Opposition Brief — Allen Oil & Gas, LLC v. Klish

Supreme US

FILED

(2) JUN 2 0 2005

Lo

OFFICEO

NO. 04-1304 “THE CLERK

IN THE SUPREME COURT OF THE UNITED STATES

ALLEN OIL & GAS, L.L.C.,

Petitioner,

VS.

MICHAEL KLISH, BRUCE JOHNSON,

DANIEL SKRABACZ, and ADRAN PHILLIPS,

Respondents.

On Petition for Writ of Certiorari to

The United States Court of Appeals for the Tenth Circuit

SARA LG: TE MEINE PRET ACRE IR HPT ARLEN NOE DRAIN: AEA TERI HNN NN OE A CIEE

BRIEF IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

John W. Suthers

Attorney General

John J. Krause

Interim Solicitor General

Friedrick C. Haines

First Assistant Attorney General

William V. Allen*

Assistant Attorney General

1525 Sherman Street, Fifth Floor

Denver. Colorado 80203

Telephone: (303) 866-5240

*Counsel of Record

Attorneys for Respondents

June 20, 2005

‘

:

QUESTIONS PRESENTED FOR REVIEW

é Did the Tenth Circuit misapply the standards

of Fed.R.Civ.P. 12(b)(6) when it affirmed dismissal

of Allen Oil & Gas, L.L.C.’s (“AOG’s”) complaint

for failure to state a claim on which relief could be

granted?

a Did the Tenth Circuit err when it affirmed the

District Court’s determination that amendment would

be futile, as there are no facts which AOG could

plead to support its claims?

TABLE OF CONTENTS

PAGE

QUESTIONS PRESENTED FOR REVIEW ................:::000+ i

OPINIONS BELOW ocscisssisccrccctassssaiaaaiaieaiaibineineas l

JURISDICTION .... .csssaccncctateceveasbealealaaaasinlaea diana l

CONSTITUTIONAL, STATUTORY, AND OTHER

PROVISIONS IN VG VURED siasssssetsctcserdicaccetionniabasminierennes 2

STATEMENT OF ‘Tiiie © Biitiesssstavtatsencesssteussumamactantastacnsss 2

REASONS FOR DENYING THE WRIT..............:.ccceeeeeeees 4

I. There Is No Need For This Court To Exercise Its

Supervisory Authority In This Case...................06: 4

A. Petitioner was not subjected to a heightened

Pleading SURIMIIIG,. .:cusssiseersssovsenseelligeiaglnasesisniceannise 4

B. Petitioner failed to amend its complaint despite

numerous opportunities, and in any event failed to

demonstrate how amendment could cure defects in

its COmMpIRRION. ....s:<cccoccssieniomanenemsaiaeinenaedemaeiscete 6

CONCLUSION ......::..:s:sskuideuscsbneneelnaaennapiainte 8

TABLE OF AUTHORITIES

PAGE

CASES

Allen Oil & Gas, L.L.C. v. Klish, et.al., 113

Fed. Appx. 869 (10th Cir. 2004)..........:eccccesesseeeeeeeneenenenees l

Bennett v. Passic, 545 F.2d 1260 (10th Cir., 1976)........... 5, 6

Conley v. Gibson, 355 U.S. 41 (1957) ......secesssseeeseeeeeetenetsees 8

zosek v. O'Mara, 397 U.S. 25 (1970) .........ccscceeesseeeeeseeeeeees 8

Mitchell v. Maynard, 80 F.3d 1433 (10th Cir., 1996)............ 5

Rizzo v. Goode, 423 U.S. 362 (1976)........cccccsseeeseesseeeeeeeees 5

STATUTES

28 U-S.C. § 12541) ......c.ccccccescsccsssvesccscccenssncsenseccenssensensceesens 2

2B U.S.C. § 1331 ......0......cccceccccsecnsecreccsessnsseacscsssscssnasscssnsensess l

28 U.S.C. § 1343 .........cccecccsccssccsscsscncseesssnsecssacsscsensecsssccenssess l

BZ USL. & 19GB ....nnccseccreecsscssasescasssoccescoscsrncsssnescnssonss L239

RULES

Fed. R.Civ.P. 12()(6).............scccccssscssssccecrccsssscsereseoossons i, 2,5

APPENDICES

Appendix A ...........cecceceseeseseseeeeneneesseeseseeneneeenenens A-1 to A-19

Appendix B ............cccscceseeseteeeeeeeseeseensneneeeesnesnennens B-1 to B-4

Appendix C ............eccsesceseseeseeeesenseseeessneneeneeneneenes C-1 to C-10

Appendix D............... A saiceidinibabasisaseeaasigiidabainccanaatdeiiatininae D-|

ill

te

a

Respondents Michael Klish, Bruce Johnson, Daniel

Skrabacz and Adran Phillips respectfully submit the

following Brief in Opposition to the Petition for Writ of

Certiorari:

—

OPINIONS BELOW

Each of the documents listed below is attached as a

separately identified appendix to this Response brief.

Opinion of the Hon. Judge Edward Nottingham of the

U.S. District Court for the District of Colorado, in the form

of a transcript of motion hearing, for Case No. 01-CV-1811,

Allen Oil & Gas, L.L.C. v. Klish, et.al., dated January 24,

2003, attached hereto as Appendix A. Final Judgment of the

U.S. District Court for the District of Colorado for Case No.

