Pettway v. Marshall

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ALABAMA

NORTHEASTERN DIVISION

BRUCE PETTWAY and EMPLOYER )

BENEFITS CONSULTING, LLC, )

)

Plaintiffs, )

)

v. ) Case No. 5:19-CV-1073-KOB

)

ATTORNEY GENERAL STEVE )

MARSHALL, in his individual and official )

Capacities; and BBVA COMPASS BANK, )

)

Defendants. )

MEMORANDUM OPINION

The matter comes before the court on Defendant Attorney General Steve Marshall’s

“Motion to Dismiss,” in which the Attorney General argues that the Younger abstention doctrine

requires the court to abstain from exercising jurisdiction over Plaintiffs’ claims. (Doc. 16). For

the reasons discussed below, the court WILL DENY the Attorney General’s motion to dismiss.

I. Factual Background

Plaintiff Bruce Pettway, the founder of Plaintiff Employee Benefits Consulting, LLC, is

the brother of Jefferson County Sheriff Mark Pettway. (Doc. 11 at ¶¶ 10, 22). Since Sheriff

Pettway’s investiture in January 2019, Plaintiffs allege the Attorney General has publicly

criticized the new sheriff’s supposed failure to enforce Alabama’s misdemeanor gambling laws.

(Doc. 11 at ¶ 23).

Plaintiffs allege Bruce Pettway provided consulting services to Brighton Ventures and

Brighton Ventures II in early 2019 in exchange for a one-time payment of approximately

$15,500, which he deposited into EBC’s BBVA bank account. (Doc. 11 at ¶¶ 13–14, 16).

Plaintiffs allege that in April 2019 Attorney General Marshall told a group of students at

Auburn University that he would “handle the Sheriff” for the Sheriff’s supposed failure to

enforce Alabama’s gambling laws in Jefferson County. (Doc. 11 at ¶ 24).

On or about June 13, 2019, BBVA notified Plaintiffs that the Alabama Attorney

General’s office had frozen EBC’s account with BBVA, which had approximately $240,000 in

it. (Doc. 11 at ¶¶ 19–20).

The Attorney General’s office commenced an in rem forfeiture action in Madison County

against EBC’s BBVA account on July 3, 2019. (Doc. 11-1). Despite the forfeiture action

concerning EBC’s bank account, the petition primarily details the allege gambling operations of

Brighton Ventures. In fact, the petition only mentions EBC twice: once as a party “involved in

the operations of . . . Brighton Ventures” and once as an entity that “may have an interest in the

contents of the account.” (Doc. 11-1 at ¶¶ 3, 9) (emphasis added). The petition never explicitly

identifies the accountholder of the account and never acknowledges the account belongs to EBC.

Plaintiffs filed their first complaint in this court on July 10, 2019, as well as a

simultaneous motion for a preliminary injunction to order the State to unfreeze EBC’s bank

account. (Docs. 1 & 2). Plaintiffs allege they learned of the State’s forfeiture petition on July 19

and filed their first amended complaint that same day, incorporating the ongoing forfeiture

proceeding into their allegations. (Doc. 11 at ¶ 31). Plaintiffs again amended their complaint on

July 23, adding allegations of bad faith. (Doc. 15).

The Attorney General moved to dismiss the complaint on July 24, arguing the court

should abstain from exercising jurisdiction over this matter because it asks the federal court to

intervene in an ongoing state judicial proceeding. (Doc. 17). Plaintiffs filed their response on

July 25, and Attorney General Marshall filed a reply on July 31. (Docs. 22 & 24). The court

considers the matter fully briefed and ripe for review.

II. Standard of Review

As an initial matter, whether courts should analyze the Younger abstention doctrine under

Federal Rule of Civil Procedure 12(b)(1) or 12(b)(6) is not entirely clear. Compare Fairfield

Cmty. Clean Up Crew, Inc. v. Hale, 2:17-CV-308-LSC, 2017 WL 4865545, at *2–3 (N.D. Ala.

