Shotwell v. Department of Tourism and Recreation

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF OKLAHOMA

DONNA SHOTWELL, and d/b/a )

USA DOCK, INC., )

)

Plaintiffs, )

)

v. ) Case No. CIV-25-05-JFH-GLJ

)

THE STATE OF OKLAHOMA, ex rel., )

DEPARTMENT OF TOURISM AND )

RECREATION, SHELLEY ZUMWALT, )

Individually and in her official capacity )

As Executive Director the Oklahoma )

Department of Tourism and )

Recreation, UNITED STATES ARMY )

CORPS OF ENGINEERS, )

)

Defendants. )

REPORT AND RECOMMENDATION

This matter comes before the Court on the motion of Defendant Shelley Zumwalt,

in her individual and official capacity as Executive Director of the Oklahoma Department

of Tourism and Recreation, to dismiss the Amended Complaint against her pursuant to Fed.

R. Civ. P. 12(b)(1) and 12(b)(6). On July 15, 2025, the Court referred this case to the

undersigned Magistrate Judge for all further proceedings in accordance with jurisdiction

pursuant to 28 U.S.C. § 636. See Docket No. 31. For the reasons set forth below, the

undersigned Magistrate Judge recommends that Defendant Shelley Zumwalt’s Motion to

Dismiss and Brief in Support [Docket No. 20] be GRANTED.

PROCEDURAL HISTORY & BACKGROUND

Plaintiff originally brought this action against Defendants The State of Oklahoma,

ex rel., Department of Tourism and Recreation (“ODTR”) and Shelley Zumwalt, in both

her individual and official capacity as Executive Director of ODTR. See Docket No. 2.

Plaintiff subsequently amended the Complaint to add Defendant United States Army Corps

of Engineers (“Corps of Engineers”).1 See Docket No. 14. In both the Complaint and the

Amended Complaint, Plaintiff asserts claims for tortious interference with contract and

violation of her due process rights pursuant to 42 U.S.C. § 1983. See Docket Nos. 2 & 14.

Plaintiff’s claims arise out of a lease she and USA Docks entered into with ODTR

for a premises in Arrowhead State Park on Lake Eufaula to operate a business providing a

marina and related services (“Lease”). 2 See Docket No. 14, ¶¶ 7 & 9. ODTR leases the

property on which the leased premises is located from the Corps of Engineers. Id., ¶ 8.

Plaintiff alleged that after inspections by the Corps of Engineers and Oklahoma State Parks

Director of Business Services3 in October 2022, she was given notice of certain lease

violations and, due to health and safety concerns, was given 30 days to cure the violations.

Id., ¶¶ 13-14. Plaintiff further alleges that “both the Defendants” conducted follow-up

1 The Corps of Engineers was recently served with summons but has not yet entered an appearance

or otherwise filed any responsive pleading.

2 It is unclear if Ms. Shotwell is the only Plaintiff because the Amended Complaint lists her

individually and USA Dock, Inc. as a “doing business as” entity through which she was operating

the marina, and the Lease refers to USA Docks and Donna Shotwell collectively as the Lessee.

See Docket No. 14. When the Lease was renewed in 2010, it lists Arena 51 Marina @ Arrowhead,

LLC as the successor to USA Docks, but is signed by Shotwell as the “owner.” See Docket No.

20, Ex. 1. ODTR does not appear to dispute that Ms. Shotwell is a real party in interest with privity

as a party to the Lease.

3 Plaintiff does not identify if this is an agency within ODTC.

inspections in December 2022 and March 2023 during which more deficiencies were found

and noted that previous deficiencies had not been corrected. Id., ¶ 14. Plaintiff does not

attach any of the deficiency notices to her Amended Complaint. In a Notice of Termination

letter dated April 14, 2023, ODTR notified Plaintiff that due to the ongoing issues

surrounding the Lease, it was terminating the Lease pursuant to Section 9(a) as of May 11,

2023 (“Termination Letter”). Id., Ex. 2. Section 9(a) of the Lease provides that:

[a]ny violation by Lessee of the terms of this Agreement shall be grounds for

termination of this Agreement by State. Notice of the violation shall be

provided to Lessee along with a time period within which Lessee shall

remedy the violation. If the violation is not cured, the lease may be

terminated by the State provided that thirty (30) days written notice of

termination is given to the Lessee.

Id., Ex. 1. The Termination Letter further states that all personal property must be removed

from the leased premises by May 11, 2023 and that “[a]ny personal property remaining as

of May 12th, 2023 will be considered abandoned and will become the property of the

Department.” Id., Ex. 2. Plaintiff alleges that she spent several thousand dollars correcting

the deficiencies noted in the October 2022, December 2022 and March 2023 inspections.

Id., ¶ 19. The Amended Complaint is silent as to what, if anything, happened after May

11, 2023, including whether the Lease was terminated and/or any of Plaintiff’s property

was declared abandoned or seized by ODTR.

