Stephen Stem v. Ruben Gomez

Case: 15-50264 Document: 00513372971 Page: 1 Date Filed: 02/08/2016

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

United States Court of Appeals

Fifth Circuit

No. 15-50264 FILED

February 8, 2016

STEPHEN C. STEM, Lyle W. Cayce

Clerk

Plaintiff - Appellant

v.

RUBEN GOMEZ; CITY OF HEARNE, TEXAS,

Defendants - Appellees

Appeal from the United States District Court

for the Western District of Texas

Before PRADO, SOUTHWICK, and GRAVES, Circuit Judges.

LESLIE H. SOUTHWICK, Circuit Judge:

City councilmembers in Hearne, Texas, terminated former police officer

Stephen Stem’s employment without notice or a hearing. Stem filed suit

alleging the councilmembers’ actions violated state law and denied him

constitutional due process. The district court dismissed the suit. We AFFIRM

in part and REVERSE and REMAND in part.

FACTS AND PROCEDURAL BACKGROUND

On May 6, 2014, Stephen Stem, a second-year officer at the Hearne

Police Department, was dispatched to Hearne resident Pearlie Golden’s home

on a 9-1-1 call. Roy Jones, Golden’s nephew, placed the emergency call. Jones

Case: 15-50264 Document: 00513372971 Page: 2 Date Filed: 02/08/2016

No. 15-50264

said Golden, who had recently failed a driver’s license renewal test, threatened

him with a gun after he had taken away her car keys. Stem alleged that when

he arrived at the home, Golden pointed the gun at him and refused to put it

down upon Stem’s direction. Stem said he then fired his weapon “in response

to the immediate and deadly threat.” Golden was wounded and later died.

Stem alleged that following the shooting there were “considerable

protests from residents of Hearne” and groups from outside Hearne. The

Hearne City Council posted a notice for a May 10 meeting, listing Stem’s

employment as an agenda item. The mayor and city attorney announced prior

to the meeting that they would recommend terminating Stem. At the May 10

meeting, councilmembers discharged Stem. Stem said he never received a

signed, written complaint from any city official prior to his dismissal.

In September 2014, a Texas grand jury failed to indict Stem on any

charges related to the incident. One month later, Stem filed this lawsuit

against the city of Hearne, Texas, and its mayor in his individual and official

capacities (collectively, the “defendants”). Stem alleged that Texas

Government Code Section 614.023 created a “constitutionally protected

property interest” in his employment as a police officer. Section 614.023

provides that where a “complaint” is filed against an officer covered by the

statute 1:

(a) A copy of a signed complaint . . . shall be given to the officer

. . . within a reasonable time after the complaint is filed.

(b) Disciplinary action may not be taken against the officer . . .

unless a copy of the signed complaint is given to the officer . . . .

(c) . . . [T]he officer . . . may not be indefinitely suspended or

terminated from employment based on the subject matter of the

1The parties do not contest that Stem was a “peace officer” under Texas Government

Code Chapter 614.

2

Case: 15-50264 Document: 00513372971 Page: 3 Date Filed: 02/08/2016

No. 15-50264

complaint unless:

(1) the complaint is investigated; and

(2) there is evidence to prove the allegation of misconduct.

Tex. Gov’t Code Ann. § 614.023.

Stem argues that the defendants’ “prejudg[ment]” of him and failure to

provide due process in connection with his termination deprived him of due

process under the Fourteenth Amendment. Stem brought suit for the

deprivation under 42 U.S.C. § 1983. Stem also sought a declaratory judgment

that the defendants violated his constitutional rights and state law by

terminating his employment without following the requirements of Section

614.023. The defendants moved to dismiss for lack of subject matter

jurisdiction and failure to state a claim. Stem opposed the motion and also

sought leave to amend any deficiencies in his complaint. In January 2015, the

district court denied leave to amend and dismissed for failure to state a claim

and for lack of jurisdiction. Stem timely appealed.

