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Walker v. Beaumont Independent School District

United States Court of Appeals, Fifth Circuit

September 18, 2019

CALVIN GARY WALKER; WALKER'S ELECTRIC; WALKERS ELECTRIC; JESSIE HAYNES, Plaintiffs - Appellants
v.
BEAUMONT INDEPENDENT SCHOOL DISTRICT; AARON COVINGTON; LEROY SALEME; VERNON BUTLER;JANE KINGSLEY; TERRY INGRAM; MICHAEL "MIKE" NEIL; TOM NEILD; VENICE MONROE; A. B. BERNARD; JIMMY SIMMONS; ROBERT TURNER; JOE DOMINO; LENNY CABARELLO; JACK CARROLL; BEAUMONT EXAMINER; DON DODD; JENNIFER JOHNSON; BEAUMONT ENTERPRISE; BROOKE CRUM; INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS; LOCAL UNION 479,INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS; STEVEN LISLE; DUWAYNE HERRMANN, also known as Dwayne Hermann; CHRIS KIBBY; DAVID GONZALES; WAYNE REAUD; MICHAEL GETZ; CORY CRENSHAW; MALCOLM BALES; JERRY JORDAN; BOB RAWLS;TIMOTHY BREWER; DEANNA STEVENS, Defendants - Appellees

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

          Before SMITH, DUNCAN, and ENGELHARDT, Circuit Judges.

          KURT D. ENGELHARDT, CIRCUIT JUDGE.

         With this appeal, we review the district court's dismissal of the entirety of Appellants' claims pursuant to the Texas Citizens' Participation Act, ("TCPA"), Tex. Civ. Prac. & Rem. Code, §§ 27.001-27.011 (West) and Rule 12 of the Federal Rules of Civil Procedure. For the reasons stated herein, we AFFIRM that dismissal as to all claims and all parties named herein as defendants.[1]

         Background

         Plaintiff Calvin Gary Walker ("Walker"), Walkers Electric, and Walker's Electric originally filed suit in July 16, 2015, in the United States District Court for the Eastern District of Texas, Marshall Division. The Walker action was consolidated, on February 23, 2016, with a related case, Haynes v. Crenshaw, et al. (civ. action no. 1:15-CV-437), filed by Plaintiff Jessie Haynes ("Haynes"). Following transfer from the Marshall Division to the Beaumont Division, Plaintiffs-Appellants ("Appellants" or "Plaintiffs") Walker and Haynes filed a consolidated Fourth Amended Complaint on December 22, 2015.

         As set forth in the Fourth Amended Complaint, Appellants assert that they are the victims of an extensive, long-lasting conspiracy ("conspiracy" or "Conspiracy") designed to prevent African-American individuals in Beaumont from gaining power and influence in order to perpetuate "white dominion over Beaumont local politics." This conspiracy, spanning approximately a decade, allegedly involved approximately 35 residents and organizations in the Beaumont area, including the Beaumont Independent School District ("BISD"), the BISD Board of Trustees and subsequent BISD Board of Managers, two local newspapers and their employees, two online journalists, the local chapter of the International Brotherhood of Electrical Workers ("IBEW") and several of its members, a Beaumont City Councilperson, two local attorneys, the United States Attorney for the Eastern District of Texas, two Assistant United States Attorneys, and two agents with the Federal Bureau of Investigation ("FBI"). The objective of this alleged conspiracy was to ruin Appellants' reputations and businesses as part of a larger campaign to harm minority individuals who "stepped out of line" and "defied the status quo."

         I. Walker

         Walker is a Master Electrician and owner of Walker's Electric Company, which offers electrical services in Beaumont. He asserts that the conspiracy against him began around 2004 when members of IBEW asked him to join and he refused, at which point he was told that the union would "get him one way or another." Walker then contracted to provide electrical services to the BISD, a position that had previously been held by an IBEW member. In April 2008, IBEW filed a complaint against Walker with the Texas Department of Licensing and Registration ("TDLR"), asserting that Walker had obtained his electrician's license through fraud. Although Walker initially contested the matter and continues to assert that IBEW was behind and heavily involved with the investigation, he ultimately agreed to pay a fine, relinquish his Master Electrician's license, and re-take the required licensing exam.