Although not mentioned in the Amended Complaint, prior to the proposed Lease

Termination date, on May 8, 2023, Plaintiff filed a lawsuit in the District Court of

Oklahoma County styled and numbered, Donna Shotwell, individually and dba USA Dock,

Inc. v. The State of Oklahoma, ex rel., Department of Tourism and Recreation, CJ-2023-

2622 (Oklahoma Lawsuit).4 The Oklahoma Lawsuit arose out of the same underlying facts

as this action regarding the Lease and Lease Termination, and Plaintiff sought a temporary

restraining order against ODTR, declaratory judgement and anticipatory breach of contract.

Id. On the same day the Oklahoma Lawsuit was filed, May 8, 2023, Plaintiff obtained a

temporary restraining order prohibiting ODTR from terminating the Lease or seizing any

of Plaintiff’s property subject to the Lease. Id. Oklahoma subsequently moved to dismiss

the action, arguing the petition failed to comply with the Oklahoma Declaratory Judgment

Act because it did not join the Corps of Engineers as a party and that the Corps was a

necessary party. Id. On August 14, 2023, the court dismissed with action without prejudice

without any statement of the grounds. Id. Subsequently, the court denied Plaintiff’s motion

to reconsider and motion to amend her petition. Id. Plaintiff then filed this action on

January 6, 2025. See Docket No. 2.

Analysis

I. Legal Standards

Federal Rule of Civil Procedure 8(a) requires Plaintiff to state her claims intelligibly

to give fair notice of the claims to opposing parties and the Court. Mann v. Boatright, 477

F.3d 1140, 1148 (10th Cir. 2007); Monument Builders of Greater Kansas City, Inc., v.

American Cemetery Ass’n of Kansas, 891 F.2d 1473, 1480 (10th Cir. 1989). Imprecise

4 See https://www.oscn.net/dockets/GetCaseInformation.aspx?db=oklahoma&number=CJ-2023-

2622. The Court may take judicial notice of both its own docket sheets and other state or federal

court docket sheets. United States v. Ahidley, 486 F.3d 1184,1192, n. 5 (10th Cir. 2007) (“We

may exercise our discretion to take judicial notice of publicly-filed records in our court and certain

other courts concerning matters that bear directly upon the disposition of the case at hand.”).

pleadings undermine the utility of the complaint and violate that purpose of Rule 8. See

Knox v. First Security Bank of Utah, 196 F.2d 112, 117 (10th Cir. 1952). Additionally,

while often stated in the context of a § 1983 claim, individual defendants are not to be

lumped together as a group, but should be treated as individuals, each with the Plaintiff’s

own claims against each individual defendant, based on each individual defendant’s own

behavior. See Pahls v. Thomas, 718 F.3d 1210, 1225 (10th Cir. 2013) (because § 1983 is

a “vehicle[ ] for imposing personal liability on government officials, we have stressed the

need for careful attention to particulars, especially in lawsuits involving multiple

defendants.”); Robbins v. Okla. ex rel. Dep’t of Human Servs., 519 F.3d 1242, 1250 (10th

Cir. 2008) (stating complaint must “make clear exactly who is alleged to have done what

to whom, to provide each individual with fair notice as to the basis of the claims against

him . . . as distinguished from collective allegations”) (citing Twombly, 550 U.S. at 565

n.10,); Tonkovich v. Kan. Bd. of Regents, 159 F.3d 504, 532-533 (10th Cir. 1998) (holding

district court’s analysis of plaintiff's § 1983 claims was “infirm” where district court

“lump[ed]” together plaintiff's claims against multiple defendants – “despite the fact that

each of the defendants had different powers and duties and took different actions with

respect to [plaintiff]” – and “wholly failed to identify specific actions taken by particular

defendants that could form the basis of [a] claim”). See also Goff v. Hukill, 2010 WL

2595785, at *7 (N.D. Okla. June 24, 2010) (noting the absence of any allegations regarding

each defendants’ conduct).

Motions to dismiss under Rule 12(b)(1) “generally take one of two forms. The

moving party may (1) facially attack the complaint’s allegations as to the existence of

subject matter jurisdiction, or (2) go beyond allegations contained in the complaint by

presenting evidence to challenge the factual basis upon which subject matter jurisdiction

rests.” Merrill Lynch Bus. Fin. Servs., Inc. v. Nudell, 363 F.3d 1072, 1074 (10th Cir. 2004)

(internal citation and quotations omitted). Where a motion to dismiss is based on a facial

attack, as here, courts “apply the same standards under Rule 12(b)(1) that are applicable to

a Rule 12(b)(6) motion to dismiss for failure to state a cause of action.” Muscogee (Creek)

Nation v. Okla. Tax Comm'n, 611 F.3d 1222, 1227 n.1 (10th Cir. 2010).

To survive a motion to dismiss under Fed. R. Civ. P. 12(b)(6), “a complaint must

contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible

on its face.’ 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.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic

Corp. v. Twombly, 550 U.S. 544, 555-557, 570 (2007)). Detailed factual allegations are

not required, but the statement of the claim under Rule 8(a)(2) must be “more than an

unadorned, the-defendant-unlawfully-harmed-me accusation.” Iqbal, 556 U.S. at 678

(citing Twombly, 550 U.S. at 555 (2007)); see generally Fed. R. Civ. P. 8(a)(2) (complaint

must contain “a short and plain statement of the claim showing that the pleader is entitled

to relief[.]”).