DISCUSSION

A district court decision to dismiss for failure to state a claim or for lack

of subject matter jurisdiction is reviewed de novo. Bowlby v. City of Aberdeen,

681 F.3d 215, 219 (5th Cir. 2012) (failure to state a claim); Ghanem v.

Upchurch, 481 F.3d 222, 223 (5th Cir. 2007) (lack of subject matter

jurisdiction). In analyzing the claims, all well-pleaded facts are accepted as

true and should be examined “in the light most favorable to the plaintiff.”

Bowlby, 681 F.3d at 219. Dismissal is appropriate if a complaint fails to plead

sufficient “facts to state a claim . . . that is plausible[, rather than merely

conceivable,] on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).

“A claim has facial plausibility when the . . . [complaint’s] factual content . . .

3

Case: 15-50264 Document: 00513372971 Page: 4 Date Filed: 02/08/2016

No. 15-50264

allows the court to draw the reasonable inference that the defendant is liable.”

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

Denial of a motion to amend is reviewed for abuse of discretion. Ackerson

v. Bean Dredging LLC, 589 F.3d 196, 208 (5th Cir. 2009).

I. Dismissal for Lack of Jurisdiction

The defendants argue that the district court lacked subject matter

jurisdiction. They contend that because Stem had no property interest in

continued employment, there was no jurisdiction to consider his Section 1983

claim. The argument blurs jurisdiction with the merits. If the challenge to

jurisdiction “is also a challenge to the existence of a federal cause of action,” a

district court should assume jurisdiction exists and “deal with the objection as

a direct attack on the merits of the plaintiff’s case.” Williamson v. Tucker, 645

F.2d 404, 415 (5th Cir. May 1981) (relying on Bell v. Hood, 327 U.S. 678, 682

(1946)). So long as a complaint is drafted “to seek recovery directly under the

Constitution or laws of the United States,” a “failure to state a proper cause of

action calls for a judgment on the merits and not for a dismissal for want of

jurisdiction.” Bell, 327 U.S. at 681–82. More recently, the Supreme Court

explained that “the nonexistence of a cause of action [is] no proper basis for a

jurisdictional dismissal.” Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83,

96 (1998). The only exceptions are where the claim was clearly made “for the

purpose of obtaining jurisdiction” or is “frivolous.” Bell, 327 U.S. at 682–83.

Stem stated a claim for relief under a federal statute. See 42 U.S.C.

§ 1983; 28 U.S.C. § 1331. It was not frivolous, and the Bell exceptions are

inapplicable. The district court erred in dismissing Stem’s claims for lack of

jurisdiction.

The court also dismissed for failure to state a claim. We turn to whether

that dismissal was valid.

4

Case: 15-50264 Document: 00513372971 Page: 5 Date Filed: 02/08/2016

No. 15-50264

II. Dismissal of Section 1983 Claim

To state a claim under Section 1983, a plaintiff must assert facts to

support that a person acting under color of state law denied the plaintiff a right

under the Constitution or federal law. Martin v. Thomas, 973 F.2d 449, 452–

53 (5th Cir. 1992). A “person” includes a local governing body if the action

claimed to be unconstitutional implemented a “decision officially adopted and

promulgated by that body’s officers.” Monell v. Dep’t of Soc. Serv., 436 U.S.

658, 690 (1978). When a government official is sued under Section 1983, the

plaintiff must allege that the official “was either personally involved in the

deprivation or that his wrongful actions were causally connected” to it. James

v. Tex. Collin Cnty., 535 F.3d 365, 373 (5th Cir. 2008).

Stem asserts that Section 614.023, particularly subsection (c) which

established a procedure for addressing complaints, provided him with a

constitutionally protected property interest in his job. He alleges that he was

unlawfully denied due process guaranteed to him under the Fourteenth

Amendment when the mayor recommended discharging him without notice or

a hearing and the Hearne City Council acted on that recommendation.

A property interest is more than “an abstract need,” a “desire,” or a

“unilateral expectation” to continued employment. Board of Regents v. Roth,

408 U.S. 564, 577 (1972). A claimant must show a “legitimate claim of

entitlement” to a procedure which is intended to protect an interest “acquired

in specific benefits,” in this case, a job. See id. at 576–77. A property interest

will exist in continued employment if the right to terminate without cause is

eliminated. See Bolton v. City of Dallas, 472 F.3d 261, 264 (5th Cir. 2006).