Oct. 27, 2017) (applying Rule 12(b)(1) standard) with Cano-Diaz v. City of Leeds, Ala., 882 F.

Supp. 2d 1280, 1284–85 (N.D. Ala. 2012) (applying Rule 12(b)(6) standard). But, when a

defendant makes a facial, rather than a factual, attack on subject matter jurisdiction under Rule

12(b)(1), the court applies a standard of review akin to that of Rule 12(b)(6). Carmichael v.

Kellogg, Brown & Root Services, Inc., 572 F.3d 1271, 1279 (11th Cir. 2009) (“Facial challenges

to subject matter jurisdiction are based solely on the allegations in the complaint. When

considering such challenges, the court must, as with a Rule 12(b)(6) motion, take the complaint’s

allegations as true.”). The Attorney General’s motion to dismiss references both Rule 12(b)(1)

and (6), and its argument against the court exercising jurisdiction presents a facial attack, so the

court applies Rule 12(b)(6) pleading standards to the motion.

The Supreme Court explained that “[t]o survive a motion to dismiss, a complaint must

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

face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S.

544, 555 (2007)). A complaint states a facially plausible claim for relief “when the plaintiff

pleads factual content that allows the court to draw the reasonable inference that the defendant is

liable for the misconduct alleged.” Id. (citation omitted).

The court accepts well-pleaded factual allegations as true on a motion to dismiss, but

legal conclusions unsupported by factual allegations are not entitled to that assumption of

truth. Iqbal, 556 U.S. at 678.

In considering a Rule 12(b) motion, the court is primarily limited to the face of the

complaint and its attachments. “However, where the plaintiff refers to certain documents in the

complaint and those documents are central to the plaintiff’s claim, then the Court may consider

the documents part of the pleadings . . . .” Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116

F.3d 1365, 1368–69 (11th Cir. 1997) (internal citations omitted).

Furthermore, several circumstances exist in which a court may consider matters outside

of the pleadings in ruling on a Rule 12(b) motion without converting the motion to a motion for

summary judgment. See Davis v. Self, No. CV-12-S-2402-NW, 2013 WL 754853, at *2 (N.D.

Ala. Feb 25, 2013). One of these circumstances arises when facts or documents are subject to

judicial notice. See Fed. R. Evid. 201(a)–(d); La Grasta v. First Union Sec., Inc., 358 F.3d 840,

845 (11th Cir. 2004) (“In analyzing the sufficiency of the complaint, we limit our consideration

to the well-pleaded factual allegations, documents central to or referenced in the complaint, and

matters judicially noticed.”).

As reflected in this Memorandum Opinion, Alabama state court proceedings influence

the considerations in this case. Plaintiffs provided some of the relevant documents in their

pleadings, and the parties provided other relevant documents as attachments to their briefs.

Because these documents are part of the public record, the court takes judicial notice of all the

proceedings and filings in Alabama v. Contents of BBVA Compass Bank Account 6720769873,

CV-2019-901241.00.

III. Discussion

Plaintiffs’ complaint challenges the constitutionality of the State’s ongoing application of

Alabama’s search and seizure statute and rule, as well as its use of civil forfeiture proceedings

brought pursuant to Alabama law. So, Defendant moves the court to abstain from exercising

jurisdiction1 over the matter, pursuant to the Younger doctrine of abstention.

In Younger v. Harris, the Supreme Court recognized “the national policy forbidding

federal courts to stay or enjoin pending state court proceedings except under special

circumstances.” 401 U.S. 37, 41 (1971). The court must determine whether the pending state

court proceeding qualifies for Younger abstention, and, if so, whether a “special circumstance”

still warrants exercising jurisdiction over the matter.