“While the 12(b)(6) standard does not require that Plaintiff establish a prima facie

case in her complaint, the elements of each alleged cause of action help to determine

whether Plaintiff has set forth a plausible claim.” Khalik v. United Air Lines, 671 F.3d

1188, 1192 (10th Cir. 2012). Thus, the appropriate inquiry is “‘whether the complaint

sufficiently alleges facts supporting all the elements necessary to establish an entitlement

to relief under the legal theory proposed.’” Lane v. Simon, 495 F.3d 1182, 1186 (10th Cir.

2007) (quoting Forest Guardians v. Forsgren, 478 F.3d 1149, 1160 (10th Cir. 2007)). “A

pleading that offers labels and conclusions or a formulaic recitation of the elements of a

cause of action will not do. Nor does a complaint suffice if it tenders naked assertion[s]

devoid of further factual enhancement[.]” Iqbal, 556 U.S. at 678.

II. Zumwalt’s Motion

A. Eleventh Amendment Immunity

Zumwalt first moves to dismiss the Amended Complaint’s claims against her in her

official capacity pursuant to Fed. R. Civ. P. 12(b)(1) because she is immune from suit under

the Eleventh Amendment of the United States Constitution. Zumwalt argues she must be

dismissed in her official capacity because “Eleventh Amendment sovereign immunity bars

suits for money damages against state, state agencies, and state officers in their official

capacities.” Chilcoat v. San Juan County, 41 F.4th 1196, 1213 (10th Cir. 2022). Zumwalt

argues Oklahoma has expressly not waived its Eleventh Amendment immunity or

otherwise consented to a lawsuit such as the present case against her.

The Eleventh Amendment states: “[t]he Judicial power of the United States shall

not be construed to extend to any suit in law or equity, commenced or prosecuted against

one of the United States by Citizens of another State, or by Citizens or Subjects of any

Foreign State.” This Amendment creates an immunity that “accord[s] states the respect

owed them as joint sovereigns,” “applies to any action brought against a state in federal

court, including suits initiated by a state's own citizens,” and “applies regardless of whether

a plaintiff seeks declaratory or injunctive relief, or money damages.” Steadfast Ins. Co. v.

Agricultural Ins. Co., 507 F.3d 1250, 1252 (10th Cir. 2007). “The ultimate guarantee of

the Eleventh Amendment is that nonconsenting States may not be sued by private

individuals in federal court.” Bd. of Trustees of Univ. of Ala. v. Garrett, 531 U.S. 356, 363

(2001). “‘The Eleventh Amendment is a jurisdictional bar that precludes unconsented suits

in federal court against a state and arms of the state.’” Peterson v. Martinez, 707 F.3d

1197, 1205 (10th Cir. 2013) (quoting Wagoner County Rural Water Dist. No. 2 v. Grand

River Dam Authority, 577 F.3d 1255, 1258 (10th Cir. 2009)).

In response to Zumwalt’s Motion, Plaintiff asserts: 1) federal courts can enjoin state

officials from violating federal law pursuant to Ex parte Young, 209 U.S. 123 (1908);

Congress can and did abrogate state immunity to include bankruptcy cases; and Eleventh

Amendment immunity is waived when a state removes a case to federal court. Whatever

the merits of Plaintiff’s various arguments in the abstract, none apply to the present action

because she is seeking money damages not injunctive relief, a bankruptcy is not involved

and Zumwalt did not remove this case because Plaintiff filed it in federal court. Thus,

Zumwalt is immune from suit in her official capacity under the Eleventh Amendment.5

5 Although a state can waive its Eleventh Amendment immunity by entering into private contracts,

see, e.g., State Bd. of Public Affairs v. Principal Funding Corp., 1975 OK 144, ¶ 11, 542 P.2d 503,

506 (“[W]here a person or entity enters into a valid contract with the proper State officials and a

valid appropriation has been made therefor, the State has consented to being sued and waived its

governmental immunity to the extent of its contractual obligations and such contractual obligations

may be enforced against the State in an ordinary action at law.”), Plaintiff does not seek to enforce

the Lease through a breach of contract action against Zumwalt.

B. Tortious Interference with Contract

Zumwalt moves to dismiss the tortious interference with contract claim against her

because Plaintiff fails to state a claim for such tort. First, Zumwalt argues she is immune

from liability under the Governmental Tort Claims Act (“GTCA”) in her official capacity

because ODTR and its employees can be liable for torts under the GTCA only for torts of

employees acting within the scope of their employment. Zumwalt argues that because

tortious interference with contract necessarily requires a showing of bad faith, such bad

faith actions cannot be committed within the scope of her ODTR employment. Zumwalt

also argues that Plaintiff failed to allege any non-conclusory allegation regarding any

specific bad faith action she took to interfere with the Lease.

Plaintiff responds that she states a claim for tortious interference with contact,

noting that on or about April 20, 2023, her attorney responded to Zumwalt’s ODTR

Termination Letter by specifically detailing how the deficiencies previously identified had

been corrected or disputing some of the deficiencies. See Docket No. 22, Ex. A. Plaintiff,

acknowledging that Zumwalt cannot be held liable if she was acting within the scope of

her ODTR employment, argues that scope of employment is a jury question.

