# Petition for Writ of Certiorari — City of Garland, Texas v. Dearmore (No. 07-1527)

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 2008

## Text

si Suprgms 60 US.
6 071527 JUN 5- 2008
No. (1) GFACE OF THE OLERK

Jn Whe
Supreme Court of the Anited States

CITY OF GARLAND, TEXAS,
Petitioner,
v.

ROY DEARMORE, et al.,
Respondents.

On Petition for Writ of Certiorart to the United
States Court of Appeals for the Fifth Circuit

PETITION FOR WRIT OF CERTIORARI

Mark E. DEMPSEY R. BRADFORD NEIGHBOR
Sr. Asst. City ATTORNEY City ATTORNEY

Counsel of Record
WILLIAM F’. GLAZER MICHAEL J. BETZ
Sr. Asst. City ATTORNEY Sr. Asst. Ciry ATTORNEY

CitTy OF GARLAND, TEXAS

P.O. Box 469002

GARLAND, TEXAS 75046-9002
(972) 205-2380

Attorneys for Petitioner

June 2008

Becker Gallagher - Cincinnau, OH - Washington, D.C. - 800.890.5001

i

QUESTION PRESENTED

This case presents the question expressly reserved
by this Court in Sole v. Wyner, __ U.S. __ (2007) —
whether a party who obtains a preliminary injunction
in the absence of a final decision on the merits of a
claim for permanent injunctive relief is entitled to
prevailing party status so as to permit the award of
attorney’s fees under federal fee shifting statutes. It
is a question that has split and indeed confounded the
circuit courts. In this case, the Fifth Circuit held that
the fleeting modicum of victory represented by a
subsequently mooted preliminary injunction is
sufficient. The Fourth and Eighth circuits disagree,
relying on this Court’s disavowal of the “catalyst
theory” in Buckhannon Board & Care Home v. West
Virginia Dept. of Health, 532 U.S. 598 (2001) as
authority for their positions. Still other circuit courts
answer the question either “yes” or “sometimes” (or
both “yes” and “no”) based upon differing tests devised
by those circuits, none of which is entirely consistent
with the tests created by the other circuits.

li

PARTIES TO THE PROCEEDING
AND RULE 29.6 STATEMENT

Petitioner, the City of Garland, Texas (the “City”)
is a home-rule municipality created under the
constitution and laws of the State of Texas, thus Rule
29.6 does not apply.

Respondents, Roy Dearmore, A.C. Blair, and Marie
Combs, (collectively, “Dearmore”) were plaintiffs in the
district court and appellees in the court of appeals.
Dearmore and the others filed suit individually and as
putative representatives of a purported class -of
property owners, property managers, and tenants. No
such class or classes were ever certified by the district
court, and no appeal was taken from that ruling, so the
Respondents are in this Court as individuals only.

ill

TABLE OF CONTENTS

QUESTION PRESENTED .................... 1
PARTIES TO THE PROCEEDING AND RULE
SOO ee NE 95 vu Se eee bee tawees li
yp RPE etl. yy 3. 9 rea ill
TABLE OF CITED AUTHORITIES ........ Lae
Ce ee UR hae eb ees Sew eda es 1
EPS 9 50s 5 06 be se OS OO aS 1
STATUTORY PROVISIONS INVOLVED IN THE
RI cosh week a ee ale rh ino aa arated oats 1
PRELIMINARY 2g 44 | y a area 2
STATEMENT OF THE CASE ................ 3

REASONS FOR GRANTING THE PETITION ... 6

A. The Circuit Courts of Appeal Are in Conflict
Whether a Preliminary Injunction
Constitutes “Relief on the Merits” to Permit
“Prevailing Party” Status under Federal Fee
ee er re errs eee 6

1. The Court of Appeals for the Fourth
Circuit has completely rejected —
preliminary injunctive relief as the basis
for awarding attorney’s fees under
federal fee shifting statutes. .......... 7

1V

2. The Court of Appeals for the Fifth
Circuit has held that preliminary
injunctive relief, without relief on the
merits, is sufficient to establish
prevailing party status under federal fee
ETE PEIN. 55 on As see bs 10

3. Treatment of this issue by the other
circuit courts of appeals is equally
SI oo cee eae eee 11

B. The Courts That Have Held Success on a
Preliminary Injunction Alone to be Sufficient
to Make the Recipient of the Injunction a
Prevailing Party Have Resurrected the
“Catalyst Theory” Abandoned by this Court

SO er a oe eto! 16
Ie 300 or ee les 19
APPENDIX

Appendix A: March 10, 2008 Fifth Circuit
Opinion and Judgment .................. la

Appendix B: September 6, 2006 District Court
Agreed Order Concerning Attorney’s Fees .. 22a

Appendix C: August 29, 2006 District Court
Memorandum Opinion and Order ......... 24a

Appendix D: November 30, 2005 District Court
Coreen iw ek ack cee 42a

Vv

Appendix E: November 3, 2005 District Court
Memorandum Opinion and Order and
Promammery Insmetaem «. . we ee ees 48a

Appendix F: June 28, 2005 District Court
Memorandum Opinion and Order ........ 73a

vl
TABLE OF CITED AUTHORITIES
CASES

Advantage Media, L.L.C. v. City of Hopkins,
379 F. Supp. 2d 1030 (D. Minn. 2005) ...... 12

Advantage Media, L.L.C. v. City of Hopkins,
511 F.3d 833 (8th Cir. 2008), cert. denied,
eae Wa FO WPA SOUT ovcivercvss MW

Ashcroft v. American Civil Liberties Union,
ee APE, 6, oo 6 6s Wide o sb vee as 6 ewe 16

Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep’t
of Health & Human Res.,
BRR re passim

Dearmore, et al. v. City of Garland,
400 F. Supp. 2d 894 (N.D. Tex. 2005) ........ 1

Dearmore, et al. v. City of Garland,
237 © .R.D. 673 GND. Tex. 2006) ............ 1

Dearmore v. City of Garland,
519 F.3d 517 (Sth Cir. 2008) ........... passim

Haley v. Patacki,
106 F.3d 478 (2d Cir. 1997) ............ 15, 16

Hewitt v. Helms,
482 U.S. 755, 107 S.Ct. 2672 (1987) ........ 16

LaRouche v. Kezer,
ae ee Oe Ce Se. TE) nn ng ce ieee 16

vii

Select Milk Producers, Inc. v. Johanns,
400 F.3d 939 (D.C. Cir. 2005) ....... 13, 14, 20

Smyth ex rel. Smyth v. Rivero,
282 F.3d 268 (4th Cir. 2002), cert. denied,
Dae Ge PAI? 6 ive ei eee cect anes 7, 8,9

Sole v. Wyner,
sh aE oe eae a i
Texas State Teacher’s Assn. v. Garland
Independent School Dist.,
Ue Se PUT gone ove ees ev baween 18

University of Texas v. Camenisch,
OE i CRON) 65 bos esc eee vanavweds 11

Watson v. County of Riverside,
300 F.3d 1092 (9th Cir. 2002), cert. denied,

ey es MUG 6 eS ee esses wees 12,13
STATUTES
OP AO ef ern ee err rr 1
ee Re I CRs ed hae ee oe eee 3
ke 2 | reer 1,7, 39

GES oA | Seer eres ge rt 2

Vill
RULES
Fee: B. Go, FOOS, A) as ci do whe bies dene 4

ee Ss es BOD a Ka 459 es ee eed ee 1

1
OPINIONS BELOW

The opinion of the United States Court of Appeals
for the Fifth Circuit (Pet. App. A) is published at 519
F.3d 517 (5th Cir. 2008). The order of the district
court (Pet. App. E) granting Dearmore a preliminary
injunction is reported at 400 F. Supp. 2d 894 (N.D.
Tex. 2005). The order of the district court dismissing
Dearmore’s suit as moot, but nonetheless finding
Respondents to be prevailing parties is unreported.
(Pet. App. D). The district court’s order denying the
City’s motion to amend that holding is reported at 237
F.R.D. 573 (N.D. Tex. 2006). (Pet. App. C).

JURISDICTION

The judgment of the United States Court of
Appeals for the Fifth Circuit was entered on March 10,
2008. Pursuant to Supreme Court Rule 13.1, this
petition has been filed within 90 days of that
judgment. The jurisdiction of this Court is invoked
pursuant to 28 U.S.C. § 1254 (1).

STATUTORY PROVISIONS
INVOLVED IN THE CASE

The relevant portion of 42 U.S.C. § 1988 provides:

In any action or proceeding to enforce a
provision of sections 1981, 198la, 1982, 1983,
1985, and 1986 of this title, title [IX of Public
Law 92-318 [20 U.S.C.A. § 1681 et seq.], the
Religious Freedom Restoration Act of 1993 (42
U.S.C.A. § 2000bb et seq.|, the Religious Land
Use and Institutionalized Persons Act of 2000

2

[42 U.S.C.A. § 2000cc et seq.], title VI of the
Civil Rights Act of 1964 [42 U.S.C.A. § 2000d et
seq.], or section 13981 of this title, the court, in
its discretion, may allow the prevailing party,
other than the United States, a reasonable
attorney’s fee as part of the costs, except that in
any action brought against a judicial officer for
an act or omission taken in such officer’s
judicial capacity such officer shall not be held
liable for any costs, including attorney’s fees,
unless such action was clearly in excess of such
officer’s jurisdiction.

42 U.S.C. § 1988(b)

PREEIMINARY STATEMENT

Dearmore filed a civil action against the City
challenging an ordinance passed by the Garland City
Council that imposed certain minimum housing
standards on single family and multifamily residential
rental properties. The ordinance further required
inspections of those residences to ensure compliance
with the minimum housing standards. The district
court dismissed most of Dearmore’s claims related to
the minimum housing standards. At the same time -
but without notice to the parties or a preliminary
injunction hearing - the district court granted a
preliminary injunction against the City on the sole
remaining issue, a provision relating to a residential
rental inspection program created by the ordinance.
The district court enjoined that provision because,
according to the district court, it could imagine
hypothetical circumstances in which that provision
could be enforced in a manner contrary to the

3

restraints of the Fourth Amendment. Inasmuch as the
City did not intend to implement the inspection
program in the manner hypothesized by the district
court, the City Council amended the ordinance to
address the district court’s stated concerns.
Thereafter, the case was dismissed as moot. However,
in the order dismissing the case, the district court
determined that, based on the preliminary injunction,
Dearmore was a “prevailing party.” The district court
then awarded Dearmore attorney’s fees and costs. The
City appealed that determination and the award of
attorney’s fees. The Fifth Circuit Court of Appeals
affirmed. Dearmore v. City of Garland, 519 F.3d 517
(5th Cir. 2008).

STATEMENT OF THE CASE

On June 16, 2005, Dearmore filed an original
complaint under 42 U.S.C. § 1983 requesting
temporary, preliminary, and permanent injunctive
relief challenging Garland Ordinance No. 5895
relating to the maintenance of rental properties within
the City. The complaint alleged that various minimum
housing standards made applicable by the ordinance
to residential rental property, such as requiring
working air conditioners and window screens for
windows, and ensuring that windows could be opened
and used as an exit in the event of a fire, lacked a
rational basis and were, therefore, unconstitutional.
Dearmore also alleged that the ordinance permitted
the warrantless searches of rental units in
contravention of the Fourth Amendment of the United
States Constitution. Contemporaneously with the
filing of the original complaint, Dearmore filed a
motion for a temporary restraining order, seeking to

4

enjoin the City from enforcing the ordinance on Fourth
and Fifth Amendment grounds.

The district court considered the motion for
temporary restraining order and issued a
Memorandum Opinion and Order denying the motion.
(Pet. App. F). Dearmore then filed an amended motion
for temporary restraining order and a motion to
reconsider the district court’s denial of the previous
motion. Alternatively, Dearmore requested an
expedited hearing on his request for a preliminary
injunction. The motion did not request the district
court to issue a preliminary injunction at that time,
but rather, only asked the district court to either issue
a temporary restraining order, or alternatively,
establish an expedited schedule for discovery and a
hearing on a preliminary injunction. The district court
set the motion for a hearing on July 7, 2005.

The day before that hearing, the City filed a motion
to dismiss, seeking to dismiss Dearmore’s claims
pursuant to Federal Rule of Civil Procedure 12(b)(6).
On July 7, 2005, the district court held a hearing on
Dearmore’s motion, after which it issued an order
requiring Dearmore to file a response to the City’s
motion to dismiss by July 13, 2005. In apparent
response to what transpired at the hearing and the
City’s motion to dismiss, Dearmore amended his
pleadings, abandoning a number of his claims.

On November 3, 2005, without conducting any
other hearings and with no other notice relating to its
intentions regarding Dearmore’s request for a hearing
on a preliminary injunction, the district court issued a
Memorandum Opinion and Order and Preliminary

5

Injunction. (Pet. App. E). In that order, the district
court granted, for the most part, the City’s motion to
dismiss. In addition, though, the district court issued
a preliminary injunction enjoining the City from
enforcing an isolated provision of the challenged
ordinance relating toa non-resident owner’s consent to
inspection of unoccupied single family rental
properties. The order continued the preliminary
injunction until a trial could be conducted on the
merits. The order dismissed all of Deamore’s
remaining claims except the provision enjoined. On
the same date, the district court issued a scheduling
order setting the case for trial on October 2, 2006, and
setting a schedule for discovery and other pre-trial
preparations.

On November 15, 2005, the Garland City Council
amended the ordinance to change the provision called
into question by the district court, that is, the portion
of the ordinance related to a non-resident owner’s
consent to inspection of single family rental properties.
Because the only issue remaining in the case involved
the provision of the ordinance changed by the
amendment, the City immediately notified the district
court that the ordinance had been amended, and
moved to dismiss the case as moot. Dearmore did not
oppose the City’s request to dismiss the case as moot.

