Recent Federal Fifth Circuit Cases of Interest to Cities

Note: Included cases are from January 1, 2024, through January 31, 2024.

Contracts: Am. Precision Ammunition, L.L.C. v. City of Mineral Wells, 90 F.4th 820 (5th Cir. 2024). In 2016, American Precision Ammunition (APA) and the City of Mineral Wells entered into a tax abatement agreement in which APA agreed to relocate to the city in exchange for the city providing 10 years of tax abatements. In addition, one of the terms in the agreement stated that the city would “gift” APA $150,000 toward the cost of its improvements to the new site that would be in the city limits. However, in 2017 after determining the payment would be an illegal gift in violation of Article III, section 52(a) of the Texas Constitution, the city council voted to terminate the agreement without paying APA the $150,000. APA sued the city for breach of contract, violating the Texas Open Meetings Act (TOMA), denial of federal due process, and denial of due course of state law under the Texas Constitution. After various motions were filed by the city and APA, the trial court ultimately: (1) dismissed with prejudice APA’s breach of contract, federal due process, and state law due course of law claims; (2) dismissed without prejudice APA’s TOMA claim as moot; and (3) entered a final judgment in favor of the city. After the trial court denied APA’s motion to alter or amend the final judgment dismissing its breach of contract claim, APA appealed.

The court of appeals, in affirming the lower court, determined that the city’s contract provision to “gift” APA $150,000 constituted a gratuitous payment of public funds thereby rendering the contract illegal under the Texas Constitution. Reaching this conclusion, the court considered the plain meaning of the terms of the agreement which continuously referred to the $150,000 as a gift or a “voluntary transfer of property to another without compensation” according to Black’s Law Dictionary. In addition, the court found no consideration built into the agreement in exchange for the $150,000. In holding that the city’s agreement was illegal, the court also affirmed the trial court’s decision to dismiss APA’s TOMA claim as moot. Lastly, the court addressed APA’s Fourteenth Amendment and state law due course of law claims. APA argued that the notice-and-cure provision in the agreement created a protected property interest in the $150,000 and the tax abatements. However, the court reiterated that because the gift was illegal under the Texas Constitution, APA could not have a protected property interest in it. And as for the tax abatements, APA was afforded due process and due course of law through its breach of contract lawsuit.

Civil Rights: Johnson v. City of San Antonio, No. 23-50476, 2024 WL 50463 (5th Cir. Jan. 4, 2024). April A’Mynae Roberts sued the city of San Antonio and three of its police officers for falsely arresting her and using excessive force after a birthday party in which an altercation broke out. In her suit against the City of San Antonio, she argued the city violated 42 U.S.C. § 1983 by negligently hiring, retaining, supervising, and training its officers. In addition, Roberts brought state law claims against the city involving intentional infliction of emotional distress as well as negligent hiring, supervision, training, and retention.

At the trial court level, Roberts’s state law and § 1983 claims against the city were ultimately dismissed. Roberts appealed the court’s decision and argued that, as to the § 1983 claims, there were genuine disputes of material fact. However, in affirming the district court, the Fifth Circuit concluded that because a previous panel of the court determined Roberts suffered no constitutional harm, city liability under § 1983 could not be established utilizing the Monell framework which requires the plaintiff to “show that (1) an official policy (2) promulgated by the municipal policymaker (3) was the moving force behind the violation of a constitutional right.” As for the state law claims, the Fifth Circuit agreed with the city that because the Texas Tort Claims Act (TTCA) does not waive a city’s immunity for intentional torts such as intentional infliction of emotional distress, the city was entitled to judgment as a matter of law. In addition, the court held that Roberts’s claim for negligent hiring, supervision, and training was barred because she failed to show that physical property was used in causing the injuries she sustained, as required by the TTCA.

Qualified Immunity: Villarreal v. City of Laredo, Tex., No. 20-40359, 2024 WL 244359 (5th Cir. Jan. 23, 2024). In 2017, Priscilla Villarreal, a citizen journalist, was arrested by City of Laredo Police Department (LPD) officers for misuse of official information in violation of Texas Penal Code Section 39.06(c). Under this provision, “a person commits an offense if, with intent to obtain a benefit…he solicits or receives from a public servant information that: (1) the public servant has access to by means of his office or employment; and (2) has not been made public.” Villarreal, through LPD Officer Barbara Goodman, received and posted on social media nonpublic information about a local suicide and traffic fatality. After her release, Villarreal filed for a writ of habeas corpus, arguing Section 39.06(c) was facially invalid. The district court in a bench ruling granted her petition and held that the statute was unconstitutionally vague.

Later in 2019, Villarreal sued, among other local officials, the City of Laredo, LPD officers, and the chief of police under 42 U.S.C. § 1983 alleging direct and retaliatory violations of free speech and freedom of the press, wrongful arrest and detention, selective enforcement in violation of equal protection, civil conspiracy, and supervisory and municipal liability. In response, the city officials filed a motion to dismiss to which the district court granted, dismissing all claims. Villarreal appealed the decision (as to the LPD officers and chief of police) to the Fifth Circuit, and a panel of the court initially reversed in part then later replaced its opinion with another but similarly concluded that defendants were not entitled to qualified immunity. The Fifth Circuit subsequently vacated the panel opinion, and the case was ordered to be reheard en banc.

In a split 9-7 decision, the court affirmed the district court’s ruling and held that the officers (and the other local officials) were entitled to qualified immunity. With regard to her claims based on violations of her Fourth Amendment rights, Villarreal was required to show that “(a) each defendant violated a constitutional right, and (b) the right at issue was ‘clearly established’ at the time of the alleged misconduct.” The court concluded that she failed to satisfy either prong because: (1) the police officers and other local officials took action to arrest Villarreal for violating Section 39.06(c) based on their reasonable belief that probable cause existed which was confirmed by a neutral magistrate; and (2) no clearly established precedent gave officials fair notice that their actions violated Villarreal’s constitutional rights or that the statute was unconstitutional. In response to her First Amendment retaliation and Fourteenth Amendment selective enforcement claims, the court determined Villarreal’s pleadings were insufficient because she failed to allege officers restricted her exercise of free speech and failed to provide examples of similarly situated individuals who were treated differently. Lastly, because the officers were held to be immune from suit, the court further held that Villarreal’s § 1983 conspiracy claim could not be sustained.