Plaintiff’s counsel’s April 20, 2023 letter was attached to her Response but was not

attached to or even referenced in the Amended Complaint. A court generally may not

consider evidence extraneous to the complaint when ruling on a Rule 12(b)(6) motion to

dismiss without converting the motion to one for summary judgment. David v. City & Cty.

of Denver, 101 F.3d 1344, 1352 (10th Cir. 1996). Notwithstanding this rule, “the district

court may consider documents referred to in the complaint if the documents are central to

the plaintiff’s claim and the parties do not dispute the documents’ authenticity.” Jacobsen

v. Deseret Book Co., 287 F.3d 936, 941 (10th Cir. 2002) (emphasis added). At most, the

Amended Complaint alleges Plaintiff “asserts she has corrected deficiencies noted in

inspections of the premises” but does not mention she notified ODTR of such corrections

through her attorney or otherwise reference the April 20, 2023 letter. See Docket No. 14,

¶ 19. As such, the undersigned Magistrate Judge declines to convert the motion into a

motion for summary judgment and the April 14, 2023 letter will not be considered in

deciding Zumwalt’s Motion to Dismiss.

Whether or not the April 14, 2023 letter is considered, for the reasons set forth

below, Plaintiff fails to adequately plead a tortious interference claim against Zumwalt.

First, to the extent Zumwalt acted within the scope of her employment as Executive

Director of ODTR, she is immune from liability under the GTCA.6 See, e.g., Tuffy’s, Inc.

v. City of Oklahoma City, 2009 OK 4, ¶ 8, 212 P.3d 1158, 1163 (“An employee of a political

subdivision is relieved from private liability for tortious conduct committed within the

scope of employment.”). Plaintiff concedes this point in her Response.7 See Docket No.

22, p. 5. Zumwalt cannot be liable in her official capacity because a “claim for tortious

6 As noted above, Zumwalt is also immune from suit in her official capacity under the Eleventh

Amendment.

7 Moreover, such a tort cannot be asserted against Zumwalt in her official capacity because under

Oklahoma law “[a] cause of action for wrongful interference with contract can arise only when

one who is not a party to a contract interferes with that contract by convincing one of the

contracting parties to breach its terms.” Batton v. Mashburn, 107 F.Supp.3d 1191, 1198 (W.D.

Okla. 2015) (quoting Ray v. Am. Nat’l Bank & Trust Co. of Sapulpa, 894 P.2d 1056, 1060

(Okla.1994)). “A defendant who was a party to the contract, in his representative capacity, cannot

be held liable on such a claim.” Id. (citing Ray, 894 P.2d at 1060)); see also Voiles v. Santa Fe

Minerals, Inc., 911 P.2d 1205, 1210 (Okla. 1996) (“Hugoton cannot be liable for wrongfully

interfering with a contract if it was acting in a representative capacity for a party to that contract.”).

interference with a business relationship because [it] requires a showing of bad faith and

thus cannot be committed within the scope of employment by an employee of a political

subdivision.” Id. at 1166.

Second, Plaintiff does not allege any fact that Zumwalt plausibly acted outside her

role as Executive Director or with the requisite malicious intent to support a tortious

interference claim against Zumwalt in her individual capacity. A tortious interference with

contract requires: “1) interference with a business or contractual right; 2) malicious and

wrongful interference that is neither justified, privileged, nor excusable; and 3) damage

proximately sustained as a result of the interference.” Tuffy’s, 2009 OK 4 at ¶ 14, 121 P.3d

at 1165. Plaintiff alleges that ODTR sent the Termination Letter, which Zumwalt signed

as Executive Director. See Docket No. 14, ¶ 16 & Docket No. 22, Ex. 3.8 Plaintiff does

not allege any specific action Zumwalt took after sending the Termination Letter. Instead,

assuming Zumwalt is one of the “both Defendants” referenced in the Amended Complaint,

Plaintiff merely alleges that Zumwalt refused to acknowledge there were no deficiencies

on the leased premises, claimed Plaintiff “was in breach of the lease agreement” and, by

terminating the Lease, deprived Plaintiff of the right to operate her business under the

Lease. See Docket No. 14, ¶ 23. In essence, Plaintiff simply alleges there is a dispute over

whether the identified deficiencies were corrected and whether ODTR’s termination of the

Lease constituted a breach of the Lease. “‘Scope of employment’ is defined as

performance by an employee acting in good faith within the duties of his office or

8 Plaintiff attached an incomplete copy of the Termination Letter to the Amended Complaint, see

Docket No. 14, Ex. 2, but a complete version was attached to Zumwalt’s Motion.

employment or of tasks lawfully assigned by a competent authority. Except in cases where

only one reasonable conclusion can be drawn, the question of whether an employee has

acted within the scope of employment at any given time is a question for the trier of fact.”

