Hampton Co. Nat. Sur., LLC v. Tunica County, Miss.

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT United States Court of Appeals

Fifth Circuit

FILED

September 18, 2008

No. 07-60859 Charles R. Fulbruge III

Clerk

THE HAMPTON COMPANY NATIONAL SURETY LLC, A Mississippi Limited

Liability Company; JAMES DEAN, An Individual; JAMES HAMPTON

GARDNER, An Individual

Plaintiffs-Appellants

v.

TUNICA COUNTY MISSISSIPPI; CALVIN HAMP, SR, Individually

Defendants-Appellees

Appeal from the United States District Court

for the Northern District of Mississippi

Before KING, HIGGINBOTHAM, and SOUTHWICK, Circuit Judges.

Leslie H. Southwick, Circuit Judge:

A surety company and two of its agents appeal from a summary judgment

that dismissed their various Section 1983 claims. We affirm that part of the

judgment that dismissed a Due Process claim against the sheriff who barred

them from writing bail bonds in one county. Finding disputes of material fact,

we reverse judgment on that same claim against the county and on the First

Amendment and Equal Protection claims against both the sheriff and the county

based on the same events. We remand.

No. 07-60859

I. BACKGROUND

The issues in this case arise from the decision by Tunica County,

Mississippi Sheriff Calvin Hamp, Sr., to remove the three Plaintiffs from a roster

of bail bond agents approved to write bonds in that county. The removal lasted

from February 2005 until December 2006. Removed were Plaintiff James

Hampton Gardner, who is a professional bond agent, and his bail bonding

business Hampton Company National Surety, LLC, which also is a Plaintiff.

Also removed was a third Plaintiff, James Dean, a licensed bail soliciting and

bail enforcement agent employed by Gardner. Relevant to the claims, both

Gardner and Dean are white males, while the Sheriff is an African-American.

During the entire period, Gardner and Dean were in good standing with the

Mississippi Department of Insurance which regulates their bail-bond licenses.

It is undisputed that Sheriff Hamp prohibited the Plaintiffs from writing

bonds in Tunica County. Disputed are the Sheriff’s reasons. The Plaintiffs

allege that the Sheriff retaliated for Gardner and Dean’s participation in

exposing illegal conduct by the prior sheriff, and also for criticizing Hamp. Also

alleged is that the decision was racially motivated.

The Defendants alleged that the Plaintiffs’ removal was because three

criminal defendants they bonded failed to appear at a scheduled arraignment.

Two other bail bondsmen, both African-American, were taken off the approved

list at the same time for similar reasons. The Defendants assert that Plaintiffs

remained off the approved list only because they failed to ask the Circuit Clerk

to inform Hamp that the default was cured.1 The other bail bondsmen who were

removed from the list promptly informed the Circuit Clerk that their arrearages

were remedied, and they were again placed on the approved list.

1

Dean also was not placed back on the roster because an investigation allegedly

revealed he loaned money to a deputy in violation of state law. Plaintiffs allege this happened

well after the removal by the Sheriff and does not affect Dean’s claims in this suit.

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The Plaintiffs brought a Section 1983 suit against Sheriff Hamp in his

individual capacity and against Tunica County. They alleged violations of their

constitutional rights under the Due Process and the Equal Protection Clauses

of the Fourteenth Amendment, and the First Amendment. The district court

granted summary judgment in favor of the Defendants on all claims, holding

that Defendant Hamp was entitled to qualified immunity and that the claims

against Tunica County failed because the Plaintiffs did not establish that a

custom or policy of the County deprived the Plaintiffs of a clearly established

constitutional right. The Plaintiffs timely appealed.

We review the grant of summary judgment de novo, applying the same

standard as the district court. Facts are viewed in the light most favorable to

the nonmovant. Summary judgment is appropriate “when no issue of material

fact exists and the moving party is entitled to judgment as a matter of law.”

Mowbray v. Cameron County, Tex., 274 F.3d 269, 278-79 (5th Cir. 2001).