Conversely, an employee who is terminable at will generally has no

constitutionally-protected property interest. See Muncy v. City of Dallas, 335

F.3d 394, 398–99 (5th Cir. 2003).

A property interest is not derived from the Constitution but from an

5

Case: 15-50264 Document: 00513372971 Page: 6 Date Filed: 02/08/2016

No. 15-50264

independent source such as state law, a contract, or other “understandings.”

Evans v. City of Dallas, 861 F.2d 846, 848 (5th Cir. 1988). Therefore, a property

interest “cannot be defined by the procedures provided for its deprivation.”

Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 541 (1985). Though state

law is the source of the right, the question of whether a property interest is

created is answered by federal constitutional law. Town of Castle Rock v.

Gonzales, 545 U.S. 748, 756–57 (2005).

Stem argues that because his dismissal related to “complaints about his

use of force against Ms. Golden,” Section 614.023 provided him with a right to

continued employment unless the city could produce corroborating evidence

that proved the alleged misconduct. See Tex. Gov’t Code Ann. § 614.023(c). He

expanded that assertion at oral argument, contending that Section 614.023

sets a for-cause threshold for dismissal of an officer protected by the statute

whenever either a citizen complaint or a criticism from inside city government

“may lead to disciplinary action.”

For support, Stem cites a state appellate decision. See Turner v. Perry,

278 S.W.3d 806 (Tex. App.—Houston [14th Dist.] 2009, pet. denied). There, a

school district terminated a peace officer’s employment for job performance

deficiencies including “inappropriate interaction with students.” Id. at 813.

The officer filed a lawsuit which included a due process claim stemming from

the school district’s failure to follow the requirements of Section 614.023(c) in

firing him. Id. at 813, 821–22. The intermediate Texas court agreed. It held

that state law and district policy adopting Section 614.023(c) conferred a

property interest on the officer: “in the absence of complaints that were signed,

delivered, investigated, and supported by evidence, [the officer] had a

legitimate expectation of continued employment.” Id. at 822.

A different Texas intermediate court seemingly disagreed with this

reasoning, holding that the statute did not alter the general rule of at-will

6

Case: 15-50264 Document: 00513372971 Page: 7 Date Filed: 02/08/2016

No. 15-50264

employment. Staff v. Wied, 470 S.W.3d 251, 258 (Tex. App.—Houston [1st

Dist.] 2015, pet. filed).

The defendants in this case argue that Section 614.023(c) provides

nothing more than a “procedure for terminating an officer when the

termination from employment is ‘based on the subject matter’ of a complaint.”

The district court agreed, citing Texas’s presumption of an at-will employment

relationship and finding nothing in the statute that would affect the

presumption. Dismissing Stem’s reliance on the Turner decision, the district

court said its result “was the combination of the statute and [a] policy manual”

specifically adopting Section 614.023, “which created the property interest

found in that case, and which is not present in this case.”

The district court was correct that Turner emphasized the school

district’s incorporation of Section 614.023 into its manual. See Turner, 278

S.W.3d at 822 & n.21. Nonetheless, state statutes themselves can create a

property right in continued employment. See Henderson v. Sotelo, 761 F.2d

1093, 1095–96 (5th Cir. 1985) (citing Slochower v. Bd. of Higher Educ., 350

U.S. 551, 554, modified on denial of reh’g, 351 U.S. 944 (1956)). The statutory

procedures at issue are to be applied in certain disciplinary situations without

any stated requirement that they first be adopted by the governing body itself

as policy. See Tex. Gov’t Code Ann. §§ 614.021–.023.

Stem argues that Section 614.023 grants covered employees the right to

a finding of cause before they can be fired. A causal basis for termination is

generally not needed in Texas, where employment is at-will unless a contract,

statute, or other authority overrides that presumption. See Mott v.