Application of Younger doctrine to civil forfeiture proceeding

“Although Younger concerned state criminal proceedings, its principles are ‘fully

applicable to noncriminal judicial proceedings when important state interests are involved.’” 31

Foster Children v. Bush, 329 F.3d 1255, 1274 (11th Cir. 2003) (quoting Middlesex Ct. Ethics

Comm. v. Garden State Bar Ass’n, 457 U.S. 423, 432 (1982)). Moreover, though in an

unreported case, the Eleventh Circuit has already concluded that a state court civil forfeiture

action related to Alabama’s gambling laws “is the type of action to which the Younger abstention

principles generally apply.” Fairfield Cmty. Clean Up Crew, Inc. v. Hale, 735 Fed. App’x 602,

605 (11th Cir. May 22, 2018) (citing Middlesex, 457 U.S. at 432).

Plaintiffs’ brief merely posits that Younger does not apply to noncriminal proceedings but

does not attempt to explain the Supreme Court’s decision in Middlesex or distinguish this case

1 Of course, abstaining from exercising jurisdiction first requires the court to have jurisdiction. While Defendant

does not challenge the court’s subject matter jurisdiction, the court notes that Plaintiffs’ claims arise under 42 U.S.C.

§ 1983, the Fourth Amendment, and the Eighth Amendment, giving this court federal question subject matter

jurisdiction under 28 U.S.C. §§ 1331 and 1343.

from Fairfield. (Doc. 22 at 3). So, the court concludes that, absent “special circumstances,” the

court should abstain from exercising jurisdiction under the Younger doctrine.

“Special circumstances” disfavoring abstention

As noted above, federal courts can still exercise jurisdiction over claims challenging state

court proceedings to which the Younger doctrine would ordinarily apply when the plaintiff can

make a showing of “bad faith, harassment, or any other unusual circumstances that would call

for equitable relief.” Younger, 401 U.S. at 54. The Supreme Court also indicated that when “a

statute [is] flagrantly and patently violative of express constitutional prohibitions in every clause,

sentence and paragraph,” federal courts should not abstain from exercising jurisdiction over a

case challenging that statute. Younger, 401 U.S. at 53 (quoting Watson v. Buck, 313 U.S. 387,

402 (1941)) (emphasis added). These exceptions to the Younger doctrine “establish the kind of

irreparable injury, above and beyond that associated with the defense of a single prosecution

brought in good faith, that had always been considered sufficient to justify federal intervention.”

Id. at 48.

Plaintiffs argue that the State’s forfeiture petition represents a “flagrant and patent”

violation of the Excessive Fines Clause of the Eighth Amendment, militating against abstention.

(Doc. 22 at 6). But the court understands the “flagrant and patent violation” exception to apply to

statutes, not applications of otherwise valid statutes. That is, the language in Younger itself

appears to contemplate a challenge to a state law so obviously unconstitutional on its face that

enforcement in any manner and against any person would still violate that person’s rights.

Younger, 401 U.S. at 53–54.

But, as far as the court can tell, Plaintiffs do not facially challenge the constitutionality of

any Alabama law. Rather, they are challenging the Attorney General’s application of Alabama

law to them. Plaintiffs’ brief cites several cases indicating that the State’s seizure and proposed

forfeiture of the entire $240,000 in EBC’s bank account could violate Plaintiffs’ Eighth

Amendment rights. But Plaintiffs do not provide any authority for an exception to Younger

abstention based on the obvious unconstitutionality of the State’s application of a law. So, the

court rejects this argument as providing an exception to Younger abstention in this case.

Plaintiffs also argue that the court should not abstain from exercising jurisdiction under

Younger because the Attorney General’s office brought the in rem action against Plaintiffs’

assets in bad faith. (Doc. 22 at 3). Plaintiffs fail to provide the court any definition of “bad faith”

in the context of Younger abstention or any relevant caselaw. Defendant points to Supreme Court

opinions that seemingly narrow the bad faith exception to apply only when a “a prosecution has

been brought without a reasonable expectation of obtaining a valid conviction.” Kugler v.