II. DISCUSSION

The Plaintiffs have brought their claims under a statute that provides a

remedy against “[e]very person who, under color of any statute, ordinance,

regulation, custom, or usage, . . . subjects, or causes to be subjected, any citizen

of the United States or other person . . . to the deprivation of any rights,

privileges, or immunities secured by the Constitution and laws” of the United

States. 42 U.S.C. § 1983. A “municipality,” which in this jurisprudence includes

other local governmental units such as a county, is a “person.” Monell v. New

York City Dep’t of Soc. Servs., 436 U.S. 658, 690 (1978).

Though the statute is broadly written, individual government officials

performing official and discretionary functions have a qualified immunity from

personal liability. We will later discuss the two parts of a sequential test that

determines whether the immunity applies.

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A county’s liability under Section 1983 arises when “official policy or

governmental custom is responsible for a deprivation of rights protected by the

Constitution . . . .” Bennett v. City of Slidell, 728 F.2d 762, 766 (5th Cir. 1984).

The district court determined that Sheriff Hamp was entitled to qualified

immunity on the Due Process and Equal Protection claims. With regard to the

First Amendment claim, the court held that the Plaintiffs could not demonstrate

that the actions of Hamp were objectively unreasonable. As to Tunica County,

the court also granted summary judgment because the court found no

deprivation of a constitutional right.

With these standards, we review the district court’s ruling. The Plaintiffs’

claims against Sheriff Hamp and Tunica County are identical. Even so, on the

Due Process claims, separate analyses regarding the Sheriff and the County are

necessary. We do not need to make that separation for the Equal Protection and

Free Speech analysis.

(a) Due Process claim against Sheriff Hamp

Procedural Due Process “imposes constraints on governmental decisions

that deprive individuals of ‘liberty’ or ‘property’ interests within the meaning of

the Due Process Clause of the Fifth or Fourteenth Amendment.” Mathews v.

Eldridge, 424 U.S. 319, 332 (1976). When a property interest is taken, “some

form of hearing is required” before a final deprivation of the interest. Id. The

Plaintiffs allege that Sheriff Hamp violated these rights by removing them from

the approved roster without following the procedures required for suspending or

revoking a state-issued bail bondsman license.

In determining whether qualified immunity applies to this official’s

actions, a two-part sequential test is applied. First we determine, viewing the

summary judgment evidence in the light most favorable to the plaintiff, whether

some evidence supporting the violation of a constitutional right exists. Saucier

v. Katz, 533 U.S. 194, 199 (2001). Whether there is evidence to support the

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No. 07-60859

conclusion that a constitutional right was violated is a legal question. Siegert v.

Gilley, 500 U.S. 226, 232 (1991).

Only if there is some evidence to support the violation of a constitutional

right do we analyze whether “the defendant’s actions were objectively

unreasonable in light of clearly established law at the time of the conduct in

question.” Freeman v. Gore, 483 F.3d 404, 410-11 (5th Cir. 2007). Applying this

standard, we decide “whether reasonably competent officers would have known

that their actions violated law which was clearly established at the time of the

disputed action.” Collins v. Ainsworth, 382 F.3d 529, 537 (5th Cir. 2004).

To overcome the first part of the qualified immunity defense, the Plaintiffs

must demonstrate that a state-licensed fidelity and surety company and its

agents who write bail bonds have a property right to issue those bonds in a

particular county. This is the necessary right because that is the limit of what

the Sheriff took, and from whom he took it. When there is no “property interest,

there is nothing subject to Due Process protections and our inquiry ends.”

Cabrol v. Town of Youngsville, 106 F.3d 101, 105 (5th Cir. 1997). Mississippi

law controls on whether a property interest exists: “Property interests, of course,

are not created by the Constitution. Rather, they are created and their

dimensions are defined by existing rules or understandings that stem from an

independent source, such as state law . . . .” Bd. of Regents of State Colleges v.

Roth, 408 U.S. 564, 577 (1972).