Montgomery Cnty., 882 S.W.2d 635, 637–38 (Tex. App.—Beaumont 1994, writ

denied). Section 614.023 certainly does not explicitly provide that an officer

facing a complaint can only be terminated for cause. Section 614.023 also does

not resemble other statutes that clearly establish such a rule. For example, a

7

Case: 15-50264 Document: 00513372971 Page: 8 Date Filed: 02/08/2016

No. 15-50264

stronger argument for a property interest would arise from a statute that

requires a Civil Service Commission authorized by a city’s electorate to “adopt

rules that prescribe cause for removal or suspension” for police and fire

personnel. Tex. Loc. Gov’t Code Ann. §§ 143.008, 143.051; see also 59 TEX. JUR.

3D POLICE, ETC. § 28 (explaining the process due before an officer may be

terminated under Section 143.051). We also must consider that “courts should

not insert words in a statute except to give effect to clear legislative intent.” In

re Bell, 91 S.W.3d 784, 790 (Tex. 2002).

Before a property interest would exist, Section 614.023 would have to

constrain the city in a meaningful way from discharging a protected employee.

There is no property right if rules only provide considerations for the exercise

of discretion. See Moore v. Otero, 557 F.2d 435, 437 n.6 (5th Cir. 1977). To

determine whether the statute meaningfully limits the city’s discretion, we

examine how the statute operates, its relevant legislative history, and case

law.

First, Section 614.023’s protections apply when disciplinary action is

based on the subject of a “complaint.” One implication is that in all other

situations, an officer may be discharged for a good reason, a bad reason, or no

reason without the process provided. Stem does not assert that his termination

was the result of any particular person’s submission to his employer of an

objection to Stem’s conduct. Regardless, as discussed in more detail below, we

decline to delve into the question of whether a “complaint” exists. No authority

from the Texas Supreme Court has been discovered defining that state

statutory term, and we may avoid announcing a non-authoritative definition.

Second, the relevant legislative history, including a staff-prepared “bill

analysis,” is instructive. In determining the meaning of a statute, the Texas

Supreme Court analyzes statements by the legislation’s authors, testimony at

8

Case: 15-50264 Document: 00513372971 Page: 9 Date Filed: 02/08/2016

No. 15-50264

committee hearings, and bill analyses. 2 Quick v. City of Austin, 7 S.W.3d 109,

123 (Tex. 1998). When Section 614.023(c) was enacted in 2005, the bill analysis

prepared by the Texas House Research Organization stated that the original

draft of the legislation required that there be “sufficient evidence,” not just

“evidence” as provided in the final statute. TEX. H. RESEARCH ORG., BILL

ANALYSIS, H.B. 639, 79th Leg., Reg. Sess. (2005). Legislative drafters

intentionally declined to define what would constitute “sufficient evidence to

prove an allegation of misconduct,” so that “discretion to decide what is

sufficient [would be] in the hands of the state and local departments, where it

lies already.” Id. Additionally, before sending the bill to the Texas Senate for

consideration, state representatives removed the term “sufficient” altogether,

thereby eliminating any threshold amount of evidence that must be present

before disciplinary action may be taken. TEX. H. JOURNAL, H.B. 639, 79th Leg.,

Reg. Sess., 565–66 (2005).

Third, in other cases, we have considered laws requiring a specific

procedure to be followed prior to termination and held that no property interest

existed. One of our decisions dealt with a building inspector who filed suit

under Section 1983 against a city because his employment was summarily

terminated. Henderson, 761 F.2d at 1094–95. The inspector claimed he was

unlawfully deprived of property without due process of law. Id. at 1095. He

claimed a property interest in continued employment in the city charter, which

2 The Texas Legislature’s House Research Organization and Senate Research Center

prepare bill analyses to explain the “version of [a] bill as it was reported by [a] . . . committee

and first considered by” the corresponding body. Tex. H. Research Org., Bill Analyses, TEX.

HOUSE OF REPRESENTATIVES, http://www.hro.house.state.tx.us/BillAnalysis.aspx (last

visited Dec. 6, 2015); Tex. Senate Research Ctr., Bill Analyses, TEX. SENATE,

http://www.senate.state.tx.us/SRC/BA.htm (last visited Dec. 6, 2015). Texas courts consider

bill analyses as persuasive legislative history in determining legislative intent. See Quick v.

City of Austin, 7 S.W.3d 109, 123 (Tex. 1998).