On November 30, 2005, the district court granted
the City’s motion to dismiss as moot. (Pet. App. D).
The order granting the motion, however, found that
Dearmore was a “prevailing party” because he had
obtained a_ preliminary’ injunction. In the
accompanying judgment, the district court dismissed
the action with prejudice, taxed costs against the City,

6

and purported to dissolve the injunction — which the
district court noted had not become effective in any
event (Pet. App. D).’

On December 12, 2005, the City filed a motion to
amend, requesting that the district court amend the
judgment to reflect that Dearmore was not a
prevailing party in the litigation and asking the court
to re-tax costs against the party incurring same. On
August 29, 2006, the district court denied the motion
to amend the judgment. (Pet. App. C). On September
6, 2006, following stipulation by the parties as to the
amount of fees only, the district court awarded
attorney’s fees to Dearmore. (Pet. App. B). The City
timely appealed. The Fifth Circuit Court of Appeals
affirmed.

REASONS FOR GRANTING THE PETITION

A. The Circuit Courts of Appeal Are in Conflict
Whether a Preliminary Injunction
Constitutes “Relief on the Merits” to Permit

“Prevailing Party” Status under Federal Fee
Shifting Statutes.

The circuit courts of appeal are in disagreement as
to whether a party who obtains only preliminary
injunctive relief is a prevailing party for purposes of an

' The district court noted in both the order granting the City’s
motion to dismiss as moot, and the accompanying judgment, that
the injunction had never become effective “because Plaintiff
Dearmore never posted the bond as ordered by the Court.” (Pet.
App. D at 44a, 46a).

7

award of attorney’s fees under federal fee-shifting
statutes. The Fourth Circuit Court of Appeals in
Smyth ex rel. Smyth v. Rivero, 282 F.3d 268, 277 (4th
Cir. 2002), cert. denied 537 U.S. 825 (2002), held that
a preliminary injunction can never form the basis of
prevailing party status to support an award for
attorney’s fees. In sharp contrast, the Fifth Circuit
Court of Appeals in this case held that such
preliminary relief is sufficient to afford prevailing
party status. Dearmore v. City of Garland, 519 F.3d
517, 524 (5th Cir. 2008). Other circuits have likewise
breathed new life into the “catalyst theory” rejected by
this Court in Buckhannon Bd. Care Home, Inc. v. W.
Va. Dep’t of Health & Human Res. , 532 U.S. 598 (2001)
by devising various tests (that differ from circuit to
circuit) to find that preliminary injunctive relief may,
under some circumstances, form the basis for
prevailing party status.

1. The Court of Appeals for the Fourth
Circuit has completely rejected
preliminary injunctive relief as the basis
for awarding attorney’s fees under federal
fee shifting statutes.

In Smyth, the court of appeals held that a
preliminary injunction could not meet the prerequisite
for prevailing party status under 42 U.S.C. § 1988.
Smyth, 282 F.3d at 277. The court explained that
“(t]he preliminary injunction inquiry, because of the
preliminary, incomplete examination of the merits
involved and the incorporation (if not the
predominance) of equitable factors, is ill-suited to
guide the prevailing party determination regardless of
how it is formulated.” Jd. at p. 277, n.8.

8

Smyth involved recipients of the Aid to Families
with Dependent Children (AFDC) program who
challenged a new policy requiring an applicant to
identify the father of the child for whom benefits were
sought, or to list the first and last names of all
individuals who might be the father. Id. at 271. Some
of the applicants for AFDC benefits were unable to
identify the fathers of their children, and as a result of
the deemed inability to “cooperate,” their benefits
under the AFDC program were reduced or eliminated.
Id. The district court entered a preliminary injunction
barring the State from enforcing the policy against the
plaintiffs. Jd. at 272. Thereafter, the federal
government changed its regulation by relaxing the
standard for obtaining a waiver of the identification
requirement and modifying its policy to make
identification of the fathers prospective only. Jd. at
273. Asa result of the government’s changes to the

policy, the district court dismissed plaintiffs’ claims as
moot. Id. at 273.

Plaintiffs filed a motion for attorney’s fees and
costs, which was granted. 7d. The district court found
that because the plaintiffs obtained a preliminary
injunction, they had prevailed, and were entitled to
attorney's fees. Id. The district court awarded the
plaintiff nearly $200,000 in fees, and the State
appealed the award of fees. Id.

The Court of Appeals for the Fourth Circuit found
that “[w]hile granting such an injunction does involve
an inquiry into the merits of a party’s claim, ... the
merits inquiry in the preliminary injunction context is
necessarily abbreviated.” Jd. at 276. Examining the
standard for granting a preliminary injunction, the

9

court explained that a party is not required to succeed
on the merits of their claim at that stage. “The fact
that a preliminary injunction is granted in a given
circumstance, then, by no means represents a
determination that the claim in question will or ought
to succeed ultimately; that determination is to be made
upon the ‘deliberate investigation’ that follows the
granting of the preliminary injunction.” /d. at 276.

The Fourth Circuit noted that to prevail at the
preliminary injunction stage, a plaintiff must only
demonstrate a strong showing or a substantial
likelihood of success by clear and convincing evidence
to obtain relief. Jd. at 276. In addition, in the
preliminary injunction context, the court is required to
weigh other factors in addition to the merits inquiry,
that is, irreparable harm to the plaintiff, public policy
considerations, and the balance of harm to plaintiff
weighed against harm to the defendant. Jd. at 276-
277. The Fourth Circuit observed that the “interplay
of these equitable and legal considerations and the less
stringent assessment of the merits of claims that are
part of the preliminary injunction context belie the
assertion that the district court’s decision to grant a
preliminary injunction was an ‘enforceable judgment{]
on the merits’ or something akin to one for prevailing
party purposes.” Id. at 277, citing Buckhannon, 532
U.S. at 604, and therefore disallowed an award of
attorney’s fees to the plaintiffs.

Thus, the “ourth Circuit, recognizing the limited
nature of review and other considerations inherent in
a decision to grant a preliminary injunction, correctly
found that such a decision is not a decision on the
merits within the meaning of Buckhannon and does

10

not confer prevailing party status. In contrast, the
Fifth Circuit’s decision in the instant case, with which
other circuit courts generally agree, holds instead that
preliminary injunctive relief may be relief on the
merits for purposes of evaluating prevailing party
status. Dearmore, 519 F.3d at 524.

2. The Court of Appeals for the Fifth Circuit
has held that preliminary injunctive relief,
without relief on the merits, is sufficient to
establish prevailing party status under
federal fee shifting statutes.

In the instant case, the district court awarded
attorney's fees to Dearmore because Dearmore
obtained a preliminary injunction order despite having
failed to obtain final relief on the merits of his claims.
Id. at 526. The district court found that the order
granting preliminary relief afforded Dearmore
prevailing party status, and that he was thus entitled
to attorney’s fees. Jd. at 524. The Fifth Circuit
recognized that the issue had not been decided by this
Court and that the circuit courts have applied less
than uniform standards in deciding the question. Id.
at 521. Nevertheless, the Fifth Circuit affirmed the
district court’s order and determined that Dearmore
was a “prevailing party” within the meaning of 42
U.S.C. § 1988. Id. at 526. In affirming, the Fifth
Circuit created a three part test to determine
“prevailing party” status. The plaintiff:

(1) must win a preliminary injunction, (2) based
upon an unambiguous indication of probable
success on the merits of the plaintiffs claims as
opposed to a mere balancing of the equities in

11

favor of the plaintiff, (3) that causes the
defendant to moot the action, which prevents
the plaintiff from obtaining final relief on the
merits.

Id. at 524.

In allowing Dearmore to be a prevailing party, the
Fifth Circuit disregarded this Court’s recognition in
University of Texas v. Camenisch, 451 U.S. 390 (1981),
of the necessarily abbreviated nature of a preliminary
injunction hearing. The decision of the Fifth Circuit
would effectively convert a proceeding that by its very
nature is not intended to result in a final judgment
into the equivalent of a trial on the merits. This is
particularly true where, as here: (1) the district court
did not notify the parties that it was considering a
preliminary injunction, (2) the district court did not
hold a preliminary injunction hearing, and (3) the
district court accepted the well pleaded facts of
Dearmore’s complaint as true.

3. Treatment of this issue by the other circuit
courts of appeals is equally inconsistent.

Several other circuit courts of appeal have
considered the question presented in this case. Those
courts are split both as to whether a preliminary
injunction is sufficient to confer such status and, even
amongst. those that have ruled a_ preliminary
injunction may sometimes be enough, they differ in
their reasoning as to when and why.

For example, the Eighth Circuit, in Advantage
Media, L.L.C. v. City of Hopkins, 511 F.3d 833, 838

12

(8th Cir. 2008), cert. denied, _ U.S. __, 76 U.S.L.W.
3557 declined to find a party who had obtained a
preliminary injunction, followed by a change in the
municipal ordinance which mooted the case, to be a
“prevailing party” under federal fee shifting statutes.
In that case, the district court granted a preliminary
injunction against the enforcement of a municipal sign
ordinance, finding that plaintiff had demonstrated a
“substantial likelihood of success on the merits. . .”
Advantage Media, L.L.C. v. City of Hopkins, 379 F.
Supp. 2d 1030, 1046 (D. Minn. 2005). In response to
the injunction the city enacted a new permanent sign
ordinance. Advantage Media, 511 F.3d at 835. The
new sign ordinance cured the constitutional infirmities
that formed the basis of Advantage’s lawsuit. Id.
Following resolution of plaintiffs other claims, the
district court denied plaintiffs motion for attorney’s
fees. Id. The plaintiff appealed, and the Eighth
Circuit held that the plaintiff was not a prevailing
party entitled to attorney’s fees. Id. at 839. The court
reasoned that, although the lawsuit resulted in the
city’s alteration of several potentially unconstitutional
provisions of the sign ordinance, that alone was
insufficient under this Court’s opinion in Buckhannon
to make the plaintiff a prevailing party. Jd. at 838.

Other circuit courts have held that a party that
obtains a preliminary injunction may be a “prevailing
party” where the injunction itself acts to render the
case moot. For example, in Watson v. County of
Riverside, 300 F.3d 1092, 1096 (9th Cir. 2002), cert.
denied, 538 U.S. 923 (2003), the Ninth Circuit granted
attorney's fees in a case where the injunction sought
by the plaintiff granted him all of the relief he would
have obtained after trial by a final judgment on the

13

merits. In that case, the plaintiff, a deputy sheriff,
sought to enjoin the County of Riverside from using a
report against him in an administrative termination
proceeding on the ground that the report had allegedly
been obtained unlawfully. Jd. at 1094. The district
court granted the preliminary injunction and the
administrative termination proceeding was _ held
without the report. Jd. All of the remaining issues in
the case were disposed of, and the case became moot
once the administrative hearing had been held in the
manner sought by plaintiff. Jd.

The Ninth Circuit found that the plaintiff was
entitled to attorney’s fees because the relief he
obtained as a result of the court’s order — an
administrative hearing without the use of the report —
was the precise relief he sought in the lawsuit. Jd.
Indeed, the court specifically noted that the county did
not “voluntarily” decide not to use the report in the
administrative proceeding - it was prevented from
doing so because the district judge said it could not.
Id. at 1096 (“In this case, the County was prohibited
from introducing Watson’s report at the termination
hearing for one reason only: because Judge Timlin said
so.”) The court pointed out that the plaintiff, “obtained
significant, court-ordered relief that accomplished one
of the main purposes of his lawsuit.” Jd.

In Select Milk Producers, Inc. v. Johanns, 400 F.3d
939 (D.C. Cir. 2005), the plaintiff brought an action
against the Secretary of Agriculture regarding a
separate price class for certain dairy products. The
plaintiff obtained a preliminary injunction halting the
implementation of the regulations and the Department
of Agriculture changed the regulations, thereby

14

mooting the case. Jd. at 943. The D.C. Circuit, in
allowing the award of attorney’s fees to the plaintiff,
gleaned a three prong test from the Buckhannon
decision. Id. at 946-947. The court explained that
“Buckhannon embraces three core principles for
construing the term ‘prevailing party’ in federal fee
shifting statutes: ...” Id. The three principles are
that: (1) plaintiff must show a change in the legal
relationship; (2) judgment must be rendered in the
party’s favor; and, (3) there must be some judicial
relief as opposed to merely a judicial pronouncement.
Id. The D.C. Circuit Court further explained,

“In short, the holding in Buckhannon embraces
the possibility that, under’ certain
circumstances, a preliminary injunction, like a
consent decree, may result in a court-ordered
change in the legal relationship between the
parties that is sufficient to make a plaintiff a
‘prevailing party’ under a fee shifting statute
like the EAJA. Therefore, Buckhannon surely
does not endorse a per se rule that a
preliminary injunction can never transform a
party in whose favor the myjunction is issued
into a ‘prevailing party’ under the EAJA.”

Id. at 945.

In applying the three prong test discussed above,
the circuit court focused on the district court’s finding
that Milk Producers “undoubtedly would have
succeeded on the merits.” /d. at 948. “Milk Producers
secured a preliminary injunction in this case largely
because their likelihood of success on the merits was
never seriously in doubt.” /d. In other words, the

15

court’s prediction of success on the merits at the
preliminary injunction stage was sufficient to confer
prevailing party status.