Tuffy’s, 2009 OK 4 at ¶ 8, 121 P.3d at 1163. Plaintiff only sets forth the conclusory

allegation that “Defendants” acted maliciously and wrongfully. Such a conclusory and

formulaic recitation of the elements of a cause of action is insufficient to state a claim that

Zumwalt acted outside the scope of her ODTC employment or in bad faith. The vaguely

alleged actions by Zumwalt all fall squarely within her duties as ODTR Executive Director.

The only reasonable conclusion that can be drawn from the Amended Complaint is that

Zumwalt, as ODTR Executive Director, communicated to Plaintiff that the Lease was

being terminated because Plaintiff had not cured all the identified deficiencies. The fact

that Plaintiff disagreed with Zumwalt’s conclusion does not, without alleging more,

suggest Zumwalt was acting maliciously or outside the scope of her employment. Thus,

the Amended Complaint fails to state a tortious interference claim against Zumwalt in her

official or individual capacity.

C. 42 U.S.C. § 1983 Due Process

Zumwalt moves to dismiss Plaintiff’s due process claim because she does not allege

any personal involvement of Zumwalt in any constitutional violation. Specifically,

Zumwalt argues Plaintiff fails to specifically allege she took part in any constitutional

violation and whether any of Plaintiff’s property was taken. In response, Plaintiff argues

Zumwalt spearheaded the violation by signing the Termination Letter, took no action in

response to her attorney’s letter arguing the deficiencies had been corrected, and was the

final decision maker of the ODTR.

Although the Amended Petition alleges a claim for a violation of Plaintiff’s due

process rights, it does not specifically identify the type of right she claims was violated or

the specific source of that right. The Due Process Clause of the Fourteenth Amendment is

the source of different types of constitutional protection. First, it provides for procedural

due process, a guarantee of fair procedure in connection with any deprivation of life,

liberty, or property by a state. Daniels v. Williams, 474 U.S. 327, 337 (1986). The Due

Process Clause also contains a substantive component that incorporates the specific

protections of most of the Bill of Rights against the states. Id. The Amended Complaint

is silent on the type of due process violation, alleging only that ODTR’s termination of the

Lease and deeming her property to be abandoned constituted a reverse or inverse

condemnation, which amounted to a taking of her property without just compensation. See

Docket No. 14, ¶ 31. Plaintiff’s Response refers to both procedural and substantive due

process rights although she focuses on substantive due process rights. See Docket No. 22,

pp. 7-8.

1. Procedural Due Process

“Procedural due process imposes constraints on governmental decisions which

deprive individuals of liberty or property interests within the meaning of the Due Process

Clause of the . . . Fourteenth Amendment.” Mathews v. Eldridge, 424 U.S. 319, 332 (1976)

(quotations omitted). “The Fourteenth Amendment’s procedural protection of property is

a safeguard of the security of interests that a person has already acquired in specific

benefits.” Bd. of Regents of State Colls. v. Roth, 408 U.S. 564, 576 (1972).

A procedural due process property claim involves a two-step assessment: “(1) did

the individual possess a protected interest such that the due process protections were

applicable; and, if so, then (2) was the individual afforded an appropriate level of process.”

Brown v. Montoya, 662 F.3d 1152, 1167 (10th Cir. 2011) (quotations omitted). “[I]t is

only after the plaintiff first demonstrates the existence and deprivation of a protected

property interest that the plaintiff is constitutionally entitled to an appropriate level of

process.” Teigen v. Renfrow, 511 F.3d 1072, 1078 (10th Cir. 2007).

In the procedural due process context, “[p]roperty interests . . . are not created by

the Constitution [but][r]ather . . . by existing rules or understandings that stem from an

independent source such as state law.” Roth, 408 U.S. at 577. “Thus, constitutionally

protected property interests are created and defined by statute, ordinance, contract, implied

contract and rules and understandings developed by state officials.” Kirkland v. St. Vrain

Valley Sch. Dist. No. Re–1J, 464 F.3d 1182, 1190 (10th Cir. 2006). “Valid contracts may

constitute a property interest for purposes of due process.” Southern Disposal, Inc. v. Texas

Waste Mgmt., 161 F.3d 1259, 1265 (10th Cir. 1998). A possessory interest in property that

arises from a contract, such as a lease, has been held “sufficient to invoke the protection of

the Due Process Clause.” Brecheen v. Lofaro, 559 Fed. Appx. 723, 730 (10th Cir. 2014)

(quoting Fuentes v. Shevin, 407 U.S. 67, 87 (1972).

While those with whom the government contracts might have some procedural due

process rights, outside the employment context it appears that if such rights exist, they are

generally limited and are usually satisfied by state-law remedies. See Masso-Torrellas v.

Municipality of Toa Alta, 845 F.3d 461, 467 (1st Cir. 2017) (“A simple breach of contract

does not amount to an unconstitutional deprivation of property. To hold otherwise would

run the risk of transmogrifying virtually every dispute involving an alleged breach of

contract by a state or a state agency into a constitutional case.”) (cleaned up); Ramsey v.