         Walker asserts that IBEW then conspired with BISD board members to ruin Walker's reputation and business. According to Walker, the BISD board members complained at BISD Executive Cabinet meetings that he was making too much money for a minority and was a sloppy businessman. He additionally avers that BISD personnel sought to ensure that he did not get any other contracts with the BISD and imposed onerous record-keeping requirements upon him. Specifically, Walker contends that he, a black non- union electrician, was the only contractor required to submit detailed invoices. He further alleges that, in 2008, BISD Chief Financial Officer Jane Kingsley, acting on behalf of the BISD, attempted (unsuccessfully) to ensure Walker's contract with the BISD was not renewed by illegally conducting the bid process.

         Having failed to prevent Walker from contracting with the BISD, the IBEW and the BISD allegedly next turned to Malcolm Bales, the United States Attorney for the Eastern District of Texas, to prompt Walker's May 2011 indictment on 37 counts of fraud. In addition, Walker alleges that Deanna Stevens and Timothy Brewer-the FBI agents involved in his prosecution-tampered with potential witnesses during his trial, offering bribes to one and threatening two others. Members of the United States Attorney's Office also allegedly leaked information about Walker's case to members of the IBEW and the BISD. Walker was tried on the fraud counts in December 2011, which resulted in a hung jury and mistrial.

         Subsequently, on July 17, 2012, Walker pleaded guilty to one count of willful failure to pay income taxes. He complains that members of the conspiracy, including members of the press and the BISD's Board of Trustees, thereafter relentlessly smeared him by wrongfully stating that he had pleaded guilty to defrauding the BISD and that he had agreed to repay it for the money that he had stolen. Walker asserts that, although the records of the BISD contained altered documents, there was no evidence admitted at trial that Walker or his wife submitted those documents to the BISD in connection with receiving payments for projects. Walker additionally alleges that Bob Rawls, the Assistant United States Attorney assigned to the case, urged the BISD to cease doing business with Walker and sent letters to a number of government entities and individuals, falsely informing them that Walker was a thief.

         Walker complains that members of the conspiracy continued to engage in a smear campaign against him and that BISD board members and other conspirators repeatedly stated that Walker had admitted to submitting fraudulent invoices. Walker further contends that members of this conspiracy joined with their media allies at The Examiner, The Beaumont Enterprise, and two websites to spread these allegedly unfounded allegations. Unidentified members of the conspiracy also purportedly interfered with Walker's existing contract with BISD by improperly terminating his contract in 2014. Accordingly, Walker alleges he was prevented from being awarded the BISD contract and lost substantial business from other prospective customers because the BISD's "Evaluation Matrix," prepared by BISD (Employee) Appellees – Leroy Saleme (BISD Chief Financial Officer), Aaron Covington (BISD Director of Contracts), and Vernon Butler (BISD Superintendent) – to compare contractors, falsely represented that he had admitted to padding BISD invoices, along with other purported falsehoods.

         Walker further contends that the conspiracy has continued such that that United States Attorney Bales, unsatisfied with Walker's plea of guilty to willful failure to file income taxes, has conspired with the Jefferson County District Attorney Cory Crenshaw, a former Assistant United States Attorney, to form a joint task force in order to prosecute Walker in state court, despite the BISD's internal audit's having revealed he had not defrauded the BISD.

         II. Haynes

         Haynes, too, allegedly was victimized by the conspiracy for supporting (former) BISD Superintendent Carroll Thomas. Specifically, she claims that BISD Board of Trustees member Michael Neil pushed her away from a door leading to a press conference at BISD after she prevented Jerry Jordan, a journalist for SETInvestigates.com, from entering the press conference. Additionally, rather than Neil's being prosecuted for assault, Haynes was prosecuted and subsequently convicted in state court for obstruction of a public passageway. She additionally claims that, at her trial, at which Neil, Jordan, and City Councilperson Michael Getz (who was also present outside the press conference) testified, and Wayne Reaud, owner of the Beaumont Examiner, a Media-Appellee, was present, was a product of the RICO racketeering enterprise and conspiracy. She alleges "the Conspiracy engaged in a concerted campaign to harass [her], tarnish her reputation, attack her integrity, and threat[en] criminal and/or administrative repercussions." Also allegedly included in the campaign was Neil's attendance at an incident where individuals marched down the BISD's hallways chanting "Fire Jessie [Haynes] now," responding "lol" to an online comment about Haynes' criminal conviction and involvement in a verbal altercation in a parking lot with two of Haynes' supporters. Haynes adds that that the conspiracy also attacked a book that she wrote.