In Haley v. Patacki, 106 F.3d 478, 483 (2d Cir.
1997), the Second Circuit Court of Appeals adopted the
approach that a decision to award a preliminary
injunction can establish prevailing party status if the
determination is made on the merits. In that case,
legislative employees brought an action against the
governor and state of New York, claiming that their
constitutional] and statutory rights were violated by
the governor’s withholding of their biweekly salary
payments from an appropriations bill pending passage
of the state budget. Jd. at 480. The district court
issued a _ preliminary injunction requiring the
payments to continue during the pendency of the
action. Jd. Before the case could be decided on the
merits, the state passed a budget thereby mooting the
case. Id. The district court found that the plaintiffs
were prevailing parties and awarded attorney’s fees
based upon their success in obtaining a preliminary
injunction. /d. at 481. The governor appealed. The
Second Circuit, in allowing the award of attorney’s fees
held that, “we do not automatically require a denial of
attorney's fees when a party receives a stay or
preliminary injunction but never obtains final
judgment...” Jd. at 483. “Instead, a decision to award
attorney's fees requires an analysis of whether the
party’s relief, whether by injunction or stay, resulted
from a determination on the merits.” Jd. Moreover,
the court explained that “[a] determination of whether
a court’s action is governed by its assessment of the
merits ‘requires close analysis of the decisional
circumstances and reasoning underlying the grant of

16

preliminary relief.” Jd. at 483, (quoting LaRouche v.
Kezer, 20 F.3d 68, 72 (2d Cir. 1994)).

Although a determination of entitlement to
preliminary relief can include an examination of the
merits, a preliminary injunction may be granted by the
mere showing of a likelihood of success on the merits.
Ashcroft v. American Civil Liberties Union, 542 U.S.
656, 666 (2004). According to some circuit courts of
appeal, with the exception of the Fourth and possibly
Eighth circuits, if a party prevails even on the lesser
standard of “likelihood of success,” the party may,
nonetheless, be considered a prevailing party entitled
to attorney’s fees. That standard is inconsistent with
this Court’s previous holdings that the standard must
be success on the merits. Buckhannon, 532 U.S. at 604;
Hewitt v. Helms, 482 U.S. 755, 107 S.Ct. 2672 (1987).

B. The Courts That Have Held Success on a
Preliminary Injunction Alone to be Sufficient
to Make the Recipient of the Injunction a
Prevailing Party Have Resurrected the
“Catalyst Theory” Abandoned by this Court in
Buckhannon.

To see how the Fifth Circuit’s decision in Dearmore
merely revives the catalyst theory, the Court need look
no further than the judicially enforceable result that
Dearmore took from the courthouse and compare that
result with the result in Buckhannon. Dearmore, like
the plaintiffs in Buckhannon, |eft the courthouse at the
end of the day with nothing. The problem with the
catalyst theory, as recognized by this Court in
Buckhannon, is that the plaintiff in such cases has not
truly “prevailed” because the plaintiff lacks the means

17

of ensuring by judicial imprimatur the change in law
brought about by the lawsuit. See Buckhannon at 605
(“A defendant’s voluntary change in conduct, although
perhaps accomplishing what the plaintiff sought to
achieve by the lawsuit, lacks the necessary judicial
imprimatur on the change.”) Dearmore is in the
identical position; he left the courthouse — as did the
plaintiffs in Buckhannon — without any means of
enforcing the City Council’s voluntary change in
conduct. Unlike Buckhannon, however, the ordinance
that Dearmore wanted stricken down was, for the most
part, still very much intact.

The resurrection of the catalyst theory in any form
creates the very sort of problems that led this Court to
disavow that doctrine in Buckhannon. The City in this
case did what it thought was reasonable and right, and
what was fair to the district court, the plaintiff, and
the taxpayers who foot the bills for the City: instead of
waging a fight over the validity of the provision the
district court found to be constitutionally suspect, the
City changed that provision - a provision that was a
small part of a larger, comprehensive ordinance, a
provision that the City never intended to implement in
the manner hypothesized by the district court in any
event. In short, the City believed that it could modify
the ordinance in a manner that would address the
district court’s concerns without doing violence to its
single family rental program, and thereby save the
time, effort, and expense that continued litigation
would have entailed.

Opinions like the Fifth Circuit’s decision in
Dearmore will remove that option, forcing defendants
to litigate to the bitter end something that may be of

18

absolutely no moment to the defendant. This Court’s
decision in Buchhannon acknowledged that very
mischief by recognizing the disincentive that the
“catalyst theory” would have on a defendant’s decision
to voluntarily change its conduct. See Id. at 608
(noting that a defendant’s potential liability for
attorney’s fees may be as significant as, if not more
than, potential liability on the merits, and
acknowledging that the possibility of being assessed
attorney's fees may well deter a defendant from
altering its conduct in the manner sought by the
plaintiff). To the extent the abandonment of the
catalyst theory was meant to encourage a defendant to
give the plaintiff at least some of the relief the plaintiff
seeks, the same holds true with any form of relief short
of a judgment on the merits or a consent decree.
Whatever the form of “catalyst,” whether it be the
mere filing of a lawsuit or a preliminary opinion of a
district court, if a defendant finds itself facing an
inevitable award of attorney’s fees by capitulating even
a little, it has no alternative but to continue a battle
over something it would otherwise have never
contested. That sort of fight is the type of needless,
collateral litigation this Court has cautioned against
creating in Buckhannon and other cases. See
Buckhannon at 609 (“We have accordingly avoided an
interpretation of the fee-shifting statutes that would
have ‘spawn[ed] a second litigation of significant
dimension.”)(quoting Texas State Teacher’s Assn. v.
Garland Independent School Dist., 489 U.S. 782, 791
(1989)).

The effective revival of the catalyst theory by the
Fifth Circuit and other courts not only invites that sort
of needless litigation, it compels it. In its opinion, the

19

Fifth Circuit noted that “when a defendant moots an
action in response to the district court’s preliminary
injunction order, the defendant will have generally
acceded to the order and thus will not have appealed.
This lack of appeal by a defendant has been noted by
this Court and others to Se a factor favoring a finding
of prevailing party status.” Dearmore, 519 F.3d at 524,
n.3 (emphasis added). Thus, in order to avoid any sort
of implication that the defendant somehow concedes
prevailing party status for the plaintiff, the defendant
must continue what is otherwise an unwanted fight
through every level. Indeed, the Fifth Circuit would
apparently have required the City to engage in full-
fledged combat in the district court, then on appeal of
the preliminary injunction, and then, quite possibly, on
appeal again from the district court’s final order — all
arising from the hypothetical application of a provision
of an ordinance which was neither material or
necessary to protect the goals of the ordinance as
originally intended.

CONCLUSION

Since this Court’s opinion in Buckhannon, the
circuit courts have wrestled with the question of
whether, and under what circumstances, a preliminary
injunction, without a final judgment, can serve as the
basis for prevailing party status under federal fee
shifting statutes. It is a recurring problem that has
not only created a split in the circuits as to the “yes” or
“no” of the question, but inconsistencies, as well,
among those circuits that allow a_ preliminary
injunction to satisfy Buckhannon’s requirement of a
“final judgment or consent decree.”

20

Moreover, those circuits that allow a preliminary
injunction to confer prevailing party status have
strayed from this Court’s holding in Buckhannon by
allowing a party that leaves the courthouse with only
preliminary relief — without having obtained a final
judgment or court ordered consent decree — to
nevertheless receive attorney's fees as a prevailing
party. As was aptly observed by Judge Henderson in
his dissent in Select Milk Producers, “(t]he words
‘preliminary’ and ‘prevailing’ are not ones that easily
fit together.” Select Milk Producers, 400 F.3d at 962
(Henderson, J., dissenting). The Court should not
allow the catalyst theory rejected in Buckhannon to
reappear in the form created in some of the circuit
courts by equating the words “preliminary” and
“prevailing.”

This petition for a writ of certiorari should be
granted.

21

Respectfully Submitted,

R. Bradford Neighbor
City Attorney
Counsel of Record

Michael J. Betz
Senior Assistant City Attorney

Mark E. Dempsey
Senior Assistant City Attorney

William F. Glazer
Senior Assistant City Attorney

City of Garland, Texas

P.O. Box 469002

Garland, Texas 75046-9002
(972) 205-2380

Attorneys for Petitioner

APPENDIX

la

APPENDIX A

IN THE UNITED STATES COURT OF
APPEALS FOR THE FIFTH CIRCUIT

No. 06-11007

[Filed March 10, 2008]

ROY DEARMORE, Individually and as
Representative of all Owners of Single
Family Residential Property in Garland,
Texas; A C BLAIR, Individually and as
Representative of ali Property Managers
in Garland, Texas; MARIE COMBS,
Individually and as Representative of all
Tenants of Single Family Residential
Property in Garland, TX

Plaintiffs-Appellees
V.
CITY OF GARLAND

Defendant-Appellant

ee ee de a a aa

Appeal from the United States District Court
for the Northern District of Texas

2a

Before JONES, Chief Judge, and WIENER and
CLEMENT, Circuit Judges. EDITH BROWN
CLEMENT, Circuit Judge:

Defendant-Appellant City of Garland (“the City”)
appeals from the district court’s order awarding
attorney’s fees to Plaintiffs-Appellees Roy Dearmore,
A.C. Blair, and Marie Combs (collectively “Dearmore’”),
under 42 U.S.C. § 1988(b). This statute authorizes an
award of attorney’s fees to a “prevailing party” in an
action to enforce the provisions of certain federal
statutes, including 42 U.S.C. § 1983. The City also
appeals from the district court’s order denying its
motion to alter or amend judgment under Federal Rule
of Civil Procedure 59(e). Because we conclude that
Dearmore is a prevailing party and the district court
committed no reversible error in its Rule 59(e) order,
we affirm.

I. FACTS AND PROCEEDINGS

On June 16, 2005, Dearmore filed a complaint
against the City under 42 U.S.C. § 1983, challenging
the constitutionality of Garland City Ordinance No.
5895 (‘the Ordinance”), which related to the
maintenance of rental properties in the City. The
complaint alleged that various minimum housing
standards and inspection procedures contained in the
Ordinance violated the Fourth, Fifth, and Fourteenth
Amendments of the United States Constitution. That
same day, Dearmore filed a motion for a temporary
restraining order, seeking to enjoin the City from
enforcing the Ordinance.

3a

On June 25, 2005, the district court denied
Dearmore’s motion for a temporary restraining order.
In response, on July 1, 2005, Dearmore filed an
amended motion for a temporary restraining order and
a motion to reconsider its denial of the temporary
restraining order, or in the alternative, a request for
an expedited preliminary injunction hearing. On July
6, 2005, the City filed a motion pursuant to Federal
Rule of Civil Procedure 12(b)(6) to dismiss Dearmore’s
complaint for failure to state a claim. Thereafter,
Dearmore amended his complaint and removed his
Fifth and Fourteenth Amendment takings and due
process claims. Thus, Dearmore’s amended complaint
alleged only that the Ordinance authorized
warrantless searches of private homes, failed to
provide a mechanism to notify tenants, property
owners, or property managers of their right to refuse
a search, and required applicants to disclose personal
information, all in violation of the Fourth and
Fourteenth Amendments. Dearmore’s amended
complaint sought a declaratory judgment, injunctive
relief, and attorney’s fees and costs.

On November 3, 2005, the district court granted
Dearmore’s motion for a preliminary injunction.” In its
order, the district court held that in so far as the
Ordinance allowed inspections and searches of
unoccupied property, it violated a property owner’s
Fourth Amendment right to be free from unreasonable

' The district court construed Dearmore’s amended motion for a
temporary restraining order as a motion for a preliminary
injunction, because Dearmore had requested a preliminary
injunction in his amended complaint.

4a

searches and seizures. As a result, the district court
issued a preliminary injunction enjoining the City
from enforcing section 32.09(F) of the Ordinance,
which required a property owner who rents or leases
a single-family dwelling to allow an inspection of the
rental property as a condition of issuing a permit, or
penalizes the lessor for refusing to allow an
inspection.” The district court also dismissed
Dearmore’s other Fourth Amendment claims. On the
same date, the district court issued a scheduling order.
establishing discovery deadlines and setting the case
for trial on October 2, 2006.

Following the issuance of these orders on November
3, 2005, counsel for the City informed counsel for
Dearmore that he did not need to post the bond
necessary to enforce the preliminary injunction
because the City planned to amend the Ordinance to
address the district court’s order. On November 15,
2005, the Garland City Council amended the
Ordinance, removing the provisions related to a
nonresident owner’s consent to the inspection of
single-family rental properties and clarifying the
circumstances under which the City may seek a
warrant to inspect such properties when consent has
been refused or could not be obtained. The City
notified the district court of this amendment and filed
a motion to dismiss Dearmore’s action as moot, which

* The Ordinance provided for criminal penalties for certain
violations. Specifically, the Ordinance made it an offense if an
owner rented property without a permit. It also made it an offense
if an owner refused to allow an inspection by the City. The fines
for both offenses were up to $2000 per day.

5a

Dearmore did not oppose. On November 30, 2005, the
district court granted the City’s motion and entered
final judgment dismissing the case as moot and with
prejudice. The order granting this motion found that
Dearmore was a “prevailing party” and awarded him
attorney’s fees and costs under 42 U.S.C. § 1988(b).

On December 12, 2005, the City filed a motion to
alter or amend judgment pursuant to Rule 59(e),
requesting that the district court not designate
Dearmore as a prevailing party and asking that the
court re-tax costs against the parties incurring them.
On December 13, 2005, Dearmore filed a motion for
attorney’s fees pursuant to Rule 54(d)(2). On August
29, 2006, the district court denied the City’s motion to
alter or amend judgment. On September 6, 2006,
following a stipulation by the parties as to the amount
of fees only, the district court granted Dearmore’s
motion for attorney’s fees. The City appeals both
rulings.