Board of Education of Whitley County, Ky., 844 F.2d 1268, 1273 (6th Cir. 1988) (“A state

breach of contract action is most clearly an adequate remedy for a property deprivation

when the only basis for federal jurisdiction is that a state actor is one of the contracting

parties.”); San Bernardino Physicians’ Services Medical Group, Inc. v. San Bernardino

County, 825 F.2d 1404, 1409–10 (9th Cir. 1987) (“Yet the farther the purely contractual

claim is from an interest as central to the individual as employment, the more difficult it is

to extend it constitutional protection without subsuming the entire state law of public

contracts.”).

Indeed, the Supreme Court held that when “[a] simple breach of contract is . . .

alleged[,] . . . [t]he breach of a contract is neither a confiscation of property nor a taking of

property without due process of law.” Shawnee Sewerage & Drainage Co. v. Stearns, 220

U.S. 462 (1911). More recently, in Lujan v. G & G Fire Sprinklers, Inc., 532 U.S. 189,

197 (2001), the Supreme Court reaffirmed this holding. In Lujan, the State of California

withheld payment from a public works subcontractor, and the subcontractor sued the state

under § 1983. Id. at 196–97. The Supreme Court characterized the subcontractor's interest

as merely a contractual interest—“deprivation of payment that it contends it is owed under

a contract”—and held that this interest did not give rise to a § 1983 claim, as it could be

adequately protected through a breach of contract suit. Id. at 196.

The undersigned Magistrate Judge concludes that the Amended Complaint fails to

satisfy the first prong of the procedural due process analysis by finding that it does not

plausibly alleged that Plaintiff possessed a protected interest such that the due process

protections are applicable or the deprivation of such a property interest. On its face, the

Amended Complaint at most alleges a disagreement over whether Plaintiff was in violation

of the Lease sufficient to give ODTR grounds to terminate the Lease or to define ODTR’s

rights if Plaintiff breaches the Lease. This appears to be in essence a breach of contract

claim.9

Moreover, the Amended Complaint does not actually allege what specific actions

Zumwalt took that deprived Plaintiff of any due process or what process was required to

be afforded her. Although there are three named Defendants, the Amended Complaint

alleges only collectively that “both Defendants effectually took said property from

plaintiffs by intentionally refusing to acknowledge that she was not in violation of the lease

agreement[]” and “[t]hat said actions by the Defendants amount to a deprivation of the

Plaintiff of her due process rights, a violation of her civil rights.” See Docket No. 14, ¶¶

9 Ramsey acknowledges that a state breach of contract action may not provide an adequate remedy

for a deprivation of some kinds of property. 844 F.2d at 1273. Due process may then require

some kind of a predeprivation procedure. Id. As a result, “not all parties can be made whole

through a breach of contract action.” Baird v. Bd. of Educ. for Warren Community Unit, 389 F.3d

685, 691 (7th Cir. 2004). The issue turns on whether Plaintiff “was denied a right by virtue of

which [s]he was presently entitled either to exercise ownership dominion over real or personal

property, or to pursue a gainful occupation.” Id. (quoting Lujan, 532 U.S. at 196). The Amended

Complaint does not allege facts sufficient to plausibly state such a claim.

28 & 32 (emphasis added). Federal Rule of Civil Procedure 8(a) requires Plaintiff to state

her claims “intelligibly” to give fair notice of the claims to opposing parties and the Court.

Mann v. Boatright, 477 F.3d 1140, 1148 (10th Cir. 2007). Lastly, it is not even clearly

alleged in the Amended Complaint that ODTR, much less Zumwalt personally, took any

of Plaintiff’s property. “[I]ndividual liability under § 1983 must be based on personal

involvement in the alleged constitutional violation.” Foot v. Spiegel, 118 F.3d 1416, 1423

(10th Cir. 1997) (citing Grimsley v. MacKay, 93 F.3d 6767, 679 (10th Cir. 1996). As such,

the Amended Complaint fails to state a claim for a procedural due process violation § 1983.

2. Substantive Due Process

“Substantive due process arises from the Fourteenth Amendment's protections

against governmental deprivations ‘without due process of law.’” Williams v. Berney, 519

F.3d 1216, 1220 (10th Cir. 2008) (quoting U.S. Const. amend. XIV, § 1). Where executive

action—as opposed to legislative action—is challenged, as it is here, a substantive due

process violation occurs where “government action deprives a person of life, liberty, or

property in a manner so arbitrary it shocks the judicial conscience.” Cnty. of Sacramento

v. Lewis, 523 U.S. 833, 846 (1998); accord Doe v. Woodard, 912 F.3d 1278, 1300 (10th

Cir. 2019); Rollins v. Oklahoma ex rel. Norman Veterans Ctr., 2013 WL 3992393, at *5

(W.D. Okla. Aug. 2, 2013) (“The due process clause of the Fourteenth Amendment

prohibits executive abuse of power which shocks the conscience”). To state a claim for an

executive violation of substantive due process rights, Plaintiff must allege both a (1)

deprivation of property and (2) executive action that shocks the conscience. Lindsey v.

Hyler, 918 F.3d 1109, 1115 (10th Cir. 2019); Moore v. Guthrie, 438 F.3d 1036, 1040 (10th

Cir. 2006). Executive action that shocks the conscience requires far more than negligence.