         To aid the panel's understanding of their claims, Appellants' brief includes the chart set forth below, which generally identifies the claims asserted along with the corresponding appellant(s) and appellee(s). Appellants identify six categories of Appellees. "Conspiracy" refers to all of the Appellees collectively. The other five categories of Appellees identified by Appellants are: the Media Appellees, City Councilperson Getz, the IBEW Appellees, the BISD Appellees, and the Prosecutors.

Claim

Appellant(s)

Appellee(s)

Defamation

Walker

Libel

Walker

Media Appellees

Slander

Walker

Conspiracy

Tortious Interference

With Existing Contract

Walker

Conspiracy

With Prospective Contracts

Walker

Conspiracy

Civil Rights Violation

Walker

BISD Appellees

Civil Conspiracy (State Law)

Walker

Conspiracy

RICO

§1962(c) – racketeering

Walker

BISD Appellees

Haynes

Neil, Crenshaw, Jordan, Reaud, and Getz

§1962(a) – use of income from pattern of racketeering

Walker

IBEW Appellees

§1962(d) - Conspiracy

Walker and Haynes

Conspiracy

Assault

Haynes

Neil

         In response to the Fourth Amended Complaint, the Appellees filed multiple motions to dismiss. The IBEW Appellees moved pursuant to Federal Rule of Civil Procedure ("FRCP") 12(c). All other Appellees moved for dismissal under FRCP 12(b)(6) and/or the Texas Citizens Participation Act ("TCPA"). In addition, the BISD Appellees moved for dismissal under FRCP 12(b)(1), and the BISD moved for dismissal of the individual BISD Employees, Board of Managers,[2] and Trustees (collectively the "BISD Agents") under the Texas Tort Claims Act ("TTCA"), Tex. Civ. Prac. & Rem. Code § 101.106.

         With the issuance of eleven written rulings by District Judge Crone (considering nine "Reports and Recommendations" issued by Magistrate Judge Giblin), all claims against all defendants were dismissed on one or more grounds. This appeal followed.

         Standard of Review

         Under FRCP 12(b)(1), a party may challenge the subject matter jurisdiction of the court to hear a case. Sovereign immunity deprives the court of subject matter jurisdiction. Iraheta v. Linebarger Goggan Blair & Sampson, L.L.P., 734 F.App'x 216, 219 (5th Cir. 2018). We review dismissal for lack of subject matter jurisdiction de novo. Id. Lack of subject matter jurisdiction may be found in any one of three instances: (1) the complaint alone; (2) the complaint supplemented by undisputed facts evidenced in the record; or (3) the complaint supplemented by undisputed facts plus the court's resolution of disputed facts.

         FRCP 12(c) permits a party to move for a judgment on the pleadings. "A Rule 12(c) motion may dispose of a case when there are no disputed material facts and the court can render a judgment on the merits based on 'the substance of the pleadings and any judicially noted facts.'" Linicomn v. Hill, 902 F.3d 529, 533 (5th Cir. 2018) (quoting Machete Prods., L.L.C. v. Page, 809 F.3d 281, 287 (5th Cir. 2015)). A Rule 12(c) motion is subject to the same standard as a motion to dismiss under FRCP 12(b)(6). Doe v. Myspace, Inc., 528 F.3d 413, 418 (5th Cir. 2008).