Il. STANDARD OF REVIEW

The district court has broad discretion to award
attorney’s fees under § 1988(b). See Hopwood v. Texas,
236 F.3d 256, 277 (5th Cir. 2000). In evaluating
whether the district court abused its discretion to
award attorney’s fees, this Court reviews the factual
findings supporting the grant or denial of attorney's
fees for clear error and the conclusions of law
underlying the award de novo. Energy Mgmt. Corp. v.
City of Shreveport, 467 F.3d 471, 482 (5th Cir. 2006).
“(T]he characterization of prevailing-party status for
awards under fee-shifting statutes such as § 1988 isa
legal question subject to de novo review.” Bailey v.

6a

Mississippi, 407 F.3d 684, 687 (5th Cir. 2005). The
denial of a motion to alter or amend judgment under
Rule 59(e) is reviewed for abuse of discretion. Molina
v. Equistar Chems. LP, No. 06-41574, 2008 WL
104077, at *2 (5th Cir. Jan. 10, 2008) (unpublished).
“However, to the extent that a ruling was a
reconsideration of a question of law... the standard of
review is de novo.” Id. (internal quotations omitted).
This appeal presents a question of law that is reviewed
de novo.

Ill. DISCUSSION

In § 1988(b), Congress created an exception to the
“American Rule” that htigants pay for their own
attorney’s fees. See Sole v. Wyner, 127 S. Ct. 2188,
2191 (2007); Buckhannon Bd. & Care Home, Inc. v. W.
Va. Dep’t of Health & Human Res., 532 U.S. 598, 602
(2001). This section provides that “the court, in its
discretion, may allow the prevailing party, other than
the United States, a reasonable attorney’s fee as part
of the costs.” 42 U.S.C. § 1988(b). This appeal presents
an issue of first impression in this Circuit: Whether a
plaintiff qualifies as a “prevailing party” under
§ 1988(b) when he obtains a preliminary injunction
after the district court makes an unambiguous
indication of probable success on the merits of his
claim and the defendant subsequently moots the case
before trial in direct response to the court's
preliminary injunction order.

Supreme Court and Fifth Ci :uit precedent provide
general guidance on the qualifications for prevailing
party status. The Supreme Court has noted that “[t}]he
touchstone of the prevailing party inquiry’... is ‘the

Ta

material alteration of the legal relationship of the
parties in a manner which Congress sought to promote
in the fee statute.” Sole, 127 S. Ct. at 2194 (quoting
Tex. State Teachers Ass’n v. Garland Indep. Sch. Dist.,
489 U.S. 782, 792-93 (1989)); see Buckhannon, 532
U.S. at 603 (explaining that “Congress intended to
permit the interim award of counsel fees only when a
party has prevailed on the merits of at least some of
his claims” (internal quotations omitted)). Such a
material alteration must have the “necessary judicial
imprimatur.” See Buckhannon, 532 U.S. at 605. The
Buckhannon. Court did not expressly define “judicial
imprimatur” but stated that enforceable judgments on
the merits and consent decrees are sufficient for
prevailing party status. Jd. at 604. In so holding, the
Buckhannon Court rejected the “catalyst theory,”
explaining that a defendant’s voluntary change in
conduct in response to the plaintiffs lawsuit and nota
court order, although perhaps accomplishing what the
plaintiff sought to achieve, lacks the necessary judicial
imprimatur to establish prevailing party status. Id. at
601, 605. This Court considered such Supreme Court
precedent in Energy Management and held that, to be
a prevailing party, a plaintiff must “(1) obtain actual
relicf, such as an enforceable judgment or a consent
decree; (2) that materially alters the legal relationship
between the parties; and (3) modifies the defendant’s
behavior in a way that directly benefits the plaintiff at
the time of the judgment or settlement.” 467 F.3d at
482.

Although an enforceable judgment on the merits
and a court-ordered consent decree have sufficient
judicial imprimatur, these examples are not exclusive.
See Buckhannon, 532 U.S. at 605 (referencing the

8a

judgment on the merits and consent decree as mere
“examples”); Dupuy v. Samuels, 423 F.3d 714, 719 (7th
Cir. 2005); Select Milk Producers, Inc. v. Johanns, 400
F.3d 939, 945 (D.C. Cir. 2005); John T. v. Del. County
Intermediate Unit, 318 F.3d 545, 558 (3d Cir. 2003);
Dubuc v. Green Oak Twp., 312 F.3d 736, 753-54 (6th
Cir. 2002); Watson v. County of Riverside, 300 F.3d
1092, 1096 (9th Cir. 2002). As a result, lower courts
have had difficulties in ascertaining what other forms
of judicial action have the “necessary judicial
imprimatur” to create prevailing party status,
particularly in the context of preliminary injunctions.
The Supreme Court has never expressed a view “on
whether, in the absence of a final decision on the
merits of a claim for permanent injunctive relief,
success in gaining a preliminary injunction may. . .
warrant an award of counsel fees.” Sole, 127 S. Ct. at
2196. Without a Supreme Court decision on point,
circuit courts considering this issue have announced
fact-specific standards that are anything but uniform. °
See Planned Parenthood of Houston & Se. Tex. v.
Sanchez, 480 F.3d 734, 740-41 (5th Cir. 2007). As this
Court has noted,

several circuits have determined that a
preliminary injunction that merely preserves
the status quo temporarily will not confer
“prevailing party” status on a party; instead,
the preliminary injunction must (i) reflect a
merits-based decision on an issue involved in
the case, see, e.g., John T. v. Del. County
Intermediate Unit, 318 F.3d 545, 558-59 (3d Cir.
2003); Dubuc v. Green Oak Twp., 312 F.3d 736,
753 (6th Cir. 2002); Taylor v. City of Fort
Lauderdale, 810 F.2d 1551, 1558 (ilth Cir.

9a

1987); (ii) constitute substantive, indefeasible
relief akin to final relief on the merits because,
for example, “the partys claim [for al]
permanent injunction is rendered moot by the
impact of the preliminary injunction,” JN.
Cheyenne Tribe v. Jackson, 433 F.3d 1083, 1086
(8th Cir. 2006); see also, e.g., Dupuy v. Samuels,
423 F.3d 714, 719, 723 (7th Cir. 2005); (iii)
grant the party concrete and irreversible relief
in a merits-based decision that vindicates the
partys claim and is not appealed by the
opposing party, see, e.g., Select Milk Producers,
Inc. v. Johanns, 400 F.3d 939, 947-48 (D.C. Cir.
2005); or (iv) incorporate some combination of
these factors.

Yousuf v. Motiva Enters. LLC, 246 F. App’x 891, 894
(5th Cir. 2007) (per curiam) (footnotes omitted) (citing
Planned Parenthood, 480 F.3d at 740-41). “The Ninth
Circuit has . .. taken a relatively generous approach,
at least in principle, stating that a ‘preliminary
injunction issued by a judge carries all the ‘judicial
imprimatur’ necessary to satisfy Buckhannon.”
Planned Parenthood, 480 F.3d at 741 (quoting Watson,
300 F.3d at 1096). The Ninth Circuit, however, did
note that a plaintiff would not qualify as a prevailing
party if he obtained a preliminary injunction early in
the litigation but later lost on the merits and had a
judgment entered against him. /d. (citing Watson, 300
F.3d at 1096). “By contrast, the Fourth Circuit has
expressed strong skepticism that a_ preliminary
injunction could ever serve as the basis for prevailing
party status,” because “the merits inquiry in the

preliminary injunction contest is _ necessarily

10a

abbreviated.” Jd. (quoting Smyth v. Rivero, 282 F.3d
268, 276 (4th Cir. 2002)).

This Court has not yet created or endorsed a
particular test. Instead, this Court has held that a
plaintiff who obtains a preliminary injunction is not a
prevailing party if he fails to qualify under any of the
other circuits’ tests. In Planned Parenthood. the
plaintiffs alleged in part that Rider 8, a statute that
prohibited the distribution of federal family funds to
those who performed elective abortion procedures or
who contracted or provided funds to those who perform
such procedures, violated the Supremacy Clause. 480
F.3d at 736-37. The district court granted the
plaintiffs’ motion for a preliminary injunction,
enjoining enforcement of Rider 8, and the defendant
appealed. Id. at 737. On interlocutory appeal, this
Court determined that Rider 8 did not violate the
Supremacy Clause and remanded the case, with
instructions to dissolve the injunction. Jd. On remand,
the district court granted the defendant’s motion to
dismiss the case and denied the plaintiffs attorney’s
fees. Id. The plaintiff's appealed the denial of fees. Jd.
This Court held that the plaintiffs were not prevailing
parties because (1) the preliminary injunction involved
an abbreviated inquiry into the merits coupled with a
weighing of likely harms, (2) the preliminary
injunction only preserved the status quo between the
parties, (3) the case was not mooted after the
preliminary injunction was granted and the defendant
appealed, and (4) on remand, the plaintiffs did not
seek to avoid the dissolution of the injunction and
eventually lost on the merits. Jd. at 741-42. Under
these facts, this Court had no need to choose between
the tests of the other circuits because the plaintiffs

lla

clearly failed to qualify under any of them. See id. at
741.

Likewise, in Yousuf, this Court held that the
plaintiff was not a prevailing party because he did not
qualify under any test. 246 F. App’x at 894. The
plaintiff, who leased and operated a Shell service
station pursuant to a franchise agreement with the
defendant, filed suit after the defendant notified him
ofits intent to terminate the franchise relationship. Jd.
at 892. After suit was filed, the parties executed a
“Stipulated Standstill Agreement,” where they agreed
to maintain the status quo of the franchise
relationship pending the district court’s decision on the
preliminary injunction, which the district court
adopted as an order of the court. Jd. As discovery
progressed, the parties reached another agreement
and filed a joint stipulation and motion for the entry of
a consent judgment on the plaintiffs preliminary
injunction motion. Jd. The district court, in accordance
with the stipulation and motion, issued the
preliminary injunction maintaining the franchise
relationship, but the order stated that the court made
no findings of fact or law on the motion. Id. at 892-93.
Before the case could proceed to a jury trial, Hurricane
Katrina destroyed the service station, and the
defendant terminated the franchise agreement. Id. at
893. The plaintiff then moved to dismiss the case as
moot and filed for attorney’s fees under the Petroieum
Marketing Practices Act, 15 U.S.C. § 2801 et seq.,
based on the entry of the standstill agreement and
preliminary injunction. Jd. The district court denied
the attorney’s fees, and plaintiff anpealed. 7d. On
appeal, this Court affirmed the district court and
determined that the plaintiff was not a prevailing

12a

party because (1) the preliminary injunction did
nothing more than “temporarily preserve the status
quo, maintaining the parties’ preexisting franchise
relationship until the legal issues surrounding the
approaching termination of that relationship could be
addressed on the merits,” (2) the district court did not
consider the merits of plaintiffs claim and explicitly
noted that it had not made any findings of fact or
conclusions of law in its order granting the preliminary
injunction per the parties’ agreement, and (3) the
plaintiff's claim became moot “not because the court
orders were so successful for [the plaintiff] that they
rendered any further relief unnecessary, but rather
because of the unrelated impact of Hurricane Katrina.”
Id. at 894-95.

Unlike Planned Parenthood or Yousuf, this case
does not fail every test employed by the other circuits.
As noted, the Sixth Circuit provides that a plaintiff is
a prevailing party if the preliminary injunction
represents an “unambiguous indication of probable
success on the merits, and not merely a maintenance
of the status quo ordered because the balance of
equities greatly favors the plaintiff.” Dubuc, 312 F.3d
at 753 (internal quotations omitted). Likewise, the
Seventh Circuit states that a plaintiff may otain
atiorney’s fees when the district court engaged in a
discussion on the merits of the claim when considering
a preliminary injunction motion, and the case was
mooted after the plaintiffs were granted a preliminary
injunction but before they requested attorney’s fees.
See Dupuy, 423 F.3d at 722-23. Further, the Ninth
Circuit holds that a plaintiff is entitled to attorney’s
fees if he obtained a preliminary injunction and the
case was subsequently mcoted. See Watson, 300 F.3d

l3a

at 1096. Here, the district court considered the merits
of Dearmore’s claim and clearly concluded that a
provision of the Ordinance violated the Fourth
Amendment. In response to the district court’s grant
of this preliminary injunction, the City amended the
offending provision of the Ordinance, thereby mooting
the case. Under these facts, at a minimum, it appears
that Dearmore qualifies as a prevailing party under
the Sixth, Seventh, and Ninth Circuits’ tests. As a
result, we are not required to reverse the district
court’s grant of attorney's fees to Dearmore under
Planned Parenthood, 480 F.3d at 740-42, or Yousuf,
246 F. Avp’x at 894.

The City urges this Court to hold that Dearmore is
not a prevailing party because the preliminary
injunction stmply maintained the status quo until
trial, did not provide final relief on the merits, and did
not materially alter the legal relationship between the
parties. The City contends that it changed its position
by amending the offe» ding provision of the Ordinance
voluntarily, not because the preliminary injunction
required it to do so. Dearmore, on the other hand,
argues that he is a prevailing party because he won a
preliminary injunction sufficiently grounded in the
merits, which provided him with some judicial relief.
Dearmore also asserts that the grant of the
preliminary injunction and the City’s subsequent
amendment of the offending portion of the Ordinance
represents a judicially-sanctioned material change in
the legal relationship between the parties.

The position urged by the City is simply not
compelled by Buckhannon. Contrary to the City’s
argument, Buckhannon does not stand for the

l4a

proposition that a defendant should be allowed to moot
an action to avoid the payment of the plaintiffs
attorney's fees when a district court grants a
preliminary injunction based upon an unambiguous
‘indication of probable success on the merits. Instead,
we agree with Dearmore that this preliminary
injunction, coupled with the City’s subsequent mooting
of the case, is sufficient to establish prevailing party
status.