The Plaintiffs argue that a property right arises from the state statutes

that establish the licensing and regulatory rules for bail bonds in Mississippi.

See Miss. Code Ann. §§ 83-39-1 et seq. Agents writing bail bonds in Mississippi

must be licensed by the Mississippi Commissioner of Insurance under this

statutory scheme – not by county sheriffs.

The argument is based on a valid premise, namely, that a state-issued

license can create a property interest cognizable under the Due Process clause:

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Once licenses are issued, . . . their continued possession may become

essential in the pursuit of a livelihood. Suspension of issued

licenses . . . involves state actions that adjudicates important

interests of the licensees. In such cases the licenses are not to be

taken away without that procedural due process required by the

Fourteenth Amendment.

Bell v. Burson, 402 U.S. 535, 539 (1971). In this case, no state-issued license has

been taken. Any taking here was limited to a right to write bonds in one county.

Our issue is whether the state license was qualified by the right of a sheriff to

limit its use in a county because of acts or omissions in that county.2

Plaintiffs have cited us to no appellate authority to support their position

that a sheriff may not within his county at least temporarily restrict the issuer

of bail bonds. However, there is recent state trial court authority that this

Sheriff had no statutory authority to suspend these Plaintiffs; review of that

judgment is pending in the Mississippi state appellate system. Hampton Co.

Nat’l Sur., LLC v. Tunica County, No. 2005-0391 (Miss. Cir. Ct. 11th Dist. Apr.

3, 2008) (order granting injunctive and declaratory relief), appeal docketed, 2008-

TS-00756 (Miss. 2008). The result may be to define the relevant rights of bail

bondsmen. If a sheriff is found not to have the discretion exercised here, bail

bondsmen might have a reasonable expectation that their right to write such

bonds may not be taken. No discretion in the official and a reasonable

expectation in the citizen are central elements of a protected property interest.

Town of Castle Rock, Colo. v. Gonzales, 545 U.S. 748, 756 (2005).

Though the decision we are referencing is that of a state trial court, such

a decision may be “attributed some weight” on interpreting state law. Comm’r

of Internal Revenue v. Bosch’s Estate, 387 U.S. 456, 465 (1967). One of the most

2

We were informed at oral argument that the three judges of the state circuit court

district that includes Tunica County have entered an order that bail bondsmen who default

in certain ways may be suspended by the court from issuing bonds. We were not told what

process is given before such a suspension. That order reveals that this appeal presents only

one of multiple current questions about local control of a state-licensed surety.

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persuasive federal procedure treatises states that a federal court may consider

a state trial court decision when searching for the meaning of state law:

State trial court decisions are treated somewhat differently, and

quite naturally, with somewhat less deference than is given to state

appellate courts. They also are entitled to consideration as an

indication of what the state law is, but in and of themselves they are

not controlling on the federal courts if they are not regarded as

precedents within the state itself.

19 CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND

PROCEDURE § 4507 (2008).

Sheriff Hamp, on the other hand, has cited a precedent from this court in

which we made an Erie guess as to whether a bail agent had a protectible

property interest in writing bonds in a particular county in Mississippi. Baldwin

v. Daniels, 250 F.3d 943, 946 (5th Cir. 2001). Considering an almost identical

set of facts, we held that the ability of a bail bondsman to have bonds accepted

in a particular county is not a property or liberty right protected by the

Fourteenth Amendment. Id. We based that decision on what we found to be the

sheriff’s discretion. Id. As we noted above, the recent state trial court ruling

in the related Hampton case found a sheriff to have no discretion to suspend bail

bonding privileges. Hampton Co. Nat’l Sur., No. 2005-0391, at ¶ 6.