Helfant, 421 U.S. 117, 126 n. 5 (1975); see also Redner v. Citrus Cty., Fla., 919 F.2d 646, 650

(11th Cir. 1990).

But this court has found other opinions expanding the bad faith exception to include

impermissibly motivated prosecutions brought to harass the state action defendant. See, e.g.,

Cameron v. Johnson, 390 U.S. 611, 619 (1968); Fitzgerald v. Peek, 636 F.2d 943, 945 (5th Cir.

Jan. 14, 1981)2; Wilson v. Thompson, 593 F.2d 1375, 1387 (5th Cir. 1979); see also Younger,

410 U.S. at 56 (Brennan, J., concurring) (“He has not alleged that the prosecution was brought in

bad faith to harass him.”) (emphasis added). So, while Defendant’s proffered definition

represents one type of bad faith, the court concludes that improper prosecutorial motives and

harassment can also constitute bad faith sufficient to avoid Younger abstention, “regardless of

whether valid convictions conceivably could be obtained.” Fitzgerald, 636 F.2d at 945.

2 The Eleventh Circuit adopted as binding all Fifth Circuit decisions handed down prior to October 1, 1981. Bonner

v. City of Prichard, Ala., 661 F.2d 1206, 1207 (11th Cir. 1981).

Here, Plaintiffs have alleged facts sufficient to state a plausible claim of bad faith.

Plaintiffs point to Attorney General Marshall’s public criticism of Sheriff Pettway’s lack of

enforcement of gambling laws, including his statement that he would “handle” the sheriff just a

few months before initiating seizure and forfeiture proceedings against Plaintiffs—Sheriff

Pettway’s brother and his brother’s business. (Doc. 22 at 5). Plaintiffs also allege deficient notice

of the state proceedings against them and maintain that the State brought the actions in Madison

County specifically to inconvenience Plaintiffs, who reside over 100 miles away in Jefferson

County. (Doc. 11 at ¶¶ 29–31; Doc. 22 at 4). And the action itself, forfeiture of $240,000 for

alleged “gambling proceeds” far below that amount, strikes the court as facially suspect. Finally,

the court specially notes the State’s misleading forfeiture petition, which appears to insinuate that

the account and the $240,000 sought to be forfeited belong to Brighton Ventures, not Plaintiff

EBC. (Doc. 11-1). Taken together, and as true, Plaintiffs’ allegations plausibly state the claim

that the State’s actions against Plaintiffs were politically or personally motivated, have been

procedurally tainted, were all with the intent to harass Plaintiffs, and were all in bad faith.

Defendant contends that “Plaintiff’s allegations of bad faith . . . completely overlook the

fact that his state court forfeiture proceeding will be presided over by an impartial judge.” (Doc.

24 at 3). The court specifically addresses this argument to clarify that its decision in no way

conveys a lack of faith in the Madison County Circuit Court or the Alabama judiciary. Rather,

“[w]hen the federal right sought to be protected is the right not to be subjected to a bad faith

prosecution or a prosecution brought for the purposes of harassment, the right cannot be

vindicated by undergoing the prosecution.” Shaw v. Garrison, 467 F.2d 113, 122 n. 11 (5th Cir.

1972). That is, the forfeiture proceeding itself, no matter how impartially adjudicated, constitutes

an constitutional violation if brought for the purposes of bad faith or harassment. The allegations

in the complaint plausibly plead bad faith. The court notes that discovery may change or confirm

the conclusion that the court reached here by taking the alleged facts in the complaint as true, as

it must do at the motion to dismiss stage.

IV. Conclusion

So, for the reasons discussed above, the court WILL DENY Attorney General Marshall’s

motion to dismiss. In view of this Memorandum Opinion and the accompanying Order, the

parties shall begin preparing for a hearing on Plaintiffs’ motion for a preliminary injunction,

which the court will schedule by separate Order.

DONE and ORDERED this 8th day of August, 2019.

____________________________________

KARON OWEN BOWDRE

CHIEF UNITED STATES DISTRICT JUDGE