The opinion
Case: 10-10427 Document: 00511350197 Page: 1 Date Filed: 01/13/2011
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
January 13, 2011
No. 10-10427 Lyle W. Cayce
Clerk
PHILLIP WAINSCOTT,
Plaintiff-Appellant
v.
DALLAS COUNTY, TEXAS; JOHN WILEY PRICE; DALLAS COUNTY BAIL
BOND BOARD,
Defendants-Appellees
Appeal from the United States District Court
for the Northern District of Texas
No. 3:09–CV–1844–6
Before KING, STEWART, and OWEN, Circuit Judges.
PER CURIAM:*
INTRODUCTION
Plaintiff-Appellant Phillip Wainscott (“Wainscott”) appeals the district
court’s grant of a motion to dismiss in favor of Defendants-Appellees Dallas
County, Texas, John Wiley Price, and the Dallas County Bail Bond Board
(“Board”) on his complaint alleging violations of his due process rights under the
*
Pursuant to 5TH CIR . R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .
R. 47.5.4.
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United States Constitution and the Texas Constitution. We REVERSE in part
and AFFIRM in part and REMAND.
I.
Since 1995, Wainscott has been a licensed attorney in Texas, practicing
mostly criminal law. As an attorney, he is permitted by the Board to execute
bail bonds without holding a license to do so, under certain restrictions. In
September 2006, Wainscott ran afoul of the Board’s restrictions for improper
advertising and his license to write bonds was suspended. He appealed this
decision in state court, which granted the Board’s motion to dismiss. In January
2007, his license was reinstated upon the expiration of the advertisements, as
at that point the Board considered the violations remedied.
In April 2007, Wainscott was suspended for improper advertising yet
again.1 The violations giving rise to this second suspension were not renewed
by Wainscott upon their expiration. After he requested that the Board lift the
suspension, and the Board’s repeated refusal to do so, Wainscott then filed suit
in the Northern District of Texas, alleging a violation of his due process rights
under the United States Constitution and the Texas Constitution. Wainscott
alleged his hearings before the Board were unfair and did not comport with due
process. He sought damages and injunctive relief. Defendants filed a motion to
dismiss, pursuant to F ED. R. C IV. P. 12(b)(2), (4), (5), and (6) on grounds of
improper parties, res judicata or claim preclusion, sovereign immunity, qualified
immunity, and insufficient service of process. The district court granted the
1
Wainscott was suspended for improper print and electronic advertising. His improper
print advertising constituted advertising in the Dallas County Yellow Pages as “Aaron Bail
Bonds” or “A Aaron Bail Bonds,” a bail bond company, which appears to be non-existent and
nonetheless, is not licensed to issue bail bonds in Dallas County. He was linked to these
advertisements through his name and telephone number, which were listed on the
advertisements. He also issued improper internet advertisements. He avers he notified the
Board on March 14, 2008 that he had remedied the offending internet advertisements. He
claims that despite this remedy, the Board maintained the suspension of his license.
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motion on improper parties, res judicata, and insufficient service of process.2
Wainscott’s case was dismissed, and he timely appealed.
II.
This court reviews de novo a district court’s grant of a motion to dismiss
under Rule 12(b)(6). Ballard v. Wall, 413 F.3d 510, 514 (5th Cir. 2005). To avoid
dismissal for failure to state a claim, a plaintiff ’s complaint must plead enough
facts to “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal,
129 S. Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544,
570 (2007)). The factual allegations must “raise a right to relief above the
speculative level.” Twombly, 550 U.S. at 555. “[C]onclusory allegations or legal
conclusions masquerading as factual conclusions will not suffice to prevent a
motion to dismiss.” Taylor v. Books A Million, Inc., 296 F.3d 376, 378 (5th Cir.
2002).
A. Service of Process
The district court dismissed Wainscott’s suit against the Board on the
basis that service was improper and insufficient as a matter of law because
Wainscott failed to serve the Board’s presiding officer. The Federal Rules of
Civil Procedure provide that if a defendant is not served within 120 days from
the date the complaint was filed, the court must dismiss the action without
prejudice or order that service be made within a certain time. F ED. R. C IV.
P. 4(m). The record reflects that Wainscott filed suit on September 30, 2009.
Therefore, the period for effecting service upon the proper party ended on
January 28, 2010. On January 20, 2010, the attorney for the Board notified
Wainscott that Darryl Thomas was its presiding officer. Wainscott argues that
2
The Northern District of Texas did not reach the merits of Wainscott’s argument that
his federal and state substantive and procedural due process rights were violated. Moreover,
the district court did not discuss—much less mention—Defendants’ sovereign immunity and
qualified immunity defenses. We, too, decline to reach the merits of these arguments with the
understanding that the district court may consider these issues on remand.
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the district court failed to consider the fact that Wainscott served Thomas, whom
Wainscott contends is the Board’s Presiding Officer, within the 120-day time
limit for service of process, prescribed by Rule 4(m). The record appears to
support Wainscott’s contention that he served Thomas on January 27, 2010,
within the time limit for service of process. For its part, the Board has not
argued that service was either untimely or ineffective to perfect service on the
Board. Because our standard of review requires that the facts be viewed in the
light most favorable to Wainscott, and any doubts resolved in his favor, Lowrey
v. Texas A&M University Systems, 117 F.3d 242, 247 (5th Cir. 1997), we believe
Wainscott has articulated grounds for relief on this issue.