What Mississippi ultimately concludes on the point will control in the

future, but public officials are not oracles. Whatever the law may be one day,

the best understanding of the law when Sheriff Hamp acted was that expressed

in Baldwin. Even if the Sheriff violated a constitutional right, the second step

in the qualified immunity analysis is to examine whether “the defendant’s

actions were objectively unreasonable in light of clearly established law at the

time of the conduct in question.” Freeman, 483 F.3d at 410-11. The Baldwin

opinion is the principal authority relevant to the time at which Defendant Hamp

acted. Accordingly, there was no clearly established law in Mississippi that

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No. 07-60859

would have made his actions objectively unreasonable. An uncertain right

cannot be “a clearly established” right. Qualified immunity applies to the claim

that Sheriff Hamp violated Due Process rights.

(b) Due Process claim against Tunica County

A local governmental unit does not receive the qualified immunity that

shields Sheriff Hamp. Yet neither is a “municipality” liable under Section 1983

based on respondeat superior. Instead, “municipal liability under section 1983

requires proof of three elements: (1) a policymaker; (2) an official policy; and (3)

violation of constitutional rights whose moving force is the policy or custom.”

Piotrowski v. City of Houston, 237 F.3d 567, 578 (5th Cir. 2001).

The concept of “policy” in this standard is broader than laws or actions

that have been given formal approval through an entity’s policymaking

channels. Woodard v. Andrus, 419 F.3d 348, 352 (5th Cir. 2005). When the

person who committed the challenged act is in charge of policymaking in that

part of the government, “policy” can sometimes be found to have been

established by the very act itself. Id. The act must be by a final decisionmaker

who also is the policymaker, unconstrained by policies imposed from a higher

authority. Jett v. Dallas Indep. Sch. Dist., 7 F.3d 1241, 1247 (5th Cir 1993). In

addition, even absent a policymaker’s act or a formal policy, enforcement of a

sufficiently established custom or practice may be the basis for liability. Pineda

v. City of Houston, 291 F.3d 325, 329-31 (5th Cir. 2002) (must be a “persistent

and widespread practice”). No evidence exists here of a formal policy or a

custom, so any liability must arise from the single acts of this Sheriff.

As to this Sheriff’s policy role in the liability analysis, this Circuit has

already held “Sheriffs in Mississippi are final policymakers with respect to all

law enforcement decisions made within their counties.” Brooks v. George

County, Miss., 84 F.3d 157, 165 (5th Cir. 1996); see also McMillian v. Monroe

County, Ala., 520 U.S. 781, 784-93 (1997) (whether a sheriff is a policymaker is

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a state-law question). Determining which bonding companies were authorized

to write bonds at the Tunica County jail logically is part of that law enforcement

authority. The Sheriff’s decision to deny the Plaintiffs the right to issue bonds

is the kind of single decision by the relevant policymaker that can be the basis

of liability.

Though Mississippi sheriffs implement policy, there must also be some

evidence to withstand summary judgment that this County through this

Sheriff’s actions was the moving force behind and direct cause of the alleged

injury. Bd. of Comm’rs of Bryan County, Okla. v. Brown, 520 U.S. 397, 404-05

(1997); see also Williams v. Kaufman County, 352 F.3d 994, 1013, 1014 & n.66

(5th Cir. 2003) (deliberate indifference is not a factor when the county through

its policymaker has directly caused the alleged injury). We find such evidence

– there is no dispute that it was the chief policymaker’s decision that was the

moving force and direct cause of the removal.

All the elements of a Due Process claim against Tunica County are

therefore present, except for whether there was any constitutional right in the

first place. Unlike in the determination of qualified immunity for the Sheriff,

the County cannot rely on there being no clearly established right when the

Sheriff acted. Instead, a county may be liable even when the property right had

not been clearly known. Accordingly, the litigation on appeal in the Mississippi

state courts is of significance. If the state appellate court in resolving these

same parties’ companion case rejects the Baldwin analysis, Tunica County may

face liability. The state circuit judge did reject Baldwin and found no discretion

in a sheriff to suspend bond-writing rights:

Being of the opinion that bails and bail bonding is a matter now

completely governed by Mississippi statute and finding that Miss.