01-CV-1811, dated January 30, 2003, attached hereto as

Appendix B. Opinion of the U.S. Court of Appeals for the

Tent Circuit in Allen Oil & Gas, L.L.C. v. Klish, et.al., 113

Fed. Appx. 869 (10"" Cir. 2004), decided on October 26,

2004, attached hereto as Appendix C. Order of the U.S.

Court of Appeals for the Tenth Circuit denying AOG’s

petition for rehearing, dated December 29, 2004, attached

hereto as Appendix D.

JURISDICTION

Petitioner invoked the jurisdiction of the U.S. District

Court for the District of Colorado under 28 U.S.C. §§ 1331

and 1343 for claims brought under 42 U.S.C. § 1983. The

District Court below dismissed the Complaint on January 30,

2003, and Petitioners filed a timely notice of appeal on

February 27, 2003. The Tenth Circuit affirmed the judgment

of the District Court on October 26, 2004. Petitione’s

motion for reconsideration was denied on December 29,

2004. Petitioner filed its Petition for Writ of Certiorari on

March 28, 2005.

Jurisdiction to review the decision of the Tenth

Circuit Court of Appeals, affirming dismissal by the U.S.

District Court of AOG’s complaint, is appropriate under 28

U.S.C. § 1254(1).

CONSTITUTIONAL, STATUTORY,

AND OTHER PROVISIONS INVOLVED

Fed.R.Civ.P. 12(b)(6) provides:

Every defense, in law or fact, to a claim for relief in

any pleading, whether a claim, counterclaim, cross-claim, or

third-party claim, shall be asserted in the responsive pleading

thereto if one is required, except that the following defenses

may at the option of the pleader be made by motion ... (6)

failure to state a claim upon which relief can be granted... .

42 U.S.C. § 1983 provides, in relevant part:

Every person who, under color of any statute,

ordinance, regulation, custom, or usage, of any State or

Territory or the District of Columbia, subjects, or causes to

be subjected, any citizen of the United States or other person

within the jurisdiction thereof to the deprivation of any

rights, privileges, or immunities secured by the Constitution

and laws, shall be liable to the party injured in an action at

law, suit in equity, or other proper proceeding for redress,

except that in any action brought against a judicial officer for

an act or omission taken in such officer's judicial capacity,

injunctive relief shall not be granted unless a declaratory

decree was violated or declaratory relief was unavailable.

STATEMENT OF THE CASE

Petitioner AOG is a corporation with its principal

offices in Texas. AOG operated oil wells in the State of

POR SO Seip

Colorado subject to regulation by Colorado’s Oil & Gas

Conservation Commission (“COGCC”). In this action, AOG

sued Respondents under 42 U.S.C. § 1983. Respondents

were, at various times, four members of the seven member

COGCC. AOG alleged that the COGCC had deprived AOG

of its property without due process.

AOG filed its initial complaint in the District Court

for the Southern District of Texas, Houston Division.

Respondents filed a motion to dismiss on December 19,

2001, alleging lack of personal jurisdiction and lack of

subject matter jurisdiction. In their motion to dismiss in

Texas, Respondents argued that AOG’s complaint failed to

make allegations that any of the Respondents individually

participated in the alleged wrongdoing. The Texas District

Court did not address the personal participation argument,

but instead transferred AOG’s lawsuit to the U.S. District

Court for the District of Colorado.

Despite the arguments made by Respondents in

Texas, AOG did not re-plead in the District of Colorado to

include facts to show personal participation by the named

Respondents. Respondents filed a renewed motion to

dismiss AOG’s Complaint, alleging, among other things, that

AOG failed to allege personal participation by any named

Defendant. Following the renewed motion to dismiss, AOG

did not ask or attempt to amend its complaint to allege

personal participation.

The parties performed extensive written and

deposition discovery. Following discovery, Respondents

filed a motion for summary judgment and a supplement to

their motion to dismiss. As before, the motion for summary

judgment pointed out AOG’s failure to plead or provide

evidence to support personal participation by the named

Respondents. Respondents raised the defense of qualified

immunity in their supplemental motion to dismiss, and

argued that AOG had failed to allege personal participation

by the Respondents. On January 30, 2003, the District Court

for the District of Colorado dismissed AOG’s claims for

failure to allege personal participation, and further found that

Respondents were entitled to qualified immunity. The

District Court denied AOG leave to amend its complaint, as

AOG provided no facts or evidence to show how the

complaint could be effectively amended.

___The U.S. Court of Appeals for the Tenth Circuit

affirmed dismissal of the complaint because AOG failed to

allege personal participation by Respondents. The 10"

Circuit pointed out that AOG was on notice of Respondents’

personal participation arguments prior to transfer of this case

from the Southern District of Texas to the District of

Colorado. Despite such clear notice, AOG did not amend its

claims against Respondents after transfer from Texas to

Colorado, nor after the renewed motion to dismiss nor after

Respondents’ motion for summary judgment.

The 10" Circuit further confirmed that amendment

would be futile, noting that although the issue was raised

obliquely at the hearing on Defendant’s motion for summary

judgment, even then AOG did not inform the District Court

how it could cure defects in the Complaint.

REASONS FOR DENYING THE WRIT

I. There Is No Need For This Court To Exercise

Its Supervisory Authority In This Case.

A. Petitioner was not subjected to a

heightened pleading standard.