Under these facts, to qualify as a prevailing party
under § 1988(b), we hold that the plaintiff(1) must win
a preliminary injunction, (2) based upon an
unambiguous indication of probable success on the
merits of the plaintiffs claims as opposed to a mere
balancing of the equities in favor of the plaintiff, (3)
that causes the defendant to moot the action, which
prevents the plaintiff from obtaining final relief on the
merits.* Such a test satisfies Buckhannon, because it
requires that a party obtain a judicial ruling which
results in a material change in the legal relationship
between the parties. It also does not implicate the
“catalyst theory,” which the Supreme Court struck
down in Buckhannon, because this test grants
prevailing party status only when the defendant moots

* Although not part of our test, we note that when a defendant
moots an action in response to the district court’s preliminary
injunction order, the defendant will have generally acceded to the
order and thus will not have appealed. This lack of an appeal by
a defendant has been noted by this Court and others to be a factor
favoring a finding of prevailing party status. See, e.g., Planned
Parenthood of Houston & Se. Tex. v. Sanchez, 480 F.3d 733,
741-42 (5th Cir. 2007); Select Milk Producers, Inc. v. Johanns, 400
F.3d 939, 948 (D.C. Cir. 20%5).

15a

the plaintiff's action in response to a court order, not
just in response to the filing of a lawsuit. Likewise, it
complies with the general prevailing party standard

announced by this Court in Energy Management, 467
F.3d at 482.

Dearmore clearly satisfies the three-prong test for
prevailing party status announced herein. First, it is
undisputed that the district court granted Dearmore a
preliminary injunction—an enforceable judgment—by
court order on November 3, 2005. Thus, Dearmore has
satisfied the first prong of the test.

Second, the district court granted the preliminary
injunction based upon its assessment that Dearmore
would likely succeed on the merits of his Fourth
Amendment claim, not because of any balancing of the
equities in his favor. See Dubuc, 312 F.3d at 753
(holding that a plaintiff is entitled to prevailing party
status when he obtains a preliminary injunction based
upon the merits of his claim); Haley v. Pataki, 106 F.3d
478, 483 (2d Cir. 1997) (holding that “[w]Jhen a party
receives a stay or preliminary injunction but never
obtains a final judgment, attorney’s fees are proper if
the court’s action in granting the preliminary
injunction is governed by its assessment of the
merits”); Taylor v. City of Fort Lauderdale, 810 F.2d
1551, 1558 (11th Cir. 1987) (stating that “a
preliminary injunction on the merits, as opposed to a
merely temporary order which decides no substantive
issues but merely maintains the status quo, entitles
one to prevailing party status and an award of
attorney’s fees”). In its order, the district court clearly
informed the City that certain provisions of its
Ordinance violated the Fourth Amendment, stating:

16a

Inspections and searches of unoccupied property
would clearly infringe on the property owner’s
right undef the Fourth Amendment to the
United States Constitution to be free from
unreasonable search and seizure. In these
limited situations, where the property is
unoccupied, the protections guaranteed by the
Fourth Amendment to the United States
Constitution to the property owner outweigh
any interest that the government has in
protecting the health, safety or welfare of the
public. .. . The ease with which the City could
acquire an administrative search warrant
makes unnecessary the need for the City to
require property owners to forego in advance
their rights guaranteed by the Fourth
Amendment. The court fully understands that
the City has a valid and _ important
governmental interest in protecting the public,
however, the court sees no reason why this
should be done at the expense of infringing on
rights guaranteed by the Fourth Amendment to
the United States Constitution.

Dearmore v. City of Garland, 400 F. Supp. 2d 594, 903
(N.D. Tex. 2005). Although the district court indicated
that it was “viewing [the facts] in the light most
favorable to Dearmore” and that Dearmore was likely
to prevail, see id. at 904, this language was used to
conform to the standard necessary for the issuance of
a preliminary injunction. Therefore, this is not a case
where the preliminary injunction was based less on
the district court’s view of the merits than on a
perceived hardship to the plaintiff. Rather, the district
court’s grant of the preliminary injunction was clearly

17a

merit-based, and thus Dearmore has satisfied the
second prong of the test.

Third, the district court’s grant of the preliminary
injunction directly caused the City to amend the
offending portion of the Ordinance, thereby mooting
the case and preventing Dearmore from obtaining final
relief on the merits. We note that this is not a case in
which the City voluntarily changed its position before
judicial action was taken. Indeed, if the City had
mooted the case through amending the Ordinance
before the court granted the preliminary injunction,
then Dearmore could not qualify as a prevailing party
under Buckhannon because it would have improperly
invoked the “catalyst theory.” The City, however,
mooted the case after and in direct response to the
district court’s preliminary injunction order. There is
an obvious direct causal link between the district
court’s issuance of the preliminary injunction and the
City’s subsequent amendment of the Ordinance to
moot the case. Almost immediately following the
district court’s issuance of the preliminary injunction,
counsel for the City informed counsel for Dearmore
that Dearmore need not post the bond to enforce the
injunction, because the City planned to amend the
Ordinance to address the district court’s concerns.
Twelve days after the district court issued the
injunction, the Garland City Council amended the
provision of the Ordinance that the district court held
to be violative of the Fourth Amendment. Dearmore

18a

has satisfied the third prong of the test, and thus he is
entitled to attorney’s fees and costs under § 1988(b).*

In support of our holding, we note that the
merits-based preliminary injunction here, coupled with
the City’s mooting of the action in direct response to
the injunction, caused a material alteration in the
legal relationship between the parties. The fact that
Dearmore never obtained a jinal judgment on the
merits does not affect our ruling, as a final judgment
is not required. We, like the District of Columbia
Circuit, conclude that “Buckhannon embraces the
possibility that, under certain circumstances, a
preliminary injunction, like a consent decree [which
does not always include an admission of liability), may
result in a court-ordered change in the legal
relationship between the parties that is sufficient to
make the plaintiff a ‘prevailing party’ under a
fee-shifting statute.” Select Milk Producers, 400 F.3d
at 945. This is such a case. When the district court
granted the preliminary injunction, it provided
Dearmore with the interim judicial relief that he
requested—it blocked the City from enforcing the
portion of the Ordinance that violated the Fourth
Amendment. Because of this injunction, the City could

“ We note that the test we articulate here is only applicable in the
limited factual circumstances described above. By its terms, it
only applies when a plaintiff obtains a preliminary injunction
based on an unambiguous indication of probable success on the
merits, which causes the defendant to moot the action, thereby
preventing the plaintiff from obtaining final relief on the merits.
As a result, this test does not signal any disagreement with the
approaches adopted by the other circuits, with the exception of the
Fourth Circuit.

19a

not conduct warrantless searches or impose criminal
penalties for noncompliance under the offending
provision of the Ordinance. When the City modified its
behavior in direct response to the injunction and
mooted the case, it ultimately provided Dearmore with
his desired result. Dearmore was never subjected to
section 32.09(F) of the Ordinance, which is what he
sought. Such a situation satisfies Buckhannon and
justifies conferring prevailing party status to
Dearmore under these facts.

IV. CONCLUSION

The district court’s award of attorney’s fees and
denial of the City’s Rule 59(e) motion is AFFIRMED.

20a

UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

No. 06-11007
D.C. Docket No. 3:05-CV-1231

[Filed March 10, 2008}

ROY DEARMORE, Individually and as
Representative of all Owners of Single
Family Residential Property in Garland,
Texas; A C BLAIR, Individually and as
Representative of all Property Managers
in Garland, Texas; MARIE COMBS,

- Individually and as Representative of all
Tenants of Single Family Residential
Property in Garland, TX

Plaintiffs-Appellees
v.

CITY OF GARLAND

Defendant-Appellant

a i a a ae a ee a a a a ee a a a a

Appeal from the United States District Court for the
Northern District of Texas, Dallas.

Before JONES, Chief Judge, and WIENER and
CLEMENT, Circuit Judges.

JUDGMENT

2la

This cause was considered on the record on appeal
and was argued by counsel.

It is ordered and adjudged that the judgment of the
District Court is affirmed.

IT IS FURTHER ORDERED that defendant-
appellant pay to plaintiffs-appellees the costs on
appeal to be taxed by the Clerk of this Court.

ISSUED AS MANDATE: APR 01 2008

A True Copy
Attest

Clerk, U.S. Court of Appeals,
Fifth Circuit

By: /s/
Deputy APR 01 2008

New Orleans, Louisiana

22a

APPENDIX B

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
Civil Action No. 3:05-CV-1231-L

_ [Filed September 6, 2006]

ROY DEARMORE, individually and as
Representative of all Owners of Single
Family Residential Property in Garland,
Texas; MARIE COMBS, individually and as
Representative of all tenants of Single
Family residential property in Garland,

Texas, and A. C. BLAIR, individually and as
Representative of all property managers
in Garland, Texas

Plaintiffs,

VS.

CITY OF GARLAND

Defendant.

ed

AGREED ORDER CONCERNING
ATTORNEYS’S FEES

23a

The Court previously issued a memorandum
opinion that Plaintiffs are entitled to attorneys fees in
this cause. The parties have agreed and stipulated
that $8,500 is a reasonable and necessary attorney’s
fee. The Court finds that such amount is a reasonable
and necessary fee. [handwritten notation: Accordingly,

the court grants Plaintiffs’ motion for attorney’s fees,
filed December 13, 2005. SAL]

IT IS, THEREFORE, ORDERED ADJUDGED
AND DECREED that Plaintiff Roy Dearmore recover
of and from Defendant City of Garland $8,500 as
reasonable and necessary attorney’s fees.

SIGNED this 6th day of September, 2006.

/s/
SAM A. LINDSAY
United States District Judge

APPROVED AND AGREED AS TO THE
AMOUNT OF ATTORNEY’S FEES:

/s/
MICHAEL BETZ
Attorney for the City of Garland

/s/

ROBERT A. MILLER
Attorney for the Roy Dearmore

24a

APPENDIX C

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
Civil Action No. 3:05-CV-1231-L

[Filed August 29, 2006]

ROY DEARMORE, individually and as
Representative of all owners of Single
Family residential property in Garland
Texas, MARIE COMBS, individually
and as Representative of all tenants of
Single Family residential property in
Garland, Texas, and A. C. BLAIR,
individually and as Representative of

all property managers in Garland, Texas,

Plaintiffs,
Vv
CITY OF GARLAND,

Defendant.

a a ee ee a a Le a Le Le ee Lae Le ee, a

MEMORANDUM OPINION AND ORDER

25a

Before the court is Defendant’s Rule 59(e) Motion
to Amend Judgment, filed December 12, 2005. After
careful consideration of the motion, briefs, responses,
reply, supplemental briefs, record, hearing, and
applicable law, the court denies Defendant’s Rule
59(e) Motion to Amend Judgment.

I. Background

Plaintiff Roy Dearmore (“Dearmore”) filed this
action pursuant to 42 U.S.C. § 1983 against Defendant
City of Garland (the “City”) on June 16, 2005.’
Dearmore requested the court to enjoin the City from
enforcing City Ordinance No. 5895 (the “Ordinance”)
which amended the City’s Minimum Housing Code.
Dearmore contended that he would suffer irreparable
injury if the City were not enjoined. He maintained
that the Ordinance violated his Fourth Amendment
rights by: (1) authorizing warrantless searches of
private homes; (2) failing to provide a mechanism to
notify the tenant, property owner or property manager
of his or her right to refuse to allow the search; and (3)
requiring the applicant to disclose private information
that violated his right to privacy. Dearmore further
contended that the City had violated the Fourteenth
Amendment.”

' Dearmore amended his complaint on July 15, 2005, adding
Marie Combs and A.C. Blair as Plaintiffs.

* Deamore asserted that his Fourth Amendment claim was
applicable to the State via the Fourteenth Amendment. In his
Original Complaint, Dearmore also asserted that the Ordinance
violated the Fifth Amendment. This claim was omitted in his
First Amended Complaint; therefore, it was not before the court.

26a

On November 3, 2005, the court issued a
Memorandum Onion and Order and Preliminary
Injunction enjeiamng the City from enforcing any
provision of section 32.09 of the Ordinance thr’
required a person who rented or leased a single-family
dwelling to allow an inspection of the rental property
as a condition to issuing a permit, or that penalized
the lessor for refusing to allow an inspection of the
property. The preliminary injunction was not to
become effective until a $5,000 bond was posted by
Dearmore. Dearmore did not post the bond.

On November 12, 2005, twelve days after the court
issued its preliminary injunction, the City passed
Ordinance No. 5957, amending section 32.09(F) and
removing the requirements that a landlord consent to
a warrantless inspection and that a person (landlord)
who rents or leases a single-family dwelling allow an
inspection of the rental property as a condition to the
issuance of a permit.. Immediately after the
amendment to the Ordinance, the City filed a motion
to dismiss the lawsuit as moot. On November 30,

In any event, a reading of the First Amended Complaint readily
reveals that the essence of this lawsuit is based on the Fourth
Amendment claim; it was the big-ticket item of the lawsuit. As
Dearmore received a favorable ruling on it, the court determined
that costs should be taxed against the City. This is totally
consistent with existing precedent. With respect to costs, Fed. R.
Civ. P. 54(d)(1) provides that “costs other than attorney’s fees
shall be allowed as of course to the prevailing party unless the
court otherwise directs.” Rule 54(d) creates a strong presumption
that the prevailing party will be awarded costs. Schwarz v.
Folloder, 767 F.2d 125, 131 (5" Cir. 1985). No reason existed for
the court not to follow this precedent.