Code Ann. § 89-39-15 restricts the authority to suspend and/or

revoke a bail bonding license to the Mississippi Department of

Insurance, this court hereby declares that the sheriff of Tunica

County, Mississippi, lacked the authority to suspend or revoke the

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No. 07-60859

bail bonding privileges of Hampton and/or Dean. As such, this court

further finds that the conduct of the sheriff was not in compliance

with Mississippi law.

Hampton Co. Nat’l Sur., No. 2005-0391, at ¶ 7.

What to do with this current uncertainty becomes our question. Certifying

the question to the Mississippi Supreme Court is a possibility. See Miss. R. App.

P. 20. We will not take that step. Because either that court or the intermediate

state appellate court may in due course be addressing this very question, a due

respect for the workload of both state appellate courts suggests we not add to it

with a matter duplicative of something now before it.

We note in this context that both parties claimed after oral argument that

they see no basis to expect the state appellate courts will address issues relevant

here. Our view of what is pending before the Mississippi appellate courts causes

us to wonder, but the point need not be resolved. If a stage is reached in the

resolution of the other matters remanded by our decision today that makes

addressing this issue desirable, but the state appellate system has not yet

resolved the companion case, the district judge may hear from the parties as to

whether in fact they both still take the position that the state decision is

irrelevant to the county’s liability on the Due Process claim. In sum, the district

court can decide how to proceed in the most efficient manner.

We reverse the summary judgment that Tunica County had no liability

under the Due Process claim and remand for further proceedings.

(c) Plaintiffs’ Equal Protection claim

The Plaintiffs’ second claim is for violation of the Equal Protection Clause

of the Fourteenth Amendment. To establish their claim for discrimination under

that clause, the Plaintiffs must demonstrate that they have been treated

differently due to their race; if so, the different treatment “will be strictly

scrutinized and upheld only if it is precisely tailored to further a compelling

government interest.” Sonnier v. Quarterman, 476 F.3d 349, 368 (5th Cir. 2007).

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A plaintiff must also allege that the unequal treatment stemmed from a

discriminatory intent. Id. (“Even if a neutral law has a disproportionately

adverse impact . . ., it is unconstitutional under the Equal Protection Clause only

if the impact can be traced to a discriminatory purpose.”). The district court

granted summary judgment to Defendants on the Equal Protection claim.

The Plaintiffs allege that Sheriff Hamp removed them from the approved

agent list and kept them off the list because of their race. As a reminder, the

Plaintiffs are white, and Sheriff Hamp is African-American. Although black bail

bondsmen were also removed from the approved list at the same time as the

Plaintiffs, the Plaintiffs allege that the other bondsmen were almost

immediately placed back on the approved list. Sheriff Hamp argues that he

removed the Plaintiffs because they failed to produce defendants at an

arraignment and not because of any racial animus.

There are two components of the discriminatory conduct alleged by the

Plaintiffs. First is their initial removal from the approved roster. It is

undisputed that both white and black bail bondsmen were removed from the

approved list at the same time, ostensibly for not having criminal defendants

appear. Therefore, the Plaintiffs cannot show divergent treatment of similarly

situated white and black individuals with regard to the initial removal.

The second component of the potentially discriminatory conduct is the

continued removal of the white bail bondsmen from the approved list while

shortly after their removal, the black bail bondsmen were reinstated. The

Plaintiffs allege that they were kept off the roster because they are white. The

Sheriff alleges they were not reinstated because they failed to inform the Circuit

Clerk that they had cured the deficiencies on their bond.

To support his interpretation, the Sheriff testified that the Circuit Clerk

was responsible for informing him that the arrearages had been satisfied. The

Clerk testified that she would provide a receipt to individual bondsmen when

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No. 07-60859

they satisfied their arrearage. The bondsmen were then responsible for taking

the receipt to the Sheriff’s office to be placed back on the approved roster.

However, Plaintiff Dean testified that when he followed these steps and

presented his proof at the Sheriff’s office, he was told that he would not be placed

back on the approved roster. Dean stated that he attempted to speak to the

Sheriff about going back on the list but could never speak with the Sheriff.