AOG was not subjected to a “heightened” pleading

standard in relation to allegations of personal participation in

its complaint. Instead, the U.S. District Court determined,

and the 10" Circuit affirmed, that allegations of personal

participation are required to state a claim under 42 U.S.C. §

1983. App. at A-10; App. at C-5. AOG concedes in its

4

LT enn TS

Petition that personal participation is a basic element of a §

1983 claim. Petition at p.9. Therefore, the U.S. District

Court, in requiring AOG to plead personal participation,

identified the minimum standard to be met for AOG to state

a claim under § 1983.

At the hearing on Respondents’ motion to dismiss, the

District Court determined that AOG’s complaint failed to

“mention any of the defendants by name, describe acts they

in particular participated in or otherwise imply that they

personally were liable for plaintiff's harm.” App. at A-11.

This was true despite the fact that AOG “had a full

opportunity for discovery... .” App. at A-18.

The District Court concluded as a matter of law that

“individual liability under § 1983 must be based on personal

involvement in the constitutional violation.” App. at A-10.

The District Court’s determination is supported by applicable

Tenth Circuit law. Bennett v. Passic, 545 F.2d 1260, 1262-

63 (10" Cir., 1976); Mitchell v. Maynard, 80 F.3d 1433,

1441 (10" Cir., 1996); see also, Rizzo v. Goode, 423 U.S.

362, 376 (1976) (supervisor status without personal

participation is not sufficient to support a claim under §

1983).

The District Court then applied Fed.R.Civ.P. 12(b)(6)

standards to its findings of fact, noting that dismissa! was

appropriate where, as here, plaintiff could not prevail and

amendment would be futile. App. at A-13. The District

Court dismissed AOG’s complaint because it failed to state a

claim on which relief could be granted, as there were no

allegations of personal participation by Respondents. Id. at

A-12 & 13.

AOG appealed to the Tenth Circuit. The 10" Circuit

affirmed, holding that the District Court applied the

appropriate standard under Rule 12(b)(6) to its findings of

fact. App. at C-3 & 4.

Apparently in recognition of the deficiency in its

complaint, AOG attempted to manufacture allegations of

personal participation, alleging that its complaint included

the contention that the Respondents were members of the

Commission at the time of the damaging order. See App. at

C-4 & 5. The 10" Circuit pointed out that this allegation by

AOG was not true. App. at C-5, fn 2.' The Tenth Circuit

then noted that AOG admitted that “three of the four

Respondents were not members of the Commission in 1999

when the wells were ordered plugged.” App. at C-9.

Contrary to AOG’s assertion in the Petition, neither of

the Courts below held AOG to a heightened pieading

standard. Instead, the Courts identified the minimum

standard necessary to state a claim under § 1983, and found

the complaint lacking. App. at C-6 (“Merely saying that it

has shown individual involvement on the part of each

defendant does not make it so). Those Courts’ decisions are

supported by applicable Tenth Circuit law. See, e.g.,

Bennett, 545 F.2d at 1262-63. Accordingly, this issue does

not require this Court to exercise its supervisory authority.

B. Petitioner failed to amend its

complaint despite numerous

opportunities, and in any event failed

to demonstrate how amendment could

cure defects in its complaint.

Respondent’s assertion that the U.S. District Court sua

sponte dismissed its complaint is untrue, as AOG was

provided with notice of the deficiencies in its complaint on

multiple occasions over a period of years, yet refused to

amend or re-plead to adequately state a claim under § 1983.

' AOG repeats its false personal participation allegation in

the Petition to this Court, stating that “... Respondents were

members of the Commission at the time the order in question

was entered... .” See Petition at 12.

6

NR ESS ORD AM

Instead, in its response to Respondents’ motion for summary

judgment, AOG requested, for the first time in the

proceedings, leave to re-plead if its complaint was lacking.

App. at C-8 to 10. Even then, AOG was unable to provide

the District Court with a single fact to indicate it could

remedy defects in its complaint. App. at C-10.

Ultimately, the District Court granted Respondents’

motion to dismiss based on failure to plead personal

participation and because Respondents were entitled to

qualified immunity.” On appeal, the Tenth Circuit reviewed

the history of the case, pointing out that Respondents noted

the lack of personal participation in three separate dispositive

motions dating from the inception of the lawsuit. App. at C-

8 to 10. The Tenth Circuit determined that under the

circumstances, it was not error to deny leave to amend. App.

at C-10.

Similarly, the Tenth Circuit analyzed the District

Court’s facts and analysis and determined that leave to

amend, had it been given, would have been futile, as AOG

could allege no facts in support of its claims for relief. App.

at C-10. Among other examples, the Tenth Circuit noted

that AOG did not dispute that three of the four Respondents

were not members of the COGCC in 1999, when the order

> The transcript indicates that the Court found that “personal

jurisdiction” was lacking. However, unis is likely an error in

transcription or an inadvertent misstatement by the Court, as

personal jurisdiction was not a disputed issue at that stage of

the proceedings. The Court likely meant to identify

“personal participation” as the crux issue, as the Court

immediately went on to discuss dismissal of the complaint

Jue to AOG’s failure to allege “personal participation” by

Respondents. App. at A-9.

> The Tenth Circuit did not address Petitioner’s qualified

immunity argument, as the Court affirmed dismissal under

Rule 12(b)(6) for failure to state a claim. App. at C-3 & 4.

7

for AOG’s wells to be plugged was issued. App. at C-9.

Ultimately, the Tenth Circuit affirmed the District Court’s

finding that leave to amend, if given, would have been futile.

App. at C-10.

Where, as here, a plaintiff has no ability to state a good

cause of action, dismissal is appropriate without affording an

opportunity to amend. Czosek v. O'Mara, 397 U.S. 25, 27-

28 (1970); Conley v. Gibson, 355 U.S. 41, 45-46 (1957).