27a

2005, the court issued an order (1) granting the City’s
motion to dismiss, (2) holding that Dearmore was a
“prevailing party” to the extent the court declared
section 32.09(F) to be in violation of the Fourth
Amendment, and (3) dissolving the preliminary
injunction. On the same day, the court also issued a
judgment dismissing this action, and taxed all
allowable and reasonable costs against the City.

In its motion to amend the judgment, the City
contends that Dearmore is not the “prevailing party”
in this litigation, and that the court should therefore
amend its judgment to reflect that he is not the
“prevailing party” and to retax costs to the party
incurring them. Dearmore disagrees and contends
that he is the “prevailing party.” He contends that he
is a “prevailing party” because he has obtained some
relief on the merits of his claim and that the injunctive
relief altered the legal relationship between the
parties.

Il. Legal Standard for Relief under Fed. R.
Civ. P. 59(e)

Under Rule 59%e), “[mlotions . . . to alter or amend
a judgment must clearly establish either a manifest
error of law or fact or must present newly discovered
evidence.” Szmon v. United States, 891 F.2d 1154,
1159 (5 Cir. 1990) (citations omitted). Such motions
may not be used to relitigate issues that were resolved
to the movant’s dissatisfaction. Forsythe v. Saudi
Arabian Airlines Corp., 885 F.2d 285, 289 (5" Cir.
1989). A Rule 59 motion may not be used to relitigate
old matters, raise arguments, or present evidence that
could have been raised prior to entry of judgment. See

28a

generally 11 C. WRIGHT, A. MILLER & M. KANE
§ 2810.1 at 127-28 (2d ed. 1995); see also Simon, 891
F.2d at 1159. With respect to newly discovered
evidence, a court may not grant such a motion unless
the movant establishes: “(1) the facts discovered are of
such a nature that they would probably change the
outcome; (2) the alleged facts are actually newly
discovered and could not have been discovered earlier
by proper diligence; and (3) the facts are not merely
cumulative or impeaching.” Infusion Resources, Inc. v.
Minimed, Inc., 351 F.3d 688, 696-97 (5" Cir. 2003).
District courts have “considerable discretion in
deciding whether to grant or deny a motion to alter a
judgment.” Hale v. Townley, 45 F.3d 914, 921 (5™ Cir.
1995). In exercising this discretion, a district court
must “strike the proper balance between the need for
finality and the need to render just decisions on the
basis of all the facts.” Jd. With this balance in mind,
the Fifth Circuit has observed that Rule 59(e) “favor|s]
the denial of motions to alter or amend a judgment.”
Southern Constructors Group, Inc. v. Dynalectric Co.,

2 F.3d 606, 611 (5 Cir. 1993).

Il. Analysis

The City premises its argument that Dearmore is
not a “prevailing party” on the Supreme Court’s
decision in Buckhannon Bd. and Care Home, Inc. v.
West Virginia Dep't of Health and Human Res., 532

29a

U.S. 598 (2001), which rejected the “catalyst theory”
as a permissible basis to award attorney’s fees under
a federal fee-shifting statute. The City is the party
shat asserts Dearmore is seeking to establish
“prevailing party” status through the “catalyst theory.”
Dearmore makes no such assertion. The question
presented to the Court in Buckhannon was whether
the term “prevailing party” “includes a party that has
failed to secure a judgment on the merits or a court-
ordered consent decree, but has nonetheless achieved
the desired result because the lawsuit brought about
a voluntary change in the defendant’s conduct.” Id. at
600. For the reasons set forth herein, the court
believes that the City reads Buckhannon much too
broadly, and the “catalyst theory” is not the basis on
which Dearmore would be considered a “prevailing
party” under the specific facts of this case.

In Buckhannon, the state fire marshal issued
citations to a number of residential-care facilities for
allegedly violating a state law which required all
residents of residential board and care homes to be
capable of “self-preservation,” or be capable of moving
themselves from situations which presented imminent
danger. These citations, or “cease-and-desist” orders,
required the residential care facilities to close their

* Under the “catalyst theory,” “a plaintiff is a ‘prevailing party’ if
{such plaintiff] achieves the desired result because the lawsuit
brought about a voluntary change in the defendant’s conduct.”
Buckhannon, 532 U.S. at 601.

* Since Dearmore filed this action pursuant to 42 U.S.C. § 1983,
the applicable fee-shifting statute to determine whether he is a
“prevailing party” is 42 U.S.C. § 1988(b). See 42 U.S.C. § 1988(b).

30a

facilities within 30 days of the issuance of citation. A
lawsuit ensued on behalf of a number of the facilities
against the State of West Virginia, two of its agencies,
and eighteen individuals. Defendants agreed to stay
enforcement of the cease-and-desist orders, and the
parties proceeded to take discovery. The following
year, the state legislature deleted the “self-
preservation” requirement in the statute. After the
district court dismissed the action for mootness, the
residential-care facilities sought attorney’s fees under
the “catalyst theory.” Jd. at 600-01. The Court
ultimately held that the “catalyst theory” was not “a
permissible basis for the award of attorney’s fees”
under the two federal statutes in question. Jd. at 610.

As the Court recognized, “a ‘prevailing party’ is one
who has been awarded some relief by the court.” Jd. at
603. The City acknowledges that neither the Supreme
Court nor the Fifth Circuit has addressed whether a
preliminary injunction creates a sufficient material
alteration of the legal relationship between the parties
to allow a determination that a plaintiff qualifies as a
“prevailing party.” The court determines that the
preliminary injunction obtained by Dearmore in this
case satisfies the “prevailing party” standard.

The City is correct that the preliminary injunction
never became effective because no bond was posted by
Plaintiffs. According to the City, Dearmore failed to
take the necessary steps to effectuate any changes
made possible through the injunction. The City argues
that the legal relationship between the parties was
never materially altered because Dearmore was never
entitled to enforce the injunction against the City.

3la

This argument is fundamentally flawed, is
disingenuous, and reflects “dirty pool” on the part of
the City. The record amply reveals that Dearmore did
not seek to post a bond on the preliminary injunction
because the City’s legal counsel told and convinced
Dearmore’s counsel that no injunction was necessary,
as the City would amend the Ordinance to address the
court’s concerns. The City’s counsel does not dispute
that he made this statement or representation to
Dearmore’s counsel. Dearmore’s counsel relied on this
representation, and that the City now seeks to use it
to Dearmore’s detriment is simply astounding. The
essence of this is that the City did not want the
preliminary injunction to become effective; so its legal
counsel informed Dearmore’s counsel] that the City
would change the Ordinance to delete the
constitutionally offensive provisions. Based on the
representation of the City’s legal counsel to
Dearmore’s counsel, Dearmore’s action in not posting
a bond was quite reasonable. Under these
circumstances, rather than incur’ unnecessary
expenses and increase litigation costs, Dearmore,
through his counsel, “took the City’s counsel at his
word.” The court can think of no reason to increase
litigation costs unnecessarily, or engage in needless
litigation.

Contrary to its assertions, the City did not
voluntary change or amend the Ordinance; it changed
the Ordinance because of the court’s Memorandum
Opinion and Order and Preliminary Injunction. The
totality of the court’s opinion and its tone apprised the
parties that certain provisions of the Ordinance were
clearly offensive to the United States Constitution and
would not pass constitutional muster. While it is true

32a

that the court stated, “[blecause the Ordinance does
not allow the landlord an opportunity to refuse
consent, or include a warrant procedure if consent is
refused, section 32.09(F) of the Ordinance is likely to
be held unconstitutional,” see Memorandum Opinion
and Order and Preliminary Injunction at 15, that
language was used to conform to the standard
necessary for the issuance of a preliminary injunction.
The court certainly could have used much stronger
language, and, in retrospect, it should have, but the
court used euphemistic language in part of its ruling
to “let the City down easy.” If this was a mistake, the
court assures the City it will not happen again.
Moreover, the language to which the City refers cannot
be read in a vacuum. Other parts of the court’s
opinion unequivocally put the City on notice that the
Ordinance was constitutionally infirm. Specifically,
the court stated:

Inspections and searches of unoccupied property
would clearly infringe on the property owner’s
right under the Fourth Amendment to the
United States Constitution to be free from
unreasonable search and seizure. In these
limited situations, where the property is
unoccupied, the protections guaranteed by the
Fourth Amendment to the United States
Constitution to the property owner outweigh
any interest that the government has in
protecting the health, safety or welfare of the
public. If it becomes necessary to inspect
unoccupied properties, the City could readily,
with a modicum of effort, obtain an
administrative search warrant to inspect any
property that may pose a danger to the public.

33a

The ease with which the City could acquire an
administrative search warrant makes
unnecessary the need for the City to require
property owners to forego in advance their
rights guaranteed by the Fourth Amendment.
The court fully understands that the City has a
valid and important governmental interest in
protecting the public, however, the court sees no
reason why this should be done at the expense
of infringing on rights guaranteed by the Fourth
Amendment to the United States Constitution.

Memorandum Opinion and Order and Preliminary
Injunction at 14. The City was aware of its soon-to-be
unpleasant fate, which is why it acted with dispatch to
amend the Ordinance.® Under these circumstances, it
strains credulity and requires a quantum leap of logic
to assert that the City voluntarily changed the
Ordinance.

The situation here is quite different from that
which faced the parties in Buckhannon. In
Buckhannon, there was no judicial determination or
grant of injunctive relief, as in this case, to cause a
party to modify its conduct. In Buckhannon, the

° Twelve days is a short period of time for the council to act and
pass an ordinance, considering that City officials had to discuss
the proposed Ordinance among themselves, brief the Garland City
Council at some point on the amended Ordinance, place it on the
agenda for official council action, and post notice of the meeting
and the agenda to the public at least 72 hours before the start of
the meeting at which the council would take official action on the
proposed Ordinance. See Tex. Gov’t Code Ann. § 551.043 (Vernon
Supp. 2005)

34a

defendants ceased their allegedly improper conduct by
agreement merely because a lawsuit had been filed,
not because of judicial intervention. This court has an
extremely difficult time comprehending how the City
can characterize conduct as “voluntary” when a ruling
makes clear that the Ordinance is constitutionally
infirm and it acts immediately to address the court’s
concerns and rectify the constitutionally repugnant
provisions. Stated another way, but for this court’s
ruling and granting the preliminary injunction, the
City would not have acted to delete the offensive
portions of the Ordinance. Accordingly, the necessary
judicial imprimatur is present in this case for
Dearmore to meet the standard for a “prevailing
party.” It was not present in Buckhannon. Moreover,
as a result of the court’s ruling and the City acting in
direct response to that ruling, Dearmore obtained
what he sought — relief from the Ordinance which
violated the Constitution. There is no doubt that the
relationship between Dearmore and the City has been
materially altered. To say otherwise merely exalts
form over substance.

The court fully recognizes that a preliminary
injunction is ordinarily not a decision on the merits;
but in this case, it is the functional equivalent of a
ruling on the merits because of the manner and the
circumstances under which the City amended the
Ordinance. As previously stated, the City, as any
intelligent party would, saw “the handwriting on the
wall” in light of the court’s opinion and injunction.
There is no doubt in the court’s mind that the City
resorted to the use of legal legerdemain in an effort to
avoid the inevitable and, in the process, convinced
Dearmore that he need not take steps to make the

35a

injunction effective by posting a bond because the City
was going to amend its Ordinance to make it
constitutionally sound. Rather than press the court to
expedite or advance the trial on the merits, Dearmore
graciously relied on the City’s assurance that it would
amend the Ordinance, which would moot the case.
This is precisely what happened in Palmetto
Properties, Inc. v. County of Dupage, 375 F.3d 542 (7"
Cir. 2004), after the court had granted a motion for
partial summary judgment.® The county contended
that Palmetto was not a “prevailing party” because the
partial summary judgment never became final or
enforceable, as the case was dismissed for mootness.
Id. at 549. The Seventh Circuit did not accept the
county’s argument, determined that Palmetto was a
“prevailing party,” and refused to reverse the district
court’s award of attorney’s fees. Jd. at 550. The court
finds this reasoning solid and equally applicable to the
facts of this case.

On occasion, the City has attempted to minimize
the effect and importance of the court’s ruling by
referring to it as a “preliminary opinion.” The court’s
ruling was “preliminary” only in the sense that it dealt
with a preliminary injunction. The facts of this case
were undisputed, and the only matters to resolve were
the legal issues. The court’s Memorandum Opinion
and Order and Preliminary Injunction made a
substantive determination regarding the
unconstitutionality of certain provisions of the

® That Palmetto involved a partial summary judgment and this
case involves a preliminary injunction is really of no moment,
given the special circumstances of this case.

36a

Ordinance and left no doubt as to the resolution of the
legal issues. The City knew this, which is why it
pursued the course of action it did in amending the
Ordinance.

Finally, the City contends that it was not given
proper notice before the court granted the preliminary
injunction and that the propriety of the preliminary
injunction was “legally problematic.” Specifically, the
City conterids that it was not given an opportunity “to
fully present its views on the merits of the legal issues
addressed by the Court’s Preliminary Injunction.” City
of Garland’s Rule 59(e) Motion to Amend Judgment at
6.

The court does not understand the basis for this
argument. The City, as reflected in its motion to
amend judgment, knew that Dearmore sought to
enjoin enforcement of the Ordinance in question.
Moreover, as the City correctly points out, after the
court initially denied Plaintiffs Request for Temporary
Restraining Order, Dearmore filed an amended motion
for a temporary restraining order and requested the
court to reconsider its earlier denial of the temporary
restraining order, or hold an expedited preliminary
injunction hearing. As the City acknowledges, the
court held a hearing on Dearmore’s request on July 6,
2005. The City, of course, received notice that the
hearing would take place and attended the hearing.
The City had a chance to present its views. The court
questioned both sides with respect to the
constitutionality of the Ordinance at the héaring and
allowed the parties ample time to address the motion

37a

to dismiss, as the request for injunctive relief and the
motion to dismiss necessarily had overlapping issues.’

