Salinas v. Tex. Workforce Comm'n

OSCAR SALINAS v. TEXAS WORKFORCE COMM'N, et al.

A-11-CA-559-LY

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS AUSTIN DIVISION

SIGNED: August 22, 2013

REPORT AND RECOMMENDATION

OF THE UNITED STATES MAGISTRATE JUDGE

TO: THE HONORABLE LEE YEAKEL

UNITED STATES DISTRICT JUDGE

Before the Court are Defendants' Motion to Dismiss, filed on April 9, 2013 (Dkt. # 15), Plaintiff's Response, filed on April 22, 2013 (Dkt. # 20) and Defendant's Reply, filed on April 26, 2013 (Dkt. # 21). The undersigned submits this Report and Recommendation to the United States District Court pursuant to 28 U.S.C. § 636(b) and Rule 1(h) of Appendix C of the Local Court Rules of the United States District Court for the Western District of Texas, Local Rules for the Assignment of Duties to United States Magistrate Judges

I. GENERAL BACKGROUND

Plaintiff Oscar Salinas ("Salinas") was employed as a part-time English professor with Houston Community College System during the Spring semester of 2010. After Salinas was laid off, he filed a claim with the Texas Workforce Commission ("TWC") to collect unemployment benefits pursuant to the Texas Unemployment Compensation Act ("Act"). On November 5, 2010, the TWC notified Salinas that he had been paid unemployment benefits to which he was not entitled, causing an overpayment of $422.00 in unemployment benefits and ordered him to repay that amount, pursuant to Section 212.006¹ of the Act. See Exh. A-10 to Complaint. The TWC had determinedthat Salinas had been erroneously paid unemployment benefits for the period from March 14, 2010, through March 20, 2010, when the college was closed for Spring Break.² Also on November 5, 2010, the TWC issued a Determination that Salinas was ineligible to receive further unemployment benefits beginning on March 14, 2010, because he had failed to report to the TWC Tele-center as required by Section 207.021(a)(1)³ of the Act. See Exh. A-8 to Complaint. On November 17, 2010, the TWC issued two more Determinations, notifying Salinas that (1) his base period wages had to be recalculated because "[o]ur investigation found that you have reasonable assurance of returning to work for a school in the following school year or term or holiday period" and (2) it would cease paying benefits for the period beginning on October 31, 2010, and ending on November 13, 2010, because Salinas had failed to report to the TWC Tele-center as instructed. See Exh. A-12 & Exh. A-14 to Complaint.

After Salinas appealed the TWC's Determinations, the Appeals Tribunal reversed its earlier decisions and found that Salinas was in compliance with the Act and did not owe the TWC any overpaid unemployment benefits. See Exh. A-20 & A-22 to Complaint. Subsequently, however, the TWC reviewed Salinas' case once again and issued a Determination that Salinas had indeed been overpaid $193.00 in unemployment benefits for the period of March 14, 2010, through March 20, 2010, when the college was closed for Spring Break, pursuant to Section 207.041 of the Act. Exh.A-24 to Complaint. The Appeal Tribunal and the Commission affirmed the decision. Exh. D-1 & Exh. K to Complaint. Salinas did not appeal the Commission's decision, thereby making it the Final Decision of the TWC. See TEX. LAB. CODE § 212.153 ("A decision of the commission becomes final 14 days after the date the decision is mailed unless before that date . . .a party to the appeal files a written motion for rehearing.").