Decisions by the courts below dismissing the case

without affording Petitioner further opportunity to amend are

supported in the record and under applicable law.

Accordingly, no issue exists that requires this Court’s

supervisory powers on review.

CONCLUSION

For the reasons and upon the authorities set forth

above, Respondents request that this Court deny the Petition

for Writ of Certiorari.

Respectfully submitted,

John W. Suthers

Attorney General

John J. Krause

Interim Solicitor General

Friedrick C. Haines

First Assistant Attorney General

William V. Allen*

Assistant Attorney General

1525 Sherman Street, Fifth Floor

Denver, Colorado 80203

Telephone: (303) 866-5240

* Counsel of Record

Attorneys for Respondents

APPENDIX A

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO

Civil Action No. O1-N-1811

ALLEN OIL & GAS, LLC,

Plaintuff,

VS.

MICHAEL KLISH, et al.,

Defendants.

REPORTER'S TRANSCRIPT MOTION HEARING

Proceedings before the HONORABLE EDWARD W.

NOTTINGHAM, Judge, United States District Court for the District of

Colorado, commencing at 4:17 p.m., on the 24th day of January, 2003, in

Courtroom 14, United States Courthouse, Denver, Colorado.

APPEARANCES

For the Plaintiff CLAUDE T. ALLEN, SR.

JOE McDERMOTT, ESQ.

Allen & Allen

301 Knipp

Houston, Texas

(APPEARING VIA VIDEO

CONFERENCE)

For the Defendants WILLIAM V. ALLEN, ESQ.

Colorado Attomey General's Office

1525 Sherman Street

Denver, Colorado

THERESE LINDBLOM, Official Reporter

901 19th Street. Denver, Colorado 80294

Proceedings Reported by Mechanical Stenography

Transcription Produced via Computer

A-|

PROCEEDINGS

THE COURT: Case No. 01-N-1811, Allen Oil &

Gas, a limited liability corporation v. Michael Klish, Bruce

Johnson, Daniel Skrabacz and Adrian Phillips.

I'll take the appearances of counsel, starting with

plaintiff's counsel.

MR. CLAUDE ALLEN: I'm Claude T. Allen, Sr.,

Your Honor.

MR. McDERMOTT: Judge my name is Joe

McDermott, M-c-D-E-R-M-O-T-T. | am not admitted 1n

Colorado, but I am admitted in the Southern District in the

Fifth and Eighth Circuits. With the Court's indulgence,

would like to be able to assist Mr Allen today.

THE COURT: Well, you won't be permitted to talk,

but you will be permitted to assist him.

You can't appear as an advocate in this court without

being admitted to this Court's bar. You may be seated.

aR ee a we

MR. WILLIAM ALLEN: William Allen on behalf

of all the defendants, Your Honor, in the state of Colorado.

THE COURT: This matter comes before the Court

this afternoon on the defendants’ renewed motion to dismiss

the Complaint and the defendants’ motion for summary

judgment with incorporated legal authority.

The Court has reviewed the Complaint and the

materials submitted by the parties and is of the view that oral

argument this afternoon would not materially assist the

Court in resolving this matter. Accordingly, the Court does

not intend to permit oral argument and will rule on the

papers.

This is a case alleging a violation of the plaintiff's

civil rights. The plaintiff alleges that the defendants,

Michael Klish, Bruce Johnson, Daniel Skrabacz, and

Adrian Phillips, individually, members of the Colorade Oil

and Gas Commission, stole the plaintiff's wells by plugging

certain oil and gas wells.

The defendants are members of the Board of the Oil

and Gas Conservation Commission of the State of

Colorado. They are residents and citizens of Colorado. The

Commission 1s the regulatory agency governing the

production of oil and gas in the state of Colorado.

By way of general factual background, as alleged in

the Amended Complaint, the plaintiff was the operator of |

oil leases located in a field referred to as the Tow Creek

Field in Routt County, Colorado.

In November of 1998, after there had been a number

of transactions between the parties -- that is to say, between

the plaintiff and the Oil and Gas Conservation Commission

-- the plaintiff received notice in the form of a

recommended order that certain wells located in the Tow

Creek Field did not comply with the Commission

regulations.

Thereafter, there were certain further proceedings.

In January of 1999, the Commission held a hearing

regarding the Tow Creek Field wells. At this time,

A-4

according to the Complaint, the oil prices were the lowest

in history.

According to the Commission, the Commission

forced plaintiff to shut down the alleged non-compliant

wells until the Commission continued on Mareh of 1999.

The hearing did continue in March of 1999, amd the revised

recommended order issued as a result of that hearing

included a recommendation to plug plaintiff's wells that had

been shut in during January, allegedly with ut sufficient or

any findings of fact.

At the end of this hearing, the Commission made

findings and entered an order directing -- directed to

plaintiff regarding the operation of the Tow Creek Field.

The Commission found that the plaintiff's operation

of certain main wells in that field was a violation of the

Commission regulations. The Commission ordered the

plaintiff's shut-in wells to be plugged, imposed a fine on the

plaintiff, and ordered plaintiff to post further bond with the

Commission in order to be allowed to continue operation of

A-5

wells in the Buck Peak Field, another field located in

Colorado, but evidently not the subject of the complaint

which was then before the Commission.

In May of 1999, plaintiffs sought to amend the

application -- excuse me, filed an application to amend the

Commission's March of 1999 order. The Commission set a

further hearing on that application for July 8, 1999, and

that was continued until August 19 and 20 of 1999.