Moore, 438 F.3d at 1040. “Even the actions of a reckless official or one bent on injuring a

person do not necessarily shock the conscience.” Id.

The undersigned Magistrate Judge concludes that the Amended Complaint does not

sufficiently allege a violation of Plaintiff’s substantive due process rights. Again, the

Amended Complaint fails to expressly allege that ODTR took Plaintiff’s property.

Moreover, there are no allegations of conduct by any one of the three Defendants, much

less Zumwalt, that shocks the judicial conscience. Plaintiff essentially alleges a

disagreement over whether she remedied the identified deficiencies. As noted above, even

if Zumwalt acted recklessly or bent on injuring Plaintiff, such allegations are insufficient.

Id. Therefore, the Amended Complaint does not plausibly state a substantive due process

claim.

D. Qualified Immunity

In addition to alleging failure to state a claim, Zumwalt contends she is entitled to

qualified immunity. Qualified immunity “protects government officials ‘from liability for

civil damages insofar as their conduct does not violate clearly established statutory or

constitutional rights of which a reasonable person would have known.’” Pearson v.

Callahan, 555 U.S. 223, 231 (2009) (quoting Harlow v. Fitzgerald, 457 U.S. 800, 818

(1982)). Specifically, it is “an immunity from suit rather than a mere defense to liability.”

Mitchell v. Forsyth, 472 U.S. 511, 526 (1985). While Twombly “rejects a heightened

pleading standard[,]” Robbins v. Okla., 519 F.3d 1242, 1249 (10th Cir. 2008), “‘[t]he

Twombly standard may have greater bite in [the context of civil rights cases against a

government official where the defendant generally sought dismissal on qualified immunity

grounds], appropriately reflecting the special interest in resolving the affirmative defense

of qualified immunity at the earliest possible stage of a litigation.’” Acosta v. Jani-King of

Okla., Inc., 905 F.3d 1156, 1160 (10th Cir. 2018) (quoting Robbins, 519 F.3d at 1249).

“Iqbal reinforced our earlier statement that in a § 1983 action it is particularly important

that the complaint make clear exactly who is alleged to have done what to whom, to provide

each individual with fair notice as to the basis of the claims against him or her, as

distinguished from collective allegations against the state.” Brown v. Montoya, 662 F.3d

1152, 1163 (10th Cir. 2011) (quotations omitted).

Thus, to make out a viable claim and to overcome the assertion of qualified

immunity, Plaintiff must show that “(1) defendant violated [her] constitutional rights; and

(2) the law was clearly established at the time of the alleged violation.” Soza v. Demsich,

62 F4th 1248, 1253 (10th Cir. 2023); see also Hemry v. Ross, 62 F.4th 1248, 1253 (10th

Cir. 2023) (same); Pahls v. Thomas, 718 F.3d 1210, 1227 (10th Cir. 2013) (same). “When

qualified immunity is asserted in the context of a motion to dismiss, the factual allegations

of the complaint are assumed to be true, and the court’s analysis generally aligns with the

analysis applied with determining the sufficiency of a claim.” Harper v. Woodward Cnty.

Bd. Of Cnty. Commrs, 2014 WL 7399367, *8 (W.D. Okla. Dec. 29, 2014) (citing Brown,

662 F.3d at 1162-1164 and Iqbal, 556 U.S. at 666, 673-675, 677-684). This means that,

even at the dismissal stage, Plaintiff bears the burden of showing she has alleged a

constitutional violation that was clearly established. See Bledsoe, 53 F.4th at 617 n.25

(“Appellants are correct that once they asserted qualified immunity in the district court,

which they did here, it was Bledsoe’s burden to show both that he had alleged a

constitutional violation and that that violation was clearly established.”) (citing Cox v.

Glanz, 800 F.3d 1231, 1245 (10th Cir. 2015)). When conducting its analysis, the court has

discretion in deciding which component to address first. Pearson, 555 U.S. at 236. “If the

plaintiff fails to satisfy either part of this two-part inquiry, the court must grant the

defendant qualified immunity.” Hesse v. Town of Jackson, Wyo., 541 F.3d 1240, 1244

(10th Cir.2008) (quotations omitted).

The undersigned Magistrate Judge concludes that Zumwalt is entitled to qualified

immunity in her individual capacity. As noted above, the Amended Complaint fails to state

a claim for a violation of either Plaintiff’s procedural or substantive due process rights

pursuant to 42 U.S.C. § 1983. Therefore, Plaintiff has not met her burden of showing that

Zumwalt violated her constitutional rights and it is not necessary to address the clearly

established prong. See Hesse, 541 F.3d at 1244 (“[i]f the court concludes no constitutional

right has been violated, no further inquiry is necessary and the defendant is entitled to

qualified immunity.” (quotations omitted)).

E. USA Dock, Inc. Standing

Zumwalt argues USA Dock, Inc. lacks standing to sue because it has been

suspended by the Oklahoma Tax Commission. See Docket No. 20, Ex. 2 & Ex. 3. In

response, Plaintiff argues that she, as the agent of USA Dock, has standing to sue and that

USA Docket’s suspension only restricts its ability to sue or be sued in state courts. See

Docket No. 22, p. 6.