9

Case: 15-50264 Document: 00513372971 Page: 10 Date Filed: 02/08/2016

No. 15-50264

“provide[d] that the City Manager ‘shall . . . appoint and/or remove all

department heads . . . with the advice and consent of the [City] Commission.’”

Id. at 1096. We held that the charter provision was a pre-termination

procedure that did not create a property right. Id. at 1097. One of the Texas

courts of appeals, when analyzing Section 614.023, relied in part on Henderson

to hold that “either the State or the employer may implement policies and

procedures for resolving complaints and grievances without altering the

employee’s status as an at-will employee.” Staff, 470 S.W.3d at 258.

In summary, there is no authoritative decision from the Texas Supreme

Court as to whether Section 614.023(c) creates a property interest. When

interpreting state law, we are “guided by the decisions of state intermediate

appellate courts unless other persuasive data indicate[] that the [state’s]

Supreme Court would decide otherwise.” Patin v. Thoroughbred Power Boats

Inc., 294 F.3d 640, 646 (5th Cir. 2002). Here, there is a disagreement among

the state courts of appeals. Compare Staff, 470 S.W.3d at 258, with Turner,

278 S.W.3d at 821–22. In our view, Section 614.023 assures that an officer

against whom a complaint is filed understands the allegations against him and

receives a meaningful investigation into the accuracy of those allegations. A

right to an investigation, though, does not create a property right. See

Henderson, 761 F.2d at 1097–98; Davis v. Dallas Indep. Sch. Dist., 448 F. App’x

485, 496 (5th Cir. 2011). A city’s “‘merely conditioning an employee’s removal

on compliance with certain specified procedures’ does not necessarily mean

that an employee has a substantive property right in continued employment.”

Irby v. Sullivan, 737 F.2d 1418, 1422 n.4 (5th Cir. 1984) (quoting Bishop v.

Wood, 426 U.S. 341, 345 (1976)). We also know that the legislation was not

aimed at abrogating the right to discharge at will. TEX. H. RESEARCH ORG.,

BILL ANALYSIS, H.B. 639, 79th Leg., Reg. Sess. (2005). Finally, it is not even

clear that the statute applies here, because the statutory meaning of a

10

Case: 15-50264 Document: 00513372971 Page: 11 Date Filed: 02/08/2016

No. 15-50264

“complaint” is unsettled.

The district court did not err in dismissing Stem’s Section 1983 claim.

Section 614.023 is analogous to the charter provision in Henderson. Both laws

require some action to be taken before termination of employment can occur,

but no property right is created by that requirement.

III. Dismissal of State-Law Claims

The district court implicitly dismissed Stem’s claims under the Federal

Declaratory Judgment Act and against the mayor in his individual capacity

when it dismissed the case. Stem does not argue on appeal that this was error.

If a party fails to mention a district court’s disposition of certain claims in its

briefing, such claims “are considered abandoned.” Huckabay v. Moore, 142

F.3d 233, 238 n.2 (5th Cir. 1998). Thus, we decline to discuss the Federal

Declaratory Judgment Act or the individual claim against the mayor.

Stem’s state-law declaratory relief claim was brought under the Texas

Uniform Declaratory Judgment Act, Texas Civil Practice and Remedies Code

Chapter 37. He seeks back pay and benefits against the city and mayor in his

official capacity. The district court concluded that sovereign immunity barred

such relief. Additionally, the district court held that Stem failed to sue the

proper parties and that Section 614.023 is inapplicable to Stem’s situation.

Under Texas law, sovereign immunity protects the state, its political

subdivisions, and cities from lawsuits for money damages or other retroactive

relief by depriving a court of subject matter jurisdiction. See City of El Paso v.

Heinrich, 284 S.W.3d 366, 375–76 (Tex. 2009); Reata Constr. Corp. v. City of

Dallas, 197 S.W.3d 371, 374 (Tex. 2006). Immunity still applies when a

plaintiff mischaracterizes a suit for money damages as one for a declaratory

judgment. City of Dallas v. Albert, 354 S.W.3d 368, 378 (Tex. 2011). Though

sovereign immunity may be waived, there is no waiver in Section 614.023 and

11

Case: 15-50264 Document: 00513372971 Page: 12 Date Filed: 02/08/2016

No. 15-50264

its related sections. See Tex. Gov’t Code Ann. §§ 614.021–.023. Because

sovereign immunity has not been waived, we agree that Stem is not entitled to

seek back pay or benefits.