B. Res Judicata
In this court, the test for res judicata (claim preclusion) has four elements:
“(1) the parties are identical or in privity; (2) the judgment in the prior action
was rendered by a court of competent jurisdiction; (3) the prior action was
concluded to a final judgment on the merits; and (4) the same claim or cause of
action was involved in both claims.” Southmark Corp. v. Coopers & Lybrand (In
re Southmark Corp.), 163 F.3d 925, 934 (5th Cir. 1999). To determine whether
the claims are the same, the court applies the transactional test, which considers
whether the claims turn on the same nucleus of operative facts. Id. (citations
and quotations omitted). The district court, in disposing of Wainscott’s
complaint, applied the In re Southmark Corp. framework. Here, because the
judgment in the prior action was rendered by a Texas state court—the District
Court of Dallas County, Texas—Texas law governs the application of res judicata
in this case. As such, we follow the transactional approach, which bars a
subsequent suit if it “arises out of the same subject matter of a previous suit and
which, through the exercise of diligence, could have been litigated in a prior
suit.” Getty Oil Co. v. Ins. Co. of N. Am., 845 S.W. 2d 794, 799 (Tex. 1992)
(internal citations and quotation marks omitted).
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Wainscott argues that the operative facts of the two cases are distinct from
one another such that a judgment of res judicata was improper. The 2006
suspension, he argues, was set to end upon expiration of the prohibited
advertisements, at which point the violations would be remedied. The
subsequent suspension, at the heart of the instant litigation, was indefinite. He
believes this overcomes res judicata because his attempts to have the suspension
lifted have proved unsuccessful. We find his argument persuasive.
As we follow the transactional approach to res judicata, we find that no
amount of due diligence could have facilitated Wainscott’s prosecution of his
alleged violations of due process arising from his second suspension when he
filed suit in Texas state court because the second suspension had not occurred
at the time of his first suit. Wainscott’s indefinite suspension was initially
imposed on April 12, 2007, several months after his state court action was
dismissed, on December 19, 2006. Despite the Board’s protests, this does not
trigger res judicata. See, e.g., Test Masters Educ. Servs., Inc. v. Singh, 428 F.3d
559, 572 (5th Cir. 2005) (res judicata did not apply where the operative facts
giving rise to the action had not occurred at the time of the earlier suit, although
both actions concerned the defendant’s infringement of plaintiff’s trademark).
Moreover, the facts at the heart of the separate lawsuits are distinctly
separate. His amended complaint in the state court action alleged that the
Board deprived him of a property interest in violation of his due process rights
when it suspended him for advertising as a bail bonds company, which, he
averred, explicitly authorized him to advertise as a surety on bail bonds. The
instant action, meanwhile, alleges that the Board acted arbitrarily and out of
bias against him in refusing to lift a second suspension after he had remedied
the specific violations for which he was suspended, even though he allegedly
committed no further actions. Without reaching the merits of his complaint, we
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believe this overcomes the res judicata bar to suit and that the district court
erred when it held otherwise.
C. Improper Parties
The district court dismissed Wainscott’s claim against Dallas County and
John Wiley Price on the basis that they were not proper parties to the action.
The district court held that only the Board had the power to suspend or revoke
Wainscott’s license to issue bail bonds. On appeal, Wainscott makes no mention
of his argument as it relates to the Dallas County. Thus, we construe Wainscott
to have abandoned it and only discuss the district court’s purported improper
parties error solely as it relates to Wainscott’s claims against Price in his official
and individual capacities. Wainscott avers that he properly stated a claim
against Price under 42 U.S.C. § 1983 and that the district court erred when it
held otherwise. According to Wainscott, Price intentionally disregarded the
Board’s rules and knowingly punished and harmed him by indefinitely
suspending him from writing bail bonds.
The applicable portion of the Texas Occupational Code explains that “if the
Board determines that a person has violated this subsection [of the code], the
Board may suspend or revoke the person’s authorization to post a bond under
this section or may bar the person from executing a bail bond or acting as a
surety under this section until the person has remedied the violation.” T EX. O CC.
C ODE A NN. § 1704.163(b). The cessation of an offending party’s authorization to
issue bail bonds under § 1704.163 can come in the form of a temporary
suspension or a revocation of his privileges. Id.
Wainscott argues that the advertisement that violated the Board’s
regulations expired on September 1, 2007 and any print violation was, thus,
remedied. He alleges that he notified the Board of having remedied the
electronic violations on March 14, 2008. He contends that despite his remedy of
the violations, he was nonetheless prevented from issuing bail bonds, and his
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suspension persisted. Wainscott also alleges that the Board, by and through
Price, acted arbitrarily and out of bias against him by employing terms such as
“extinguish” when referring to Wainscott. This continued suspension of his
license to issue bail bonds, he avers, amounted to a violation of his constitutional
rights under 42 U.S.C. § 1983.
To the extent that these allegations describe separate causes of action
against Price in his individual and official capacities under § 1983, they do not
form a basis for overturning the district court’s dismissal of those claims.
Wainscott has not alleged how Price caused his injury. Nowhere does Wainscott
establish that either Price or Dallas County had the authority to direct the
actions of the Board or a duty to supervise the Board, nor does he describe the
alleged “improper policies, customs and practices” that he attributes to Dallas
County in his pleadings. Furthermore, the only individual action that Price is
alleged to have taken against Wainscott is that Price, as a member of the Board,
was biased against him, and stated during a hearing that he wished to
“extinguish” Wainscott. Wainscott has not refuted the district court’s conclusion
that only the Board acting as a whole had the authority to suspend his ability
to write bail bonds, and therefore, that the Board is the only proper party to the
action. Thus, we affirm the district court’s dismissal of Wainscott’s claims
against Dallas County and Price on this basis, and remand only for consideration
of his claims against the Board.3
III.
For the reasons stated above, the judgment of the district court is
REVERSED in part, AFFIRMED in part, and we REMAND for further
proceedings not inconsistent with this opinion.
3
Our preference to exercise our discretion to remand and remain silent on the merits
applies with equal force to Dallas County’s argument before this court that this case presents
no procedural or substantive due process violations.
7