Porretto v. City of Galveston
Citation113 F.4th 469
Date Filed2024-08-21
Docket23-40035
Cited15 times
StatusPublished
Full Opinion (html_with_citations)
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United States Court of Appeals
for the Fifth Circuit
____________
United States Court of Appeals
Fifth Circuit
No. 23-40035 FILED
____________ August 21, 2024
Lyle W. Cayce
Sonya Porretto, Clerk
PlaintiffâAppellant,
versus
The City of Galveston Park Board of Trustees; The
City of Galveston, Texas; Texas General Land Office;
Dawn Buckingham, Commissioner of the Texas General Land Office,
DefendantsâAppellees.
______________________________
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 3:21-CV-359
______________________________
Before King, Jones, and Oldham, Circuit Judges. â
King, Circuit Judge:
Plaintiff-Appellant Sonya Porretto is the owner of Porretto Beach in
Galveston, Texas. In 2009, Porretto filed for bankruptcy in the U.S.
Bankruptcy Court for the Southern District of Texas, and her case was
converted to a Chapter 7 proceeding. In 2020, the trustee of Porrettoâs
bankruptcy estate abandoned the Porretto Beach property back to Porretto.
_____________________
â
Judge Oldham concurs in the judgment only.
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A year later, Porretto filed an adversarial lawsuit in the bankruptcy court
against the City of Galveston Park Board of Trustees (âPark Boardâ), the
City of Galveston, the Texas General Land Office (âGLOâ), and the
GLOâs Commissioner, alleging, inter alia, that Defendants-Appelleesâ
actions at Porretto Beach constituted takings without just compensation in
violation of the Fifth Amendment. Porrettoâs case was transferred to the U.S.
District Court for the Southern District of Texas, which dismissed Porrettoâs
lawsuit, concluding: (1) Porretto lacks standing to sue the GLO and its
Commissioner; (2) the court lacks bankruptcy jurisdiction under 28 U.S.C.
§ 1334; and (3) the court lacks federal question jurisdiction under28 U.S.C. § 1331
.
We agree with the district court that Porretto lacks standing to sue the
GLO and its Commissioner because her complaint fails to establish a causal
nexus between these Defendants-Appelleesâ actions and Porrettoâs alleged
injuries, but we note that this deficiency in Porrettoâs pleadings could
potentially be redressed via an amended complaint. Regarding Porrettoâs
remaining claims against the Park Board and the City of Galveston, we agree
with the district court that exercising bankruptcy jurisdiction under § 1334
would be improper here, but we conclude that the court does have federal
question jurisdiction over Porrettoâs constitutional claims.
Accordingly, we AFFIRM the district courtâs dismissal of
Porrettoâs claims against the GLO and its Commissioner without prejudice.
We VACATE the district courtâs dismissal of Porrettoâs remaining claims
against the Park Board and the City of Galveston, and we REMAND for the
district court to consider alternative arguments for dismissal in the first
instance, as well as the issue of supplemental jurisdiction over Porrettoâs
state law claims. We also AFFIRM the district courtâs decision to deny
Porretto leave to amend her complaint, though we note that Porretto may file
a motion for leave to amend on remand to address her complaintâs
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deficiencies if she so chooses. Finally, we AFFIRM the district courtâs order
denying Porrettoâs motion for recusal, and we DENY Porrettoâs request for
her case to be reassigned to a judge in the Houston Division on remand.
I.
A.
Plaintiff-Appellant Sonya Porretto is the owner of Porretto Beach, one
of the rare privately owned sections of the Texas coastline. Porretto Beach is
generally identified as the beach along the Galveston Seawall from 6th to 10th
(sometimes referred to as âPorretto Beach Classicâ), 11th to 12th, 14th to
16th, 19th to 21st, and 26th to 27th streets. In 2014, after years of litigation
between the Porretto family and the GLO, the Supreme Court of Texas
affirmed that the Porretto family owns the property conveyed to them that
lies landward of the âmean higher high tide line,â defined as âthe average of
highest daily water computed over or corrected to the regular tidal cycle of
18.6 years.â See Porretto v. Tex. Gen. Land Off., 448 S.W.3d 393, 395, 400
(Tex. 2014) (internal quotation omitted).