Instead of exhausting his administrative remedies and requesting a rehearing with the Commission and thereafter seeking judicial review in state court,⁴ Salinas decided to "make a federal case out of it" and, on July 5, 2011, he filed this lawsuit against the TWC and nine of its employees (including TWC Appeal Tribunal Commissioners, Appeal Hearing Officers, supervisors and claims investigators). Salinas' Complaint alleges state law claims of conspiracy, intentional infliction of emotional distress, and negligence per se, as well as a federal due process claim under the Fourteenth Amendment. Salinas also requests that the Court issue a declaratory judgment that the Defendants have established and maintained "a policy, practice or custom of demanding repayment of benefits without evidence that the repayments are owed in the first place." Complaint at ¶ 78. Salinas alleges "that TWC personnel conspired to use unemployment benefits statutes and appeal procedures to subject him to harassment." Complaint at ¶ 6. Salinas further alleges that "Defendants engaged in a conspiracy of harassment with the intention of inflicting emotional distress." Complaint at ¶ 61. As an example, Salinas alleges that "[i]n flooding him with bogus Determinations- eight in all, seven of them regarding the same March 14, 2010, through March 20, 2010 week- defendants meant to make Plaintiff so confused, frustrated, and angry that he would not be able to cope with thepressure." Complaint at ¶ 62. "The experience took both an emotional and physical toll. The stress to which plaintiff is being subjected is taking its toll in the form of an exacerbated case of eczema." Complaint at ¶ 63. Additionally, Salinas alleges that Defendants "are grossly negligent in participating in a conspiracy to demand $193 in benefits overpaid . . . ." Complaint at ¶ 67. Salinas also contends that the Defendants denied him "his right to a fair and meaningful hearing" under the Fourteenth Amendment. Complaint at ¶ 69.

Defendants have now filed the instant Motion to Dismiss, pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), arguing that Salinas' case should be dismissed in its entirety.

II. STANDARD OF REVIEW

A motion to dismiss under Rule 12(b)(1) of the Federal Rules of Civil Procedure challenges a federal court's subject matter jurisdiction. See FED. R. CIV. P. 12(b)(1). Federal courts are courts of limited jurisdiction; without jurisdiction conferred by the Constitution and statute, they lack the power to adjudicate claims. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994) (citations omitted). They "must presume that a suit lies outside this limited jurisdiction, and the burden of establishing federal jurisdiction rests on the party seeking the federal forum." Howery v. Allstate Ins. Co., 243 F.3d 912, 916 (5th Cir.), cert. denied, 534 U.S. 993 (2001).

"When a Rule 12(b)(1) motion is filed in conjunction with other Rule 12 motions, the court should consider the Rule 12(b)(1) jurisdictional attack before addressing any attack on the merits." Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001), cert. denied, 536 U.S. 960 (2002). Considering Rule 12(b)(1) motions first "prevents a court without jurisdiction from prematurely dismissing a case with prejudice." Id. When a court dismisses for lack of subject matter jurisdiction, that dismissal "is not a determination of the merits and does not prevent the plaintiff from pursuing a claim in a court that does have proper jurisdiction." Id.

Federal Rule of Civil Procedure 12(b)(6) allows a party to move to dismiss an action for failure to state a claim upon which relief can be granted. FED. R. CIV. P. 12(b)(6). In deciding a Rule 12(b)(6) motion to dismiss for failure to state a claim, "[t]he court accepts all well-pleaded facts as true, viewing them in the light most favorable to the [nonmovant]." In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007) (internal quotation marks omitted), cert. denied, 552 U.S. 1182 (2008). To survive the motion, a nonmovant must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). "The court's task is to determine whether the plaintiff has stated a legally cognizable claim that is plausible, not to evaluate the plaintiff's likelihood of success." Lone Star Fund V (U.S.), L.P. v. Barclays Bank PLC, 594 F.3d 383, 387 (5th Cir. 2010). "Factual allegations 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 (even if doubtful in fact)." Id. at 555. "A claim has facial plausibility when the [nonmovant] pleads factual content that allows the court to draw the reasonable inference that the [movant] is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). "The plausibility standard is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id.

Rule 8(a)(2) of the Federal Rules of Civil Procedure 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 defendant fair notice of what the claim is and the grounds upon which it rests. Twombly, 550 U.S. at 555 (internal quotation marks and ellipsis omitted). 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. See Id. at 555 & n. 3. Thus, while a court must accept all of the factual allegations in the complaint as true, it need not credit bare legal conclusions that are unsupported by any factualunderpinnings. See Iqbal, 556 U.S. at 679 ("While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations").

III. ANALYSIS

Defendants argue that Salinas' case should be dismissed under Federal Rule of Civil Procedure 12(b)(1) and 12(b)(6) on the following grounds: (1) the TWC and Individual Defendants in their official capacity have immunity from suit under the Eleventh Amendment, and the Individual Defendants in their individual capacity have qualified immunity; (2) lack of proper service of process; (4) lack of standing; and (5) failure to state a claim upon which relief may be granted. The Court addresses the issue of subject...