After the August 1999 hearing, the Commission

declined to amend its prior order, directing that all of the

wells in the Tow Creek Field be plugged. Plaintiff alleges

that during the course of the 1999 hearing on August 19,

the evidence was well received by Commission Board

members. According to the plaintiff, however, on August

20, the hearing went much less well for the plaintiff, and it

was apparent to the plaintiff, at least, that the minds of

Commission Board members had been changed.

A-6

In October of 1999, according to the Complaint,

plaintiff filed for judicial review of the Commission's orders

in the Colorado State District Court. |

On -- in August of 2000, the plaintiff allegedly

drove by its Tow Creek Field and found the Commission

destroying its property, according to the Complaint. And

there is no specification of how the Commission was

destroying the property.

Thereafter, the Commission took action to plug wells

in another field operated by the plaintiff, the ones that I've

alluded to earlier, Buck Peak Field. The Commission set a

hearing for the plaintiff's Buck Peak Field matter for October

of 1999. The Commission -- the hearing was continued

until December of 1999. And according to the Complaint,

plaintiff did not receive a written notice of continuance of the

hearing, and therefore, did not appear at the December

hearing.

The Commission at that hearing found the operation

of the Buck Peak Field uneconomic. Accordingly, the

A-7

Commission ordered that the wells be plugged in that field

and fined the plaintiff.

The plaintiff's Complaint makes three claims. All of

them arise under Title 42 United States Code Section 1983.

The first is a claim that the defendants’ act deprived plaintiff

of due process of law under the Fifth and Fourteenth

Amendments by taking plaintiff's property without making

factual findings for all of the wells.

The second claim alleges that the defendants denied

plaintiff's due process rights by denying an impartial hearing

in the August of 1999 hearing.

And the third claim is a -- appears to be a substantive

due process claim for the defendants’ action in ordering the

Tow Creek wells plugged and abandoned.

The defendants first filed a motion to dismiss, and

thereafter they filed a motion for summary judgment. In the

supplement to the motion to dismiss, the defendants added

qualified immunity as a defense.

A-8

_

A iw Pe a Be

In their original motion to dismiss, they argue that a

second claim for relief is based on the actions of a person

other than defendants, namely, Rich Griebling, who was a

staff person with the Commission. Second, they argue that

the plaintiff's claim failed to allege personal participation by

any of the defendants.

I find the defendants’ arguments regarding personal

jurisdiction and qualified immunity to be dispositive of this

case. And, accordingly, I address only those issues and will

not need to address the issues presented by the motion for

summary judgment.

First, | address the question of personal participation

by the defendants.

This is a curious Complaint. The Complaint is

riddled with allegations concerning actions of the Oil and

Gas Commission, and it refers continuously and vaguely to

the Commission as having been the body doing the things of

which the Complaint complains.

< Oe R

It is curious, therefore, that the Commission, which

consists of seven members, is not sued in its official

capacity, or in any other capacity, and it is also curious that

only four of the seven members are sued.

The plaintiff has never explained this in the

Complaint or in any of its pleadings, and the Court does not

understand how personal participation can be alleged in these

circumstances.

The Court concludes as a matter of law that individual

liability under Section 1983 must be based on personal

involvement in the constitutional violation.

The plaintiffs contend that the defendants are the

members of the Commission who used their authority to

deprive plaintiff of its rights and that only the Commission

members whose acts violated the plaintiffs rights were sued.

Notably, the plaintiff makes a distinction between the

Commission members who violated plaintiff's rights and

those who did not. But nothing that the plaintiff has filed in

this court indicates how the plaintiffs came by this distinction

A-10

OO

or what the distinction might be. The plaintiff does not

mention defendants’ specific acts to constitute a violation of

the nights.

Plaintiff's argument seems to this court to boil down

to the proposition that the Commission committed acts that

violated the plaintiff's rights, but these defendants were

members of the Commission, and therefore, the defendants

personally participated in violating the plaintiff's rights.

Notably, however, that the entire Commission did not

participate in the violation of the plaintiff's rights dis --itself

disproofs this line of reasoning.

The Court finds the Complaint to be sorely lacking

concerning any allegations directly against the defendants

personally. The Complaint does not mention any of the

defendants by name, describe acts that they in particular

participated in or otherwise imply that they personally were

liable for plaintiff's harm.

In fact, as I have noted before, the Commission is

made up of seven members, only four of whom have been

A-|1

named as defendants. And the Complaint is completely

without information as to why this is the case.

I conclude, therefore, that the plaintiff's Complaint

fails to allege personal participation by these defendants.

This suit against defendants is 1n their individual capacity,

not in their official capacity. And so this is not, in effect, a

Complaint against the Oil and Gas Commission.

Accordingly, the plaintiff needs to allege more than

the fact that the defendants are members of the Commission

and that the Commission violated plaintiff's rights. It has not

done so.

There is some suggestion in the papers that the

piaintiffs should be given leave -- that the plaintiff should be

given leave to replead -- leave to replead on the ground that

it can correct the defects that the Court has seen 1n this

respect.

According to Tenth Circuit law, however, dismissal

under Rule 12 without affording plaintiff an opportunity to y

amend is appropriate when it is patently obvious that the

A-12

plaintiff cannot prevail under the alleged facts and allowing

plaintiff an opportunity to amend may be -- would be futile.