The City relies on Kaepa, Inc. v. Achilles Corp., 76
F.3d 624 (5 Cir. 1996), to support its lack of notice
argument. This reliance, however, is misplaced. In
Kaepa, the court stated:

Rule 65(a)(1) provides that “[nJo preliminary
injunction shall be issued without notice to the
adverse party.” We have interpreted the notice
requirement of Rule 65(a)(2) to mean that
“where factual. disputes are presented, the
parties must be given a fair opportunity and a
meaningful hearing to present their differing
versions of those facts before a preliminary
injunction may be granted.” If no factual
dispute is involved, however, no oral hearing is
required; under such circumstances the parties
need only be given “ample opportunity to
present their respective views of the legal issues
involved.”

Id. at 628 (footnote and citations omitted). In this
case, the material facts were not in dispute. The
issues to be decided were strictly legal in nature. Had
it been clear to the court initially that there were no
disputed facts, it would have not held a hearing, and
would have decided the matter strictly on the written

"Frankly, the court was disappointed by the dearth of briefing by
the parties on the Fourth Amerdment issue. The court essentially
did its own research regarding the constitutionality of the
Ordinance.

38a

submissions of the parties. Since the parties did not
present differing versions of the facts, no oral hearing
was even necessary. As the record reflects, both sides
had ample opportunity to submit their respective
views of the legal issues involved, whether on the
request for injunctive relief or the motion to dismiss

Further, the court determines that the City has
forfeited its right to raise any issues — procedurally or
subsvantively — regarding the propriety of the
preliminary injunction. When the preliminary
injunction was granted, the City could have requested
the court to reconsider its ruling, appealed to the Fifth
Circuit pursuant to 28 U.S.C. § 1292(a)(1) and Fed. R.
App. P. 4(a), or continued to challenge the injunctive
relief at the district court level and appeal the final
judgment. The City did none of these, and it is too late
to do so at this juncture. Rather than raising
questions related to the legality of the preliminary
injunction, the City discouraged Dearmore’s counsel
from posting a bond and sought an immediate
amendment to the Ordinance to remove the
constitutionally repugnant language. The City
accepted the court’s ruling regarding the preliminary
injunction, and did not exercise other options which
could easily have addressed and preserved any
substantive or procedural challenges it desired to
make regarding the preliminary injunction. For these
reasons, the court concludes that the City has forfeited
any right to challenge the issuance of the preliminary
injunction.®

* Although courts often use “forfeiture” and “waiver”
interchangeably, the court believes “forfeiture,” rather than

39a

IV. Mootness

On May 24, 2006, the court issued an order and
directed the parties to submit supplemental briefing
on the issue of mootness. The court ordered the
supplemental briefing because of remarks made by the
City’s counsel at one of the hearings. In discussing
that the legal relationship between the parties had not
been materially altered, the City’s counsel stated that
the City could, if it chose, re-enact the Ordinance made
the basis of this lawsuit. This statement by counsel
caused the court some concern because it was not
“absolutely clear that the allegedly wrongful behavior
could not reasonably be expected to recur.” Friends of
Earth, Inc. v. Laidlaw Envtl. Servs., Inc.,528 U.S. 167,
189 (2000). The question in the court’s mind was
whether, in light of the statement, this case was really
moot. The court, because of the decision it has reached
regarding “prevailing party,” finds it unnecessary to
revisit the issue of mootness.

Vz. Conclusion

If this were a “catalyst theory” case as the City
contends, the court agrees that Buckhannon controls.
The court, however, for the reasons previously stated,
believes that this case ts not a “catalyst theory” case,

“waiver,” is the appropriate term to describe the City’s actions.
“Forfeiture” is the “failure to make timely assertion of a right,”
and “waiver” is the “intentional relinquishment or abandonment
of a known right.” United States v. Olano, 507 U.S. 725, 733
(1993) (citations omitted); Douglas v. United Servs. Auto. Ass’n, 79
F.3d 1415, 1420 (5 Cir. 1996).

40a

and therefore Buckhannon has limited use and
application. If the City’s conduct in amending the
Ordinance can be termed “voluntary,” both Black’s
Law Dictionary (8" ed.) and Merriam-Webster’s
Collegiate Dictionary (11™ ed.) need to update their
respective dictionaries to add a new definition for the
meaning of “voluntary.” If the City is going to prevail
on its argument, it will have to do so at the appellate
level, because its approach, as far as this court is
concerned, deprives section 1988(b) of all vitality in
cases with the same or substantially similar facts as
those present in this case.

This court simply does not accept the legal theory
that a preliminary injunction can never give rise to
“prevailing party” status. The City appears to embrace
this theory. Under this approach, no matter how
unconstitutionally egregious the enjoined violation or
conduct, a governmental entity can readily escape
liability, costs, and attorney’s fees by simply amending
an ordinance to remove the constitutionally offensive
provisions and thereby moot the action. This is
precisely what we have in this case. The court has
seen nothing to indicate that Congress intended such
a scheme when it enacted 42 U.S.C. § 1988(b), or that
Congress intended for courts to discard common sense
and fairness to reach absurd legal results.

For the reasons stated herein, the court determines
that Dearmore has obtained the necessary relief to
establish that he is a “prevailing party.” The City has
failed to meet the necessary standard to justify an
amendment of the court’s judgment or order issued on
November 30, 2005. Accordingly, the court denies
Defendant’s Rule 59(e) Motion to Amend Judgment.

4la

The only pending motion is that for attorney’s fees
filed by Dearmore. As stated previously, “ja} request
for attorney’s fees should not result in a second major
litigation.” Hensley v. Eckerhart, 461 U.S. 424, 437
(1983). The parties, through counsel, are ordered to
confer and make every reasonable effort to resolve the
matter of attorney’s fees without court intervention.
From what the court can ascertain from previous
communications between the parties, the amount of
attorneys fees is small, and there had been some
stipulation regarding attorney’s fees. This matter
needs to be resolved.? The parties are therefore
directed to inform the court in writing by September
7, 2006 whether they are able to resolve the attorney’s
fees issue. If not, the court will proceed to issue a
separate order pursuant to Fed. R. Civ. P. 58 on the
issue of attorney’s fees.

It is so ordered this 29" day of August, 2006.

/s/
Sam A. Lindsay
United States District Judge

*Ifthe City wishes to appeal the merits of the court’s ruling, the
parties can still stipulate to the amount of attorney’s fees and
make their stipulation subject to what happens on appeal.

42a

APPENDIY D

IN THE UNITED STATES DISTRICT COURT
FOR. THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
Civil Action No. 3:05-CV-1231-L

[Filed November 30, 2005]

ROY DEARMORE, individually and as
Representative of all owners of Single
Family residential property in Garland
Texas, MARIE COMBS, individually

and as Representative of all tenants of
Single Family residential property in
Garland, Texas, and A. C. BLAIR,
individually and as Representative of

all property managers in Garland, Texas,

Plaintiffs,
Vv.
CITY OF GARLAND,

Defendant.

ee ee ee

ORDER

43a

Before the court is the City of Garland’s Motion to
Dismiss as Moot, filed November 16, 2005. After
careful consideration of the motion and the record in
this case, the court grants the City of Garland’s
Motion to Dismiss as Moot. On November 3, 2005, the
court in its Memorandum Opinion and Order granted
Plaintiff Roy Dearmore’s request for a preliminary
injunction as to Garland, Tex., Code of Ordinances ch.
32, § 32.09(F). That section of the Ordinance required
a person who rents or leases a single-family dwelling
to allow an inspection of the rental property as a
condition of issuing a permit, and criminally penalized
a lessor for refusing to allow an inspection.

On November 15, 2005, the City of Garland
amended Section 32.09(F), removing the requirements
that a landlord consent to a warrantless inspection
and that a person who rents or leases a single-family
dwelling allow an inspection of the rental property as
a condition of issuing a permit. On November 21,
2005, the court’s law clerk conferred with counsel for
the parties, and the parties agreed that the only
outstanding issue is that of attorney’s fees. The court
determines that Plaintiff Roy Dearmore is a prevailing
party to the extent that the court declared Section
32.09(F) of the Ordinance to be in violation of the
Fourth Amendment to the United States Constitution.
Dearmore is therefore entitled to reasonable attorney’s
fees on this claim. Any request for attorney’s fees shall
be filed in accordance with Fed. R. Civ. P. 54(d)(2). The
court also determines that the matter of attorney’s fees
can be addressed postjudgment pursuant to Fed. R.
Civ. P. 54(d)(2). Regarding attorney’s fees, the
Supreme Court has strongly admonished that “[a]
request for attorney’s fees should not result in a second

44a

major litigation.” Hensley v. Eckerhart, 461 US. 424,
437 (1983). Accordingly, the parties shall confer and
make every reasonable effort to resolve the matter of
attorney’s fees without court intervention.

In light of the court’s Memorandum Opinion and
Order of November 3, 2005, the city’s subsequent
action in amending and removing the enjoined section
of the Ordinance, and the parties’ agreement regarding
matters remaining for adjudication, the court grants
the City of Garland’s Motion to Dismiss as Moot,
dissolves the preliminary injunction issued on
November 3, 2005, and dismisses this action with
prejudice. The court will issue judgment by separate
document as required by Fed. R. Civ. P. 58. Any
application for attorneys fees must be filed
postjudgment in accordance with Fed. R. Civ. P.
54(d)(2). The response and reply shall be filed in
accordance with the local civil rules of ths district.

It is so ordered this 30th day of November, 2005.

Is/
Sam A. Lindsay
United States District Judge

* While the court dissolves the preliminary injunction, Plaintiffs
shall have the right to seek judicial relief if the removed provision
of the Ordinance is reinstated, or a similar provision is adopted by
the City. Further, although the court issued a preliminary
injunction, it never became effective because Plaintiff Dearmore
never posted a bond as required by the court.

‘45a

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
Civil Action No. 3:05-CV-1231-L

[Filed November 30, 2005]

ROY DEARMORE, individually and as
Representative of all owners of Single
Family residential property in Garland
Texas, MARIE COMBS, individually

and as Representative of all tenants of
Single Family residential property in
Garland, Texas, and A. C. BLAIR,
individually and as Representative of

all property managers in Garland, Texas,

Plaintiffs,
v.
CITY OF GARLAND,

Defendant.

mee Ne eee eee Ne”

JUDGMENT

This judgment is issued pursuant to the court’s
Memorandum Opinion and Order of November 3,
2005; and the court’s order of November 30, 2005. By
its opinion and order of November 3, 2005, the court
granted Plaintiff Roy Dearmore’s request for a
preliminary injunction as to Garland, Tex., Code of

46a

Ordinances ch. 32, § 32.09(F). That provision required
a person who rents or leases a single-family dwelling
to allow an inspection of the rental property as a
condition of issuing a permit; and criminally penalized
a lessor for refusing to allow an inspection. As a result
of the court’s opinion and order, the City of Garland
amended its Ordinance and removed the offensive
provision, thereby mooting the case or controversy and
rendering the injunction unnecessary. The court
dissolved the injunction because of the City of
Garland’s corrective action.’ In light of the
Memorandum Opinion and Order, the action taken by
the City of Garland, and the court’s subsequent order
of November 30, 2005, no case or controversy exists
between the parties.

It is therefore ORDERED, ADJUDGED, and
DECREED that this action is dismissed with
prejudice;’ that all relief not expressly granted herein
is denied, except for any claim regarding attorney’s
fees; and that all allowable and reasonable costs are
taxed against the City of Garland.

Signed this 30th day of November, 2005.

' The injunction never became effective because Plaintiff
Dearmore never posted bond as ordered by the court.

* Although the,court dismisses this action with prejudice, nothing
herein shall preclude Plaintiffs from seeking judicial review ifthe
City of Garland seeks to reinstate the section of the Ordinance
that the court declared unconstitutional, or implements an
ordinance of similar import to that declared unconstitutional by
the court.

47a

_ EEG ECL aT RI
Sam A. Lindsay
United States District Judge

48a

APPENDIX E

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
Civil Action No. 3:05-CV-1231-L

[Filed November 3, 2005]

ROY DEARMORE, individually and as
Representative of all owners of Single
Family residential property in Garland
Texas, MARIE COMBS, individually

and as Representative of al! tenants of
Single Family residential property in
Garland, Texas, and A. C. BLAIR,
individually and as Representative of

all property managers in Garland, ‘Texas,

Plaintiffs,
v.
CITY OF GARLAND,

Defendant.

;
ed

MEMORANDUM OPINION AND ORDER AND
PRELIMINARY INJUNCTION

49a

Before the court is Plaintiff Roy Dearmore’s
Amended Motion for Temporary Restraining Order
and Motion to Reconsider Court’s Denial of Temporary
Restraining Order, filed July 1, 2005;' and Defendant
City of Garland’s Motion to Dismiss for Want of
Subject Matter Jurisdiction (12(b)(1)) and for Failure
to State a Claim (12(b)(6)), filed July 6, 2005. After
careful consideration of the request for injunction, the
testimony given at the preliminary injunction hearing,
argument of counsel, the motions and briefs, response,
reply and applicable law, the court grants in part
Plaintiff's request for a preliminary injunction; denies
as moot Plaintiff's Amended Motion for ‘Temporary
Restraining Order and Motion to Reconsider Court’s
Denial of Temporary Restraining Order; denies as
moot City of Garland’s Motion to Dismiss for Want of
Subject Matter Jurisdiction (12(b)(1)); and grants in
part and denies in part City of Garland’s Motion to
Dismiss for Failure to State a Claim (12(b)(6)).

