; TEXAS ANIMALHEALTH COMMISSION; CARTER SMITH, Executive Director, Texas Parksand Wildlife Department; CRAIG HUNTER, Director, Texas Parks andWildlife Department; L. DAVID SINCLAIR, Chief Game Warden, TexasParks and Wildlife Department; MITCH LOCKWOOD, Big Game Warden,Texas Parks and Wildlife Department; DALE WATERS, Game Warden,Texas Parks and Wildlife Department; GARY COLLINS, Game Warden,Texas Parks and Wildlife Department; BRAD CHAPPELL, Investigator,Texas Parks and Wildlife Department; AMBER ANDEL, Deer BreedersProgram, Texas Parks and Wildlife Department, Defendants - Appellees

No. 14-10297

UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT

March 26, 2015

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

No. 3:13-CV-01641

Before BENAVIDES, SOUTHWICK, and COSTA, Circuit Judges.

PER CURIAM:^*

Plaintiffs James and Jimmie Anderton appeal the district court's dismissal of Section 1983 and RICO claims brought against officials of the Texas Parks & Wildlife Department ("the Department"). The Andertons also claim the district court abused its discretion by failing to provide them an opportunity to file an amended complaint. We AFFIRM.

FACTUAL AND PROCEDURAL BACKGROUND

From 2000 until 2010, the Andertons possessed a current permit issued by the Department that authorized them to breed deer. Their breeding ranch was located east of Dallas in Quinlan, Texas. In 2010, 2011, and 2012, the Andertons submitted applications for renewal of the permit. The Department denied those applications without explanation.

It has been alleged in this litigation that the Andertons's permit was not renewed because they had illegally imported deer from another state. The Andertons had pled guilty, as shown in a federal court judgment of February 2, 2010, to the offense of conspiring to transport wildlife in interstate commerce in violation of Texas law. The Andertons were charged under the general federal conspiracy statute, 18 U.S.C. § 371. The substantive federal statutes setting forth the offense were 16 U.S.C. §§ 3372(a)(2)(A) and 3373(d)(2). Those are sections of what is called the Lacey Act. 16 U.S.C. §§ 3371-3378. The Texas laws they were charged in an information with violating were 31 Texas Administration Code Sections 65.609(b)(2), 65.611(h), and 65.611(i). The Department may refuse permit issuance or renewal to any person convicted of a violation of the Lacey Act. 31 TEX. ADMIN. CODE § 65.603(g)(2) (2010).

As mentioned above, the Andertons deer-breeding permit was not renewed in 2010. Such a permit is valid from the date of issuance until the immediately following July 1. 31 TEX. ADMIN. CODE 65.603(c). Apparently, then, as of July 1, 2010, four months after their February convictions, they no longer had a current permit to maintain breeder deer. On December 6, 2010,and May 1, 2011, Department officials entered and shot breeder deer on the Andertons' land. The Andertons allege the officials killed the deer in front of their family and several witnesses.

In April 2013, the Andertons brought suit in the United States District Court for the Northern District of Texas against the Texas Animal Health Commission and the Department for violations of the Fourth, Fifth, and Fourteenth Amendments, and the Racketeer Influenced and Corrupt Organizations Act ("RICO"). They also sued several Department officials in their official and individual capacities under 42 U.S.C. § 1983 and RICO. Additionally, they brought claims for injunctive and declaratory relief against all parties. The district court dismissed the Andertons' Section 1983 and RICO claims against the officials in their individual capacities under Federal Rule of Civil Procedure 12(b)(6), and dismissed the remaining claims under Rule 12(b)(1). The Andertons appealed.

DISCUSSION

We review a dismissal under Rule 12(b)(6) de novo. Alabama-Coushatta Tribe of Tex. v. United States, 757 F.3d 484, 487 (5th Cir. 2014) (citation omitted). To survive a motion to dismiss, "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly, 550 U.S. at 556).