Although Zumwalt’s Reply brief seems to suggest she seeks to dismiss Ms. Shotwell

as well as USA Dock for lack of standing, the undersigned Magistrate Judge does not

interpret Zumwalt’s Motion so broadly. Zumwalt’s Motion’s argument as to lack of

standing is only directed at USA Dock. See Docket No. 20, pp. 9-10.

Under Rule 17(b) of the Federal Rules of Civil Procedure, a corporation’s capacity

to sue or be sued shall be determined by the law under which it was organized. “Title 68,

section 1212 of the Oklahoma Statutes sets forth the procedures for suspending a

corporation for failure to comply with the tax code, i.e., failure to file and pay its corporate

taxes.” In re Genentech, Inc., 2023 WL 11921038, at *1 (N.D. Okla. Oct. 11, 2023)

(quoting Moncrieff-Yeates v. Kane, 323 P.3d 215, 218 (Okla. 2013)). “Where ‘one is

barred from recovery in the state court, he should likewise be barred in the federal court.’”

Flour Mills of America, Inc. v. Pace, 75 F.R.D. 676, 678 (E.D. Okla. 1977) (quoting Woods

v. Interstate Realty Co., 337 U.S. 535 (1949)).

Plaintiff alleges that USA Dock is an Oklahoma corporation. See Docket No. 14, ¶

1. Zumwalt sets out that USA Dock, as the successor to Zatar Corporation, is suspended

by the Oklahoma Tax Commission. See Docket No. 20, Ex. 2 & Ex. 3.10 Plaintiff does

not challenge this fact. In this matter, Plaintiff named USA Dock only as a doing business

10“[F]acts subject to judicial notice may be considered in a Rule 12(b)(6) motion without

converting the motion to dismiss into a motion for summary judgment. This allows the court to

take judicial notice of its own files and records, as well as facts which are a matter of public

record.” Tal v. Hogan, 453 F.3d 1244, 1264 n.24 (10th Cir. 2006) (quotations omitted). A fact

subject to judicial notice is one that is “not subject to reasonable dispute because it: (1) is generally

known within the trial court's territorial jurisdiction; or (2) can be accurately and readily

determined from sources whose accuracy cannot reasonably be questioned.” Fed. R. Evid. 201.

as entity of herself. Therefore, there is no manifest injustice in granting Zumwalt’s motion

against USA Dock for lack of standing as Plaintiff can pursue this case individually.

Therefore, USA Dock is dismissed for lack of standing due to its suspension by the

Oklahoma Tax Commission.

III. Leave to Amend

Finally, although Zumwalt fails to comply with LCvR 7.1(o), the undersigned

Magistrate Judge finds that Plaintiff should be given leave to further amend her Amended

Complaint with respect to only her claim for violation of her due process rights under 42

U.S.C. § 1983. Federal Rule of Civil Procedure 15(a)(2) provides, in pertinent part, that

“a party may amend its pleading only with the opposing party's written consent or the

court's leave. The court should freely give leave when justice so requires.” Fed. R. Civ.

P. 15(a)(2). Whether to grant leave to amend is within the trial court's discretion. Woolsey

v. Marion Labs., Inc., 934 F.2d 1452, 1462 (10th Cir. 1991). “Refusing leave to amend is

generally only justified upon a showing of undue delay, undue prejudice to the opposing

party, bad faith or dilatory motive, failure to cure deficiencies by amendments previously

allowed, or futility of amendment.” Frank v. U.S. West, Inc., 3 F.3d 1357, 1365 (10th Cir.

1993). “A proposed amendment is futile if the complaint, as amended, would be subject

to dismissal.” Anderson v. Merrill Lynch Pierce Fenner & Smith, Inc., 521 F.3d 1278,

1288 (10th Cir. 2008) (internal quotations omitted).

Although Plaintiff amended her complaint once, she only added an additional

defendant and did not address any issue raised in Zumwalt’s Motion to Dismiss and it is

not apparent such amendment would be futile. Therefore, Plaintiff is granted leave to

amend her Amended Complaint as it relates to her due process claim consistent with this

report and recommendation. Moreover, Plaintiff is cautioned that in any subsequent

amendment she must be mindful of her pleading obligations under Fed. R. Civ. P. 8(a) and

the other issues addressed in this report and recommendation.

CONCLUSION

Accordingly, the undersigned Magistrate Judge hereby RECOMMENDS that

Defendant Shelley Zumwalt’s Motion to Dismiss and Brief in Support [Docket No. 20] be

GRANTED WITHOUT PREJUDICE. It is further RECOMMENDED that Plaintiff be

granted leave to amend her Amended Complaint with respect to her due process claim and

such amendment shall be filed not later than 14 days after the adoption of this Report and

Recommendation and attach a redline copy showing all changed from the Amended

Complaint. Any objection to this Report and Recommendation must be filed within 14

days. See 18 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b). Any objection and response shall

each be limited to 10 pages and a reply is permitted only with leave of Court upon a

showing of good cause.

DATED this 15th day of July, 2025.

_____________________________________

GERALD L. JACKSON

UNITED STATES MAGISTRATE JUDGE