I. Factual and Procedural Background

Plaintiff Roy Dearmore (“Dearmore” or “Plaintiff”’)
filed this action pursuant to 42 U.S.C. § 1983 against
Defendant City of Garland (the “City” or “Defendant”)

‘In his motion, Plaintiff requests a temporary restraining order
and also a hearing on a preliminary injunction. In his First
Amended Complaint, Plaintiff requests a preliminary injunction
against enforcement of the ordinance until a final hearing on the
merits of the case. The court therefore treats Plaintiff's motion as
a metion for preliminary injunction.

50a

on June 16, 2005.2 Dearmore requests the court to
enjoin the City from enforcing City Ordinance No.
5895 (the “Ordinance”) which amends the City’s
Minimum Housing Code. Dearmore contends that he
will suffer irreparable injury if the City is not enjoined.
He maintains that the Ordinance violates his Fourth
Amendment right by: (1) authorizing warrantless
searches of private homes; (2) failing to provide a
mechanism to notify the tenant, property owner or
property manager of his or her right to refuse to allow
the search; and (3) requiring the applicant to disclose
private information that violates the right to privacy.
Dearmore further contends that the City has violated
the Fourteenth Amendment.*

Dearmore owns four properties in the City that he
rents to various tenants. The City adopted the
Ordinance on April 19, 2005. The Ordinance provides
two separate and distinct criteria for the permitting of
rental property in the City. Section 32.07 provides the
criteria for obtaining a Multifamily License —
necessary to lease “three or more residential dwelling
units to another person or persons which are part of a
multifamily dwelling.” Garland, Tex., Code of
Ordinances ch. 32, § 32.07 (2005). Section 32.09
provides the criteria for obtaining a Single Family

* Dearmore amended his complaint on July 15, 2005, adding
Marie Combs and A.C. Blair as Plaintiffs.

* Deamore asserts that his Fourth Amendment claim is applicable
to the State via the Fourteenth Amendment. In his Original
Complaint, Dearmore also asserted that the Ordinance violated
the Fifth Amendment. This claim is omitted in his First Amended
Complaint; therefore, it is not before the court.

5la

Permit — necessary to rent or lease “a single-family
residential dwelling.” Id. § 32.09 (2005).

To obtain a Single Family Permit, the Ordinance
requires a person or entity that owns one or more rent
houses to: (1) submit an application to operate each
rental property; (2) pay the appropriate fee ($65); and
(3) post and display the permit in a visible location
inside the rental property. Jd. § 32.09(B)(D). The
application and permit fee are to be paid no later than
60 days from the effective date of the Ordinance. Id.
§ 32.09(C). The application is to include the name,
address, telephone number and driver’s license
number of the owner, tenant and property manager.
Id. § 32.09(B)(1)(aXc). As a condition of the permit, the
City will inspect the property a least once a year.
Failure of an owner, who is not a resident at the
property, to allow an inspection is an offense. Id.
§ 32.09(F)(1)(3). When consent to inspect has been
refused or cannot be obtained, the City is authorized to
obtain a search warrant to conduct an inspection. /d.
§ 32.09(F)(4). This section also provides that:

[Nlo search warrant shall be obtained without
probable cause to believe that a fire or health
hazard or violation or unsafe building condition
is present on the premises sought to be
inspected. A search warrant is not authorized
based solely upon the failure of an owner to
obtain a permit under this section.

Id.

Dearmore received a letter from the Garland
Health Department Code Compliance Division, dated

52a

June 10, 2005, advising him of the adoption of the
Ordinance and its permit and inspection requirements.
The letter stated that owners of rent houses are
required to “allow the Health Department access to the
exterior and interior of the home for the purposes of
determining compliance with all applicable sections of
the Code.” Affidavit of Roy Dearmore, Exhibit A. The
letter also stated that “[als a rule, owners will be given
a three to seven day notice of the initial inspection to
facilitate scheduling the inspection.” Jd. The letter
further stated that “[t]he compliance deadline for
submitting a complete application and paying the
permit fee is July 11, 2005. Failure to comply with the
permit application deadline will result in the issuance
of Class C misdemeanor citations carrying fines [] from

$100 to $2000 per day.” Id.

* Section 2 of the Ordinance provides that “[A] violation of any
provision of this Ordinance shall be a misdemeanor punishable in
accordance with Sec. 10.05 of the Code of Ordinances of the City
of Garland, Texas.” Section 10.05 of the Code of Ordinances
provides:

Whenever in this [Code or in any ordinance of the City an
act is prohibited, or is made or declared to be unlawful, or
an offense or a misdemeanor, or wherever in such Code or
ordinance the doing of any act is required, or the failure
to do any act is declared to be unlawful, the violation of
any such provision of this Code or any such ordinance
shall be punished by a fine of not exceeding two thousand
dollars ($2,000.00). ... Fach day or portion of a day any
violation of this code or any ordinance shall continue or
occur shall constitute a separate offense.

Garland, Tex., Code of Ordinances ch. 10, § 10.05 (2005).

53a

Dearmore filed his Original Complaint and Request
for Temporary Preliminary and Permanent Injunctive
Relief on June 16, 2005. He also filed a Motion for
Temporary Restraining Order. The court denied
without prejudice Dearmore’s Motion for Temporary
Restraining Order. The court determined that
Dearmore failed to meet all the prerequisites for a
temporary restraining order. On July 1, 2005,
Dearmore filed his Amended Motion for Temporary
Restraining Order and Motion to Reconsider Court’s
Denial of Temporary Restraining Order or in the
Alternative Request for Expedited Preliminary
Injunction Hearing.

The City filed its motion to dismiss on July 6, 2005.
The City contends that Dearmore has failed to allege
sufficient facts to establish the court’s subject matter
jurisdiction over his Fifth Amendment claims;’ failed
to allege sufficient facts to state a claim upon which
relief may be granted as to his substantive due process
claim under the Fourteenth Amendment; and failed to
establish that he has standing to assert his Fourth

° The City contends that Dearmore has failed to plead sufficient
facts to establish this court’s subject matter jurisdiction over bis
Fifth Amendment claims that his property has been taken without
just compensation and that the Ordinance violates his due process
rights. Dearmore amended his complaint on July 15, 2005, after
the City filed its motion to dismiss. See First Amended Original
Complaint, Docket No. 20. ‘The amended complaint does not
include a Fifth Amendment claim, and this claim is no longer
before the court. As the basis for the City’s motion to dismiss for
want of subject matter jurisdiction is Deamore’s Fifth Amendment
claim, the City of Garland’s Motion to Dismiss for Want of Subject
Matter Jurisdiction (12(b\1))is denied as moot.

54a

Amendment claim. A preliminary injunction hearing
was held on July 7, 2005. The court now considers the
request for injunctive relief and the motion to dismiss.

II. Applicable Standards of Law

A. Preliminary Injunction

There are four prerequisites for the extraordinary
relief of a temporary restraining order or preliminary
injunction. To prevail, Plaintiff must demonstrate: (i)
a substantial likelihood of success on the merits; (ii) a
substantial threat of immediate and irreparable harm,
for which he has no adequate remedy at law; (iii) that
greater injury will result from denying the temporary
restraining order than from its being granted; and (iv)
that a temporary restraining order will not disserve
the public interest. Clark v. Prichard, 812 F.2d 991,
993 (5™ Cir. 1987); Canal Auth. of the State of Florida
v. Callaway, 489 F.2d 567, 572 (5™ Cir. 1974) (en
banc). The party seeking such relief must satisfy a
cumulative burden of proving each of the four elements
enumerated before a temporary restraining order or
preliminary injunction can be granted. Mississippi
Power and Light Co. v. United Gas Pipeline, 760 F.2d
618, 621 (5 Cir. 1985); Clark, 812 F.2d at 993.
Otherwise stated, if a party fails to meet any of the
four requirements, the court cannot grant the
temporary restraining order or preliminary injunction.

B. Rule 12(b)(6) Failure to State a Claim

A motion to dismiss for failure to state a claim
under Fed. R. Civ. P. 12(b)(6) “is viewed with disfavor
and is rarely granted.” Lowrey v. Texas A&M Univ.

55a

Sys., 117 F.3d 242, 247 (5™ Cir. 1997). A district court
cannot dismiss a complaint, or any part of it, for
failure to state a claim upon which relief can be
granted “unless it appears beyond doubt that the
plaintiff can prove no set of facts in support of his
claim which would entitle him to relief.” Conley v.
Gibson, 355 U.S. 41, 45-46 (1957); Blackburn v. City of
Marshall, 42 F.3d 925, 931 (5 Cir. 1995). Stated
another way, “[a] court may dismiss a complaint only
if it is clear that no relief could be granted under any
set of facts that could be proved consistent with the
allegations.” Swierkiewicz v. Sorema, 534 U.S. 506,
512 (2002) (quoting Hishon v. King & Spalding, 467
U.S. 69, 73 (1984)). In reviewing a Rule 12(b)(6)
motion, the court must accept all well-pleaded facts in
the complaint as true and view them in the light most
favorable to the plaintiff. Baker v. Putnal, 75 F.3d
190, 196 (5 Cir. 1996). In ruling on such a motion,
the court cannot look beyond the pleadings. Id.; Spivey
v. Robertson, 197 F.3d 772, 774 (5 Cir. 1999), cert.
denied, 530 U.S. 1229 (2000). The pleadings include
the complaint and any documents attached to it.
Collins v. Morgan Stanley Dean Witter, 224 F.3d 496,
498-99 (5 Cir. 2000). Likewise, “[d]ocuments that a
defendant attaches to a motion to dismiss are
considered part of the pleadings if they are referred to
in the plaintiffs complaint and are central to [the
plaintiff's] claims.” Id. (quoting Venture Assocs. Corp.
v. Zenith Data Sys. Corp., 987 F.2d 429, 431 (7" Cir.
1993)). The ultimate question in a Rule 12(b)(6)
motion is whether the complaint states a valid cause
of action when it is v.>wed in the light most favorable
to the plaintiff and with every doubt resolved in favor
of the plaintiff. Lowrey, 117 F.3d at 247. A plaintiff,
however, must plead specific facts, not mere conclusory

56a

allegations, to avoid dismissal. Guidry v. Bank of
LaPlace, 954 F.2d 278, 281 (5 Cir. 1992).

III. Analysis

A. Introduction

Dearmore contends that the Ordinance violates the
Fourth Amendment by: (1) authorizing warrantless
searches of private homes; (2) failing to advise the
tenant or owner that he does not have to consent to a
search; and (3) requiring private information in the
application process. See First Amended Original
Complaint at 6-7. The City maintains that Dearmore’s
Fourth Amendment claims fail because he has failed
to allege sufficient facts to state a claim upon which
relief may be granted. Specifically, the City contends
that Dearmore: (1) has no standing to challenge the
Ordinance under the Fourth Amendment; (2) makes a
facial challenge to the Ordinance and the Ordinance is
facially valid; and (3) has failed to assert any facts to
demonstrate that he has a subjective expectation of
privacy in the property that he leases to third parties.

The Fourth Amendment provides that:

The right of the people to be secure in their
persons, houses, papers, and effects, against
unreasonable searches and seizures, shall not
be violated, and no Warrants shall issue, but
upon probable cause, supported by Oath or
affirmation, and particularly describing the

57a

place to be searched, and the persons or things
to be seized.

U.S. Const. amend. IV.

B. Standing

A party has standing if: (1) he has suffered a
“concrete and particularized” injury that is actual or
imminent rather than conjectural or hypothetical; (2)
there is a causal relationship between the injury and
the challenged conduct; and (3) it is likely and not
merely speculative that the injury will be redressed by
a favorable decision. Lujan v. Defenders of Wildlife,
504 U.S. 555, 560-61 (1992); Westfall v. Miller, 77 F.3d
868, 871 (5" Cir. 1996). The City contends that
Dearmore does not have standing because he, as a
non-resident landlord, does not have a reasonable
expectation of privacy in residential property leased to
a tenant, and he is not required to give consent for the
tenant. The court agrees that the property owner has
no expectation of privacy if the property is leased. See
United States v. Dyar, 574 F.3d 1385, 1390 (5™ Cir.
1978), cert. denied, 439 U.S. 982, 99 (1978) (an owner
of a leasehold interest in an aircraft had no
expectation of privacy, and therefore lacked standing,
when possession of the aircraft was given to another).
If, however, the rental property is not occupied, the
only logical person who would have standing and an
expectation of privacy would be the owner of the
property. The property owner therefore has not
relinquished his standing or expectation of privacy in
situations where the property is not occupied.

58a

Moreover, a property owner’s rental property is
commercial property. Indeed, it would be fatuous to
argue otherwise, as rental property is property which
is put in the stream of commerce for economic
purposes. The Supreme Court has recognized that the
Fourth Amendment’s prohibition of unreasonable
search and seizures is applicable to commercial
premises as well as private residences. See New York
v. Burger, 482 U.S. 691, 699 (1987). As the court
stated in Burger:

An owner or operator of a business thus has an
expectation of privacy in commercial property,
which society is prepared to consider to be
reasonable. This expectation exists not only
with respect to traditional police searches
conducted for the gathering of criminal evidence
but also with respect to administrative
inspections designed to enforce regulatory
statutes.

Id. (internal citations omitted). Although Dearmore
does not reside at his rental properties, the court views
his ownership interest in his rental property as that of
the owner of a commercial business, as it is used for
commercial purposes. As such, he has a reasonable
expectation of privacy in his rental property. See v.
City of Seattle, 387 U.S. 541, 543 (1967). In that case,
the Court stated:

The b

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386020_0983%3A1. Public record. Not legal advice.