         An appellate court conducts a de novo review of a district court's dismissal of a complaint under FRCP 12(b)(6). See Clyce v. Butler, 876 F.3d 145, 148 (5th Cir. 2017). We may affirm a district court's order dismissing a claim under Rule 12(b)(6) "on any basis supported by the record." Taylor v. City of Shreveport, 798 F.3d 276, 279 (5th Cir. 2015)

         FRCP 12(b)(6) authorizes the filing of motions to dismiss asserting, as a defense, a plaintiff's "failure to state a claim upon which relief can be granted." See Fed. R. Civ. P. 12(b)(6). Thus, claims may be dismissed under Rule 12(b)(6) "on the basis of a dispositive issue of law." Neitzke v. Williams, 490 U.S. 319, 326 (1989). Dismissal under FRCP 12(b)(6) also is warranted if the complaint does not 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)). Where the well-pleaded facts of a complaint do not permit a court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not 'show[n]'-"that the pleader is entitled to relief." Iqbal, 556 U.S. at 678 (quoting Fed. Rule Civ. P. 8(a)(2)). Accordingly, a complaint's allegations "must make relief plausible, not merely conceivable, when taken as true." United States ex rel. Grubbs v. Kanneganti, 565 F.3d 180, 186 (5th Cir. 2009); see also Twombly, 550 U.S. at 555 ("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).").

         "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. Factual allegations that are "merely consistent with a defendant's liability, stop short of the line between possibility and plausibility of entitlement to relief," and thus are inadequate. Id. (internal quotations omitted). Accordingly, the requisite facial plausibility exists "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. (emphasis added). Even so, however, a "well-pleaded complaint may proceed even if it appears that a recovery is very remote and unlikely." Twombly, 550 U.S. at 556. Finally, "[d]etermining whether a complaint states a plausible claim for relief" is "a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 556 U.S. at 679 (internal citations omitted). See also Robbins v. Oklahoma, 519 F.3d 1242, 1248 (10th Cir. 2008) (degree of required specificity depends on context, i.e., the type of claim at issue).

         In evaluating motions to dismiss filed under Rule 12(b)(6), the Court "must accept all well-pleaded facts as true, and . . . view them in the light most favorable to the plaintiff." Campbell v. Wells Fargo Bank, N.A., 781 F.2d 440, 442 (5th. Cir.). Further, "[a]ll questions of fact and any ambiguities in the controlling substantive law must be resolved in the plaintiff's favor." Lewis v. Fresne, 252 F.3d 352, 357 (5th Cir. 2001). On the other hand, courts "are not bound to accept as true a legal conclusion couched as a factual allegation." Papasan v. Allain, 478 U.S. 265, 286 (1986); see also Iqbal, 556 U.S. at 678 ("tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions."). "Nor does a complaint suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.' " Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 557); see also Christopher v. Harbury, 536 U.S. 403, 416 (2002) (elements of a plaintiff's claim(s) "must be addressed by allegations in the complaint sufficient to give fair notice to a defendant").

         In determining whether a plaintiff's claims survive a Rule 12(b)(6) motion to dismiss, the factual information to which the court addresses its inquiry is limited to the (1) the facts set forth in the complaint, (2) documents attached to the complaint, and (3) matters of which judicial notice may be taken under Federal Rule of Evidence 201. See Norris v. Hurst Trust, 500 F.3d 454, 461, n. 9 (5th Cir. 2007); R2 Invs. LDC v. Phillips, 401 F.3d 638, 640, n. 2 (5th Cir. 2005). Judicial notice may be taken of matters of public record. Firefighters' Retirement Sys., v. Eisneramper, 898 F.3d 553, 558 n.2 (5th Cir. 2018). When a defendant attaches documents to its motion that are referred to in the complaint and are central to the plaintiff's claims, the court may also properly consider those documents. Causey v. Sewell Cadillac-Chevrolet, Inc., 394 F.3d 285, 288 (5th Cir. 2004); In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007). "In so attaching, the defendant merely assists the plaintiff in establishing the basis of the suit, and the court in making the elementary determination of whether a claim has been stated." Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 499 (5th Cir. 2000).