Stem, however, also seeks prospective relief in the form of reinstatement.

He contends that the ultra vires exception to sovereign immunity allows his

claim for prospective relief to proceed. The Texas Supreme Court has clarified

the law related to claims for declaratory relief and this exception. See

Heinrich, 284 S.W.3d at 375–76. In Heinrich, the widow of a police officer filed

suit under the Texas Uniform Declaratory Judgment Act claiming a city

violated her statutory rights when it altered her pension benefits. Id. at 369–

70. The court explained that an ultra vires lawsuit aimed at “requir[ing] state

officials to comply with [a] statut[e] . . . [is] not prohibited by sovereign

immunity.” Id. at 372. Such lawsuits, however, must be brought against state

actors in their official capacity and not the state itself, even though the claims

are effectively against the state. Id. at 372–73. Ultra vires lawsuits also must

“allege, and ultimately prove, that [such state officials] acted without legal

authority or failed to perform a purely ministerial act.” Id. at 372. The court

allowed the widow to pursue her claims for prospective relief against the state

officials pursuant to the ultra vires exception but dismissed her claims for

retrospective monetary relief and her claims against the city and other

governmental entities. Id. at 369, 379–80.

Here, Stem has filed suit against the City of Hearne and the mayor in

his individual and official capacity for trampling on Stem’s rights guaranteed

by Section 614.023. Under Heinrich, sovereign immunity insulates the city

from the lawsuit. Id. at 379–80. The district court properly dismissed that

claim. Stem’s claim against the mayor in his official capacity does fall under

the ultra vires exception, and is not initially barred. Id. at 372–73.

Despite clearing the hurdle related to sovereign immunity, Stem’s claim

12

Case: 15-50264 Document: 00513372971 Page: 13 Date Filed: 02/08/2016

No. 15-50264

against the mayor in his official capacity was nonetheless properly dismissed.

Section 614.023(c) expressly provides that a covered individual “may not be

indefinitely . . . terminated from employment based on the subject matter of

the complaint unless . . . the complaint is investigated[,] and . . . there is

evidence to prove the allegation of misconduct.” Therefore, the proper

defendants are the city officials who had the power to terminate Stem’s

employment, actually did terminate his employment, and now have the power

to reinstate him.

Stem alleges in his complaint that the mayor recommended his dismissal

and that the Hearne City Council acted on that recommendation. Yet, the only

official capacity claim Stem brought was against the mayor. The complaint

does not assert that the mayor has a statutory role in City Council meetings,

claim the mayor actually cast a vote to dismiss Stem, or recount the final tally

among those who did vote. Stem explains in his brief that “[t]he mayor called

the meeting, set the agenda, and presided over the meeting where he and the

Council voted to terminate” him. The Supreme Court has said that a court

may draw reasonable inferences in determining “facial plausibility” for

purposes of a Rule 12(b)(6) motion. Iqbal, 556 U.S. at 678. Without more

details, though, the only reasonable inference that can be drawn from the

complaint is that the mayor simply recommended dismissal. Thus, Stem failed

to state a claim against the mayor in his official capacity. The district court

properly dismissed his claim.

The district court also stated that “Chapter 614 is inapplicable to

[Stem’s] separation.” As previously discussed, we do not find it necessary to

determine the statute’s applicability. Texas courts have not resolved

important questions about Section 614.023, such as the kind of complaint and

13

Case: 15-50264 Document: 00513372971 Page: 14 Date Filed: 02/08/2016

No. 15-50264

complainant that activate the procedural safeguards in the statute. 3 Section

614.023 applies to a broad array of law enforcement officers and others. See

Tex. Gov’t Code Ann. § 614.001(3). Therefore, any interpretation of Section

614.023 could have a far-reaching impact on governmental entities’ internal

operations and the way community members interact with their police, fire

safety, and other peace-keeping personnel. We have held that Stem’s claim for

declaratory relief against the city and mayor in his official capacity fail for

other reasons. Principles of federalism and comity must be considered as to

every aspect of a suit, and “judicial economy, convenience, fairness, and

comity” require us to avoid unnecessarily deciding novel and significant

matters of state law. See Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350

(1988). One clear benefit of pretermitting such issues is that before they again

present themselves in federal court, a clear answer from Texas precedent may

be available.