A claim under 42 U.S.C. Section 1983 requires that a plaintiff "(1) allege a violation of a right secured by the Constitution or laws of the United States and (2) demonstrate that the alleged deprivation was committed by a person acting under color of state law." Doe ex rel. Magee v. Covington Cnty. Sch. Dist.ex rel. Keys, 675 F.3d 849, 854 (5th Cir. 2012) (citation and quotation marks omitted). Any rights the Andertons might have would arise from the Texas statutes and regulations governing breeder-deer operations. One statute provides that the "department shall issue a permit to a qualified person to possess live breeder deer¹ in captivity." TEX. PARKS & WILD. CODE § 43.352.² "[B]reeder deer may be held in captivity for propagation in [Texas] only after a deer breeder's permit is issued by the department[.]" Id. § 43.364. The permit may be renewed annually, subject to certain requirements and exceptions. See 31 TEX. ADMIN. CODE § 65.603(d), (g).

The Andertons raise six issues on appeal, which we will analyze in the following order:

1. The district court erred in dismissing their Fourth Amendment claims.

2. The district court erred in dismissing their substantive due process claims.

3. The district court erred in dismissing their procedural due process claims.

4. Alternatively, the district court abused its discretion by dismissing their Section 1983 claims partially on grounds raised by the court sua sponte without providing an opportunity to replead.

5. The district court abused its discretion by dismissing their RICO claim based on pleading defects raised by the court sua sponte without providing an opportunity to replead.

6. They stated cognizable claims against the defendants in their official capacities for declaratory relief based on the defendants' failure to renew their deer breeder permit.

1. Fourth Amendment - Search and Seizure

The Andertons' complaint alleges that the defendants engaged in both an unconstitutional search of their property and an unconstitutional seizure - the killing of the deer. The defendants did not obtain a warrant for either the search or the seizure.

"Warrantless searches and seizures are per se unreasonable unless they fall within a few narrowly defined exceptions." United States v. McKinnon, 681 F.3d 203, 207 (5th Cir. 2012) (citation and quotation marks omitted). One such exception is for a "closely regulated" industry. See New York v. Burger, 482 U.S. 691, 702 (1987). Under this exception,

a warrantless search of a pervasively regulated business is permitted if: (1) there is a substantial government interest that informs the regulatory scheme pursuant to which the inspection is made; (2) the inspection is necessary to further the regulatory scheme; and (3) the statutory or regulatory scheme provides a constitutionally adequate substitute for a warrant.

United States v. Castelo, 415 F.3d 407, 409-10 (5th Cir. 2005) (citing Burger, 482 U.S. at 702-03).

The Andertons argue that the breeder-deer industry is not a closely regulated industry. An industry is "closely regulated" where the "provisions regulating the [industry] are extensive." Burger, 482 U.S. at 704. The Court found the operation of a junkyard to be closely regulated because the regulations required the operator to "obtain[] a license," "maintain [records]," and "make such records . . . available for inspection[.]" Id. The operator was also "subject to criminal penalties . . . for failure to comply with these provisions." Id. at 704-05.

As in Burger, under Department statutes and regulations a deer breeder must obtain a permit, keep detailed records, and submit reports, and is subject to inspection of facilities and records at any time. TEX. PARKS & WILD. CODE §§ 43.358, 43.359, 43.364; 31 TEX. ADMIN. CODE § 65.608. Violation of thestatutes or regulations may result in nonrenewal of a deer breeder's permit and criminal penalties. TEX. PARKS & WILD. CODE §§ 43.365, 43.367; 31 TEX. ADMIN. CODE § 65.603. Accordingly, the provisions regulating the deer breeder industry are sufficiently "extensive" to place that activity "squarely within the class of industries to which Burger applies." Castelo, 415 F.3d at 410 (citation omitted); see also United States v. Fort, 248 F.3d 475, 480 (5th Cir. 2001) (holding that where an industry is governed by "extensive" regulations, the Burger principles apply).

The Andertons next argue that the deer-breeder statutes and regulations are not an adequate substitute for a warrant. To provide a constitutionally adequate substitute for a warrant, a regulatory scheme "must perform the two basic functions of a warrant: it must advise the owner of the commercial premises that the search is being made pursuant to the law and has a properly defined scope, and it must limit the discretion of the inspecting officers." Burger, 482 U.S. at 703 (citations omitted). The statute or regulation must put the owner on notice "that his property will be subject to periodic inspections undertaken for specific purposes," and "must be carefully limited in time, place, and scope." Id. (citations and quotation marks omitted).

We held a warrantless stop of a commercial trucker to be reasonable under the closely regulated industry exception. See Castelo, 415 F.3d at 411. The regulatory scheme was an adequate substitute for a warrant because the statutes "provide[d] notice to commercial drivers that they may be subject to random stops and...