Taking a view of the evidence that is favorable to the Plaintiffs, we see

support for the proposition that the Sheriff removed Plaintiffs from the approved

list and then did not reinstate them after they satisfied their arrearages;

similarly situated black bail bondsmen were reinstated. This evidence is

sufficient to demonstrate a discriminatory purpose if it “implies that the decision

maker singled out a particular group for disparate treatment and selected his

course of action at least in part for the purpose of causing its adverse effect on

an identifiable group.” Priester v. Lowndes County, 354 F.3d 414, 424 (5th Cir.

2004) (citation omitted).

There is a factual dispute about Hamp’s possibly disparate treatment of

white and black bail bondsmen. There is no qualified immunity for racial

discrimination as such discrimination is clearly unconstitutional. The County

would also be liable if all the elements for municipal liability are shown.

Consequently, we reverse judgment on the Equal Protection claim as to both

Defendants and remand.

(d) First Amendment claim

The final claim is that Sheriff Hamp’s actions violated the Plaintiffs’ First

Amendment rights. There are four elements to a cognizable First Amendment

claim: (1) an adverse decision; (2) speech that involves a matter of public

concern; (3) a plaintiff’s interest in commenting on matters of public concern

must outweigh the defendant’s interest in promoting efficiency; and (4) the

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speech must have motivated the defendant’s action. Breaux v. City of Garland,

205 F.3d 150, 156 (5th Cir. 2001).

The Plaintiffs allege that they were removed from the approved list and

then not reinstated for two reasons: they assisted in the investigation of the

predecessor sheriff regarding the extortion of bail-bonding companies, and they

sent a letter to the editor of a local newspaper expressing concern over Sheriff

Hamp’s handling of bail bondsmen. The Plaintiffs assert that the Sheriff’s

argument that they were removed and not reinstated because of bond arrearages

was a pretext. The newspaper editorial critical of Sheriff Hamp was published

only two months before the Plaintiffs were removed as approved bail bondsmen.

In one of the earlier discussed precedents, we found that a bail bondsman

who was removed from the approved list after complaining about a new rotation

system for bail bonding, had a cognizable First Amendment claim. Baldwin, 250

F.3d at 945. Though the Baldwin court found no liability on that bail

bondsman’s Due Process claim, it reversed the judgment dismissing the claim

that a sheriff had retaliated for that bail bondsman’s complaint about how the

sheriff was handling bonds. We remanded that claim for a trial. It is true that

in the present case, the Plaintiffs were removed along with other bail bondsmen

who have not been shown to have made any controversial statements or

criticisms. However, as with the Equal Protection claim, the failure to reinstate

the Plaintiffs distinguishes the entire action by the Sheriff against these

Plaintiffs from his entire action against the other bail bondsmen.

Sheriff Hamp alleges that the only reason the Plaintiffs were not replaced

on the approved list was because they failed to take the appropriate steps to

notify the Sheriff that the arrearages had been satisfied. The Plaintiffs,

however, present evidence that in fact they cured the arrearages shortly after

being removed. That is not disputed by Sheriff Hamp. They allegedly contacted

both the Circuit Clerk and the Sheriff’s office, but they were not placed back on

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the approved list. The Plaintiffs allege the failure to reinstate them was because

of their prior criticism of the Sheriff. The Sheriff alleges it is because they failed

to inform his office properly that the arrearage was cured.

Construing the evidence in the light most favorable to the Plaintiffs, we

conclude that Hamp was not entitled to summary judgment on this claim. There

was a genuine issue of material fact on the question of the credibility of Hamp’s

justification for not reinstating the Plaintiffs after they satisfied the arrearages.

Therefore, summary judgment was not appropriate on the Plaintiffs’ First

Amendment claim. See Bd. of Educ., Island Trees Union Free Sch. Dist. No. 26

v. Pico, 457 U.S. 853, 873-74 (1982) (plurality).

We AFFIRM in part and REVERSE and REMAND in part.

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