IV. Motion for Leave to Amend

Stem moved for leave to amend his complaint as to his state-law

declaratory judgment claim. Leave to amend should be “freely give[n] . . . when

justice so requires.” FED. R. CIV. P. 15(a)(2). A court must have a “‘substantial

reason’ to deny a party’s request for leave to amend.” Marucci Sports, L.L.C.

v. Nat’l Collegiate Athletic Ass’n, 751 F.3d 368, 378 (5th Cir. 2014) (quoting

Jones v. Robinson Prop. Grp., L.P., 427 F.3d 987, 994 (5th Cir. 2005)).

3See Guthery v. Taylor, 112 S.W.3d 715, 721–23 (Tex. App.—Houston [14th Dist.]

2003, no pet.) (holding that a complainant is any “person claiming to be the victim of

misconduct by a[n] . . . officer” by referencing Local Government Code Section 143.123);

Treadway v. Holder, 309 S.W.3d 780, 784 (Tex. App.—Austin 2010, pet. denied) (holding 2–1

that a “complaint” includes internal complaints by an agency head); City of Houston v.

Wilburn, 445 S.W.3d 361, 365 (Tex. App.—Houston [1st Dist.] 2013, no pet.) (avoiding the

“question of whether Chapter 614 requires a signed complaint in all circumstances resulting

in disciplinary action against employees under its purview”).

14

Case: 15-50264 Document: 00513372971 Page: 15 Date Filed: 02/08/2016

No. 15-50264

“[F]ailure to provide an adequate explanation to support . . . denial of leave”

may be grounds for reversal. Marucci Sports, 751 F.3d at 378 (quotation marks

omitted). When an amended complaint would still “fail to survive a Rule

12(b)(6) motion,” it is not an abuse of discretion to deny the motion. Id.

When requesting leave to amend, Stem specifically provided that his

amended complaint would (1) plead that Section 614.023 has been adopted by

the city, (2) plead that the city had followed the mandates of Section 614.023

in the past, (3) name each councilmember who voted to terminate his

employment and/or the police chief as defendants, and (4) request prospective

relief. The district court failed to address Stem’s request in its opinion

dismissing the lawsuit, judgment denying all outstanding motions, and opinion

in response to Stem’s motion for reconsideration.

The first and second proposed amendments, which might correct

pleading deficiencies related to Stem’s Section 1983 claim, would have been

futile. We have held that Section 614.023 creates no property interest in

employment. Therefore, Stem cannot plead that he was deprived of a

constitutional right. Denying an amendment to the Section 1983 claim was

not error. Stem’s third and fourth proposals, though, would have cured

previously discussed deficiencies in Stem’s complaint related to his state-law

claim for declaratory relief. The amendment would not have been futile.

We find that in this situation, the “failure to provide an adequate

explanation to support” the denial of leave to amend is grounds for reversal.

Marucci, 751 F.3d at 378. There may have been unarticulated but valid

reasons, such as that the amendment would have merely corrected the

pleading of a state-law claim after the dismissal of all federal claims. Courts

are to consider “judicial economy, convenience, fairness, and comity,” and

specifically whether it “has dismissed all claims over which it has original

jurisdiction,” when deciding whether to exercise supplemental jurisdiction. See

15

Case: 15-50264 Document: 00513372971 Page: 16 Date Filed: 02/08/2016

No. 15-50264

Carnegie-Mellon, 484 U.S. at 350; 28 U.S.C. § 1367(c). Because the decision is

to be made at the discretion of the district court, we remand for an explanation

of the discretion’s exercise.

***

We REVERSE the district court’s denial of Stem’s motion for leave to

amend his complaint, and REMAND. We REVERSE the district court’s

dismissal for lack of jurisdiction. We otherwise AFFIRM.

16