I note that the defendants made this same argument

against the plaintiff when the motion to dismiss was filed in

the Southern District of Texas before the case was transferred

to Colorado. Briefing on the motion was complete before

the case was transferred. Discovery is complete in the case,

and the dispositive motion deadline has passed without any

request by the plaintiff to amend the Complaint.

There is no indication that the plaintiff could amend

the Complaint to allege personal participation by the

defendants any more specifically than it has attempted to do

so in the current Complaint.

The Court finds that it is patently obvious that the

plaintiff cannot prevail under the alleged facts and that an

opportunity to amend would be futile. Accordingly, the

Court will grant the motion to dismiss with prejudice.

A second ground for granting the motion to dismiss 1s

the Doctrine of Qualified Immunity. The Doctrine of

A-13

Qualified Immunity shields government officials performing

discretionary functions from individual liability under

Section 1983, where their actions do not violate clearly

established statutory or constitutional nights of which a

reasonable person might have known.

Once a defendant puts in issue the question of

qualified immunity, the plaintiff bears the heavy burden of

demonstrating, first, that the defendants' alleged violation --

alleged actions violated a clearly established constitutional or

statutory right. And, second, that the constitutional or

statutory right was clearly established at the time of the

alleged violation.

The plaintiff must articulate with specificity the

clearly established constitutional or statutory right at issue. It

is insufficient simply to identify in the abstract a clearly

established right and then allege that the defendant has

violated it.

For a right to have been clearly established in this

circuit, the contours of the right must be sufficiently clear that

A-14

ee ee ee

aes

a reasonable official would understand that what he is doing

violates that right.

In the Tenth Circuit, ordinarily ... order for the law to

be clearly established, there must be a Supreme Court or

Tenth Circuit decision on point, or the clearly established

authority from other courts must have found the law to be as

the plaintiff maintains.

In the Tenth Circuit, determining qualified immunity

under these legal principles is a two-step process. First, the

Court must determine whether the plaintiff has met its

burden of coming forward with sufficient facts to show that

the defendants’ actions violated a federal constitutional or

statutory right.

Only when the plaintiff has done that will the Court

proceed to the second step, to determine whether the right

was Clearly established at the time of the alleged conduct.

I conclude in these circumstances that the plaintiff

has not met the first part of the test for qualified immunity,

because it has failed to come forward with sufficient facts to

A-15

show that the defendants violated a federal constitutional

right.

The plaintiff's Complaint does intone the verbal

talismans of due process and violation of the Fourth and

idtelvs

Fifth -- Fourteenth and Fifth Amendment, but it is devoid of

specific allegations of fact, particularly with regard to the

actions of these defendants, as opposed to the actions of the

Commission as a whole.

As I have already noted, the Complaint does not

even mention any of the defendants by name, except in the

caption of the Complaint. It is devoid of specific allegations

of fact, particularly with regard to the actions of the

Complaint -- the defendants, as opposed to the Commission

as a whole.

As I have already noted, it is particularly notable, in

light of the fact that plaintiff chose to proceed only against

certain Commission members, that it is not violating --

alleging a violation of clearly established rights.

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The defendants, having moved to dismiss on the

basis of qualified immunity, the plaintiff is obliged to come

forward with additional allegations showing that each

defendant violated clearly established law. Even in the

response to the supplement to the motion to dismiss,

plaintiff argues that it meets the first step by noting that it

alleges that the defendants violated its constitutional rights,

specifically that the acts of the defendant violated its due

process rights to notice and an opportunity to be heard, its

due process right to be heard by an impartial tribunal, and its

substantive due process right to possession of its property

without interference with that right under color of law.

This is simply lacking under Tenth Circuit case law in

sufficient detail to meet the pleading standards in this

circuit. All that the plaintiff has done is to allege in the

abstract the violation of a constitutional right, without

alleging why that right is applicable or without alleging that

each defendant has participated in the violation.

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The Court concludes that the plaintiff's Complaint in

this case must be dismissed with prejudice. The plaintiff's

response to the defendants' supplement, which raised the

qualified immunity defense, was filed in this case after

discovery was complete and after the dispositive motion

deadline had passed.

Even the plaintiff's response, having had a full

opportunity for discovery, fails to make specific allegations

regarding the defendants' actions.

The plaintiff could have chosen to amend the

Complaiit or to seek to amend the Complaint. There is a

request in the response to the motion to dismiss to replead if

the Court finds that the Complaint is lacking. There is no

indication, however, that the plaintiff has any further

evidence which would support the allegations which it is

making.

As the defendant points out as well, the plaintiff was

present at the hearings where the alleged improper actions

took place, and therefore was in possession of all the

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necessary facts. At this point in the case, if plaintiff has not

made sufficient allegations, it is reasonable to conclude that

it cannot do so.

On the basis of those findings of fact and conclusions

of law, the Court grants the motion to dismiss and dismisses

the plaintiff's Complaint with prejudice.

The defendants' motion for summary judgment is

denied as moot.

The defendants, if they wish, may have their costs

upon the filing of a bill of costs within 11 days from today's

date.

That concludes this matter.

Counsel are excused. The video conference is ended.

(Hearing concluded at 4:38 p.m.)

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EE EE OY

PE TE

APPENDIX B

IN THE UNITED STATES DISTRICT COURT FOR

THE DISTRICT OF COLORADO

JUDGE EDWARD W. NOTTINGHAM

Civil Action No. 01-N-1811 (MJW)

ALLEN OIL & GAS, LLC

Plaintiff,

v.