         Analysis

         In presenting the issues for review on appeal, Appellants generally assert the district court erred in dismissing their claims on pleading grounds and/or defenses asserted by Appellees, including statute of limitations, preemption by the National Labor Relations Act ("NLRA"), 29 U.S.C. § 151, et seq., and federal and state immunity (prosecutorial, official/absolute, or qualified.) Appellants provide the following summary of their argument:

This case is about a conspiracy between union members, prosecutors, a school district, and the media to remove African Americans such as Walker and Haynes from positions of power in Beaumont, Texas. After their initial efforts to prosecute Walker for allegedly defrauding [the] BISD through its electrical services contract failed, the Conspiracy ramped up their efforts to tarnish Walker's reputation and destroy his career. When Haynes, a member of [the] BISD's Superintendent's Executive Cabinet, supported the Superintendent and stood up for Walker, the Conspiracy turned to her.
The district court erred in dismissing Appellants' claims by demanding more than is required under Rule 12(b) and the TCPA. The court treated Appellees' motions to dismiss as if they had been summary judgment motions but did not give Appellants an opportunity to conduct even limited discovery before deciding they did not have sufficient allegations or evidence to support their claims. In determining the sufficiency of Appellants' allegations, the court pulled statements out of context, and demanded allegations specific to each individual Appellee notwithstanding the rule that co-conspirators are responsible for each other's acts. The court also erred in finding Appellants' claims against the IBEW Defendants preempted under the NLRA, and that the BISD Defendants and Prosecutors are entitled to immunity. The BISD Defendants were not acting within the scope of their employment – particularly Neil when he physically assaulted Haynes. At a minimum, fact issues exist.

         I. The Texas Citizens Participation Act "TCPA")

         As an initial matter, we note that, until recently, uncertainty existed in this circuit relative to the applicability of the Texas Citizens Participation Act ("TCPA") Tex. Civ. Prac. & Rem. Code, §§ 27.001-27.011, in federal courts.[3]See, e.g., Cuba v. Pylant, 814 F.3d 701, 706 n.6 (5th Cir. 2016) (assuming without deciding that the TCPA's (state) procedural rules apply in federal court); Cuba, 814 F.3d at 718 (Graves, J., dissenting) (the TCPA conflicts with FRCP 12); NDCR, L.L.C. v. Mauze & Bagby, P.L.L.C., 745 F.3d 742, 746 (5th Cir. 2014) (arguments that TCPA conflicts with FRCP 12(d) and Federal Rule of Appellate Procedure 4 waived because not raised in district court). In this matter, the district court determined that dismissal of Appellants' claims was warranted regardless of whether its analysis was governed by the TCPA or the FRCP.

         Recently, however, another panel of this court held: "[b]ecause the TCPA's burden-shifting framework imposes additional requirements beyond those found in [FRCP] 12 and 56 and answers the same question as those rules, the state law cannot apply in federal court." Klocke v. Watson, No. 17-11320, 2019 WL 3977545, at *4 (5th Cir. Aug. 23, 2019). Further, '[i]n contrast to the federal procedural requirements, the TCPA imposes additional requirements that demand judicial weighing of evidence." Id. "Because the TCPA imposes evidentiary weighing requirements not found in the Federal Rules, and operates largely without pre-decisional discovery, it conflicts with those rules." Id.

         Within a few days of the issuance of the Klocke opinion, we received a letter from counsel, submitted pursuant to Federal Rule of Appellate Procedure 28(j),[4] discussing Klocke's potential relevance to the Examiner Appellees.[5] As part of its discussion, the Examiner Appellees reiterate their assertion that Appellants have waived, abandoned, or are estopped from asserting any objection to the application of the TCPA in federal court. Moreover, the Examiner Appellees argue, the district court's orders of dismissal should be affirmed under FRCP 12(b)(6).

         To date, none of the other parties have submitted a FRAP 28(j) letter regarding Klocke. We anticipate, however, that the other Appellees likely agree with the Examiner Appellees' position, whereas Appellants will argue that their position is and always has been that they, by conceding their state law claims involve statements to which the TCPA applies (except for the assault claim against Appellee Neil), did not concede, waive, or abandon the argument that the TCPA's heightened pleading/evidentiary standard runs afoul of the pleading/discovery/evidentiary requirements of FRCP 8, 12, and 56. [6] We need not resolve this particular dispute, however, because we, like the district court, find dismissal warranted under the Federal Rules of Civil Procedure, for the reasons stated herein, without consideration of the TCPA.

         II. RICO claims

         Walker and Haynes assert RICO violations against various Appellees pursuant to 18 U.S.C. §§ 1962(a), 1962(c), and 1962(d). These claims require Appellants to properly allege a RICO "enterprise" and "pattern" of "racketeering activity." The district concluded ...


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