MICHAEL KLISH,

BRUCE JOHNSON,

DANIEL SKRABACA, and

ADRAN PHILLIPS, Individually,

Defendants,

FINAL JUDGMENT

In accordance with orders filed during the pendency

of this case, and pursuant to Fed. R. Civ. P. 58(2), the

following FINAL JUDGMENT is hereby entered.

1. Pursuant to the findings of fact and

conclusions of law entered orally in open

court by Judge Edward W. Nottingham on

January 24, 2003:

a. Defendant’s Motion to Dismiss

Complaint (#8), filed December 19,

2001, is GRANTED.

b. Defendants’ motiot. for summary

judgment (#31), filed June 28,2002, is

DENIED as MOOT.

c. Judgment is entered in favor of

Defendants Michael Klish, Bruce

Johnson, Daniel Skrabacz, and Adran

Phillips and against Plaintiff Allen O1l

& Gas, LLC, and Plaintiff's

Complaint and this action are

DISMISSED with prejudice.

6. Defendants shall have their costs

upon the proper filing of a Bill of

Costs within eleven days of

January 24, 2003, the date of the

court’s order.

Dated this 30" day of January, 2003.

B-2

APPROVED BY THE ENTERED FOR THE

COURT: COURT:

JAMES R. MANSPEAKER,

CLERK

EDWARD W. By

NOTTINGHAM Stephen P. Ehrlich

United Stated District Judge Chief Deputy Clerk

IN THE UNITED STATES DISTRICT COURT FOR

THE DISTRICT OF COLORADO

CERTIFICATE OF SERVICE

I hereby certify that a copy of the Final Judgment

signed by Judge Edward W. Nottingham on January 30,

2003 was served on January 30, 2003 by hand-delivery,

where a “D.C.” box number or asterisk (*) is indicated after

the recipient’s name, by electronic mail to the address

specified where a double asterisk (**) is indicated after the

recipient’s name, or otherwise by depositing it in the United

States mail, postage prepaid, addressed to the recipient:

Magistrate Judge Michael J Claude T. Allen, Sr.,

Watanabe* Esq.

Allen & Allen

301 Knipp

Houston, TX 77024

Attorney for Plaintiff

William V. Allen, Esq.

Assistant Attorney General

Litigation Section

D.C. Box No. 20

Attorney for Defendants

JAMES R. MANSPEAKER, CLERK

By

Deputy Clerk

APPENDIX C

UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

ALLEN OIL & GAS, LLC,

Plaintiff-Appellant,

v.

No. 03-1082

MICHAEL KLISH; (D.C. No. 01-N-1811)

BRUCE JOHNSON; (D. Colo.)

DANIEL SKRABACZ;

ADRAN PHILLIPS,

Defendants-Appellees.

ORDER AND JUDGMENT'

Before McCONNELL, HOLLOWAY, and

PORFILIO, Circuit Judges.

After examining the briefs and appellate record, this

panel has determined unanimously to grant the parties’

' This order and judgment is not binding precedent, except under the

doctrines of law of the case, res judicata, and collateral estoppel. The

court generally disfavors the citation of orders and judgments;

nevertheless, an order and judgment may be cited under the terms and

conditions of 20" Cir. R. 36.3.

request for a decision on the briefs without oral argument.

See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is

therefore ordered submitted without oral argument. Plaintiff

Allen Oil & Gas, LLC, appeals the judgment of the district

court dismissing its § 1983 complaint for failure to state a

claim upon which relief can be granted under Fed. R. Civ. P.

12(b)(6) and further refusing to grant plaintiff leave to

amend its complaint. We exercise jurisdiction pursuant to 28

U.S.C. § 1332 and affirm.

Plaintiff was the operator of oil leases located in

Routt County, C olorado. In the complaint, defendants are

identified as members of the board of the Colorado Oil and

Gas Conservation Commission (Commission). Plaintiff

brought suit under 42 U.S.C. § 1983 alleging that

defendants affected a taking of its property without due

process in derogation of the Fifth Amendment when the

Commission ordered some of plaintiff's wells plugged.

Specifically, plaintiff alleged, inter alia, that defendants

denied it the opportunity for a hearing before an impartial :

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tribunal, prevented it from complying with Commission

regulations, and continued a hearing without written notice

to plaintiff.

In ruling on defendants’ renewed motion to dismiss

the complaint, the district court held that because plaintiff

failed to allege any personal participation by defendants in

the allegedly illegal acts, its complaint was subject to

dismissal under Rule 12(b)(6). Because the court found it

"patently obvious that the plaintiff cannot prevail under the

alleged facts," Aplt. App. at 164, it further denied leave to

amend the complaint. Alternatively, the court held that

defendants were shielded by qualified immunity.

Plaintiff takes issue with all three of these

conclusions. We need not address the qualified

immunity issue, however, because we find no error in the

dismissal for failure to state a claim and in the refusal

to allow amendment.

This court reviews de novo the

district court's dismissal under Rule

12(b)(6) for failure to state a claim.

We accept as true all well-pleaded

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facts, as distinguished from

conclusory allegations, and view

those facts in the light most favorable

to the nonmoving party. The district

court's dismissal pursuant to Rule

12(b)(6) will be upheld only if it

appears beyond doubt that the plaintiff

can prove no set of facts in support of

his claim which would entitle him to

relief.

Maher v. Durango Metals, Inc., 144 F.3d 1302, 1304

(10th Cir. 1998) (citations and quotation omitted).

In order to state a claim for relief under § 1983,

plaintiff must show an affirmative link between

defendants’ conduct and the alleged constitutional

violation. Stidham v. Peace Officer Standards &

Training, 265 F.3d 1144, 1156-57 (10th Cir. 2001).

Here, the complaint makes no link between these

individual defendants and the acts complained of. The

complaint identifies defendants as members of the

Commission, Aplt. App. at 8, but does not identify them

as members of the Commission during the relevant time

C-4

period.” The complaint does not allege how any or all of

the defendants voted on matters concerning the wells.

The complaint does claim that activities of a particular

employee of the Commission injured plaintiff, but that

individual is not named as a defendant. Further, there is

no allegation that any of the defendants personally

considered the allegedly improper intervention of this

employee or allowed it to influence them.

In its opening brief, plaintiff correctly cites the law

requiring personal participation in this type of suit but

fails to ultimately show that defendants were directly

involved in the acts that resulted in the claimed deprivation

of rights. Merely saying that it has shown individual

involvement on the part of each defendant does not make it

so. See Aplt. Br. at 17-18.

: The statement in plaintiff's opening brief that the complaint alleged

defendants were members of the Commission is inaccurate. See Apt.

Br.At 16.

C-5

Plaintiff also correctly points to various theories of

recovery which would state a claim for relief had the correct

defendants been named or had these defendants been

affirmatively linked to the alleged harm that befell plaintiff.

Without the personal participation by each defendant,

however, plaintiff's theories are of no avail. Plaintiff cites

Barrett v. Tallon, 30 F.3d 1296, 1299 (10th Cir. 1994), for

the proposition that even if the factual allegations made in a

complaint fail to support the legal theory underlying the

plaintiff's case, dismissal is inappropriate. In Barrett, this

court reversed a dismissal under Rule 12(b)({6) because,

while the plaintiffs failed to state a RICO claim, they had

adequately pleaded claims of "garden variety" fraud and

conversion. There is no indication in Barrett, however, that

the plaintiffs either failed to name the correct defendants

or failed to allege personal participation by them.

Plaintiff's citation to Stidham, 265 F.3d 1144, is

similarly unavailing. In Stidham, one of the defendants,

the director of Utah's Peace Officer Standards and

C-6

Training Division, argued that the claims against him

must be dismissed because the plaintiff had failed to

allege an affirmative link between his conduct and any

constitutional violation. This court clarified that such a

link is required to be alleged in the complaint as well as

proven at trial. /d. at 1157. We refused to affirm the

dismissal of the complaint against the director, however,

because the plaintiff had sufficiently alleged

wrongdoing on the part of the defendants as a group and

had defined the director as part of that group. /d.

Although not part of the published opinion in

Stidham, the complaint there clearly alleged that the

defendant director was the director at the time of the acts

complained of.’ The complaint in the case at bar does not

make a similar allegation as to the named defendants and

therefore does not state a claim upon which relief can be

granted.

* We have ascertained this fact by taking judicial notice of the appellate

record in Stidham which is still on file in this court.

C-7

Finally, plaintiff argues that the district court

erred in refusing to grant it leave to amend the

complaint. In declining to grant leave to amend, the

district court began by noting that defendants hax

pointed out plaintiff's failure to allege personal

participation when they filed their motion to dismiss in

the Southern District of Texas. Briefing on that motion

was complete before the case was transferred to

Colorado. We also note that defendants made the same

argument in their renewed motion to dismiss filed in the

district court on December 19, 2001. At the time of the

district court's ruling here, January 24, 2003, discovery

in the case was complete and the deadline for filing

dispositive motions had passed without any request from

plaintiif to amend the complaint. The district court

concluded that "it is patently obvious that the plaintiff

cannot prevail under the alleged facts and that an

opportunity to amend would be futile." Aplt. App. at

C-8

164. We review this conclusion de novo. Watson ex rel.

Watson v. Beckel, 242 F.3d 1237, 1239 (10th Cir. 2001).

We have reviewed the pleadings on file in this case

and the other materials of record and agree that granting

leave to amend would be futile. As noted above, plaintiff

does not allege any personal participation by any of the

defendants in its alleged injury. Plaintiff does not dispute

that three of the four defendants were not members of the

Commission in March 1999 when the wells were ordered

plugged. Despite being on notice that defendants would

raise the issue of lack of personal participation, plaintiff did

not request leave to amend its complaint until the district

court was prepared to rule on defendants' renewed motion to

dismiss. Even then, the district court found the request to be

rather opaque: "There is some suggestion in the papers that

the plaintiff should be given leave . . . to replead." Aplt.

App. at 163. Further, plaintiff does not indicate in its filings

in this court how it would amend the complaint to cure the

noted defect. Under these circumstances, we find no error in

C-9

the refusal of the district court to grant leave to amend.

The judgment of the district court is AFFIRMED.

Entered for the Court

Michael W. McConnell

Circuit Judge

C-10

APPENDIX D

UNITED STATES COURT OF APPEALS FOR THE

TENTH CIRCUIT

ALLEN OIL & GAS, LLC

Plaintiff — Appellant,

v. No. 03-1082

MICHEAL KLISH; BRUCE

JOHNSON; DANIEL

SKRABACA; ADRAN

PHILLIPS,

Defendants - Appellees

ORDER

Filed December 29, 2005

Before McCONNELL, HOLLOWAY and PORFILIO,

Circuit Judges.

Appellant’s petition for rehearing is denied.

Entered for the Court

PATRICK FISHER, Clerk of Court

By:

Deputy Clerk

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