B.
In July 2009, Porretto filed a voluntary petition for Chapter 11
bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas.
Porretto claims that she was âforcedâ to file for Chapter 11 bankruptcy
because her ongoing litigation with the GLO made it impossible for her to
sell the Porretto Beach property. In December 2011, Porrettoâs bankruptcy
case was converted to a Chapter 7 proceeding, and a trustee was appointed.
On June 25, 2020, after the trustee was unable to close on sales of Porretto
Beach, the bankruptcy court issued an order abandoning the Porretto Beach
property, at which point âthe ownership and control of the Porretto Beach
property reverted to . . . Porretto.â Porrettoâs bankruptcy estate was deemed
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fully administered in April 2022, and the bankruptcy case was closed on June
22, 2022.
C.
On June 25, 2021, exactly one year after Porretto Beach was
abandoned to her, Porretto filed a lawsuit in the U.S. Bankruptcy Court for
the Southern District of Texas, naming as defendants the Park Board, the
City of Galveston, the GLO, and GLO Commissioner George P. Bush
(collectively, âDefendantsâ). 1 In her original complaint, Porretto asserted
that the bankruptcy court had jurisdiction pursuant to 28 U.S.C. § 1334(b),
because her claims arose under Title 11 or were related to Porrettoâs then-
active bankruptcy case.
In the operative third amended complaint, Porretto alleges that
Defendants have taken various actions to âlimit her use, control, and
operation of Porretto Beach.â Porretto first contends that Defendantsâ work
on the âStewart Beach Drainage Project,â a GLO-funded City project aimed
at improving drainage conditions at a public beach adjacent to Porretto
Beach, has caused, and continues to cause, flooding at Porretto Beach.
Porretto includes in her complaint several photos of construction crews
purportedly digging trenches and swales that diverted water toward Porretto
Beach.
Porretto also contends that the Park Board has excavated sand from
Porretto Beach, resulting in manufactured erosion data. She claims that this
erosion data is utilized by the Park Board to acquire federal and state
_____________________
1
Throughout this opinion, we refer to the Park Board and the City of Galveston
collectively as the âGalveston Defendants,â and the GLO and its Commissioner
collectively as the âGLO.â Dawn Buckingham currently serves as Commissioner of the
GLO and is listed as a Defendant-Appellee in the current appeal.
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renourishment funds. Porretto further alleges that during her bankruptcy
proceedings, the Park Board leased Porretto Beach to concessionaries and
referred to Porretto Beach as if it had authority to lease the property.
Porretto organizes her allegations against Defendants into fourteen
discrete causes of action:
⢠I) a Fifth Amendment claim for the taking of a flowage
easement without just compensation;
⢠II) a Fifth Amendment claim for the taking of âOther Property
Interestsâ without just compensation;
⢠III) an inverse condemnation claim under Texas law;
⢠IV) a Fifth Amendment takings claim for interference with
Porretto Beachâs accretion levels;
⢠V) a claim under Article I, Section 17 of the Texas Constitution
for the taking, damaging, or destruction of property;
⢠VI) a Fourteenth Amendment claim for depriving Porretto of
her property interests in violation of her procedural and
substantive due process rights;
⢠VII) a breach of settlement claim against the Park Board;
⢠VIII) tortious interference, harassment, and retaliation claims;
⢠IX) a claim for violation of the Texas Water Code;
⢠X) a claim seeking an accounting of all funds received from
requests that reference any part of Porretto Beach, and
reimbursement of funds that were never used to improve
Porretto Beach;
⢠XI) a claim seeking injunctive relief preventing Defendants
from referring to Porretto Beach as public property and from
further carrying out construction on Stewart Beach without an
agreement with Porretto;
⢠XII) a claim seeking a declaratory judgment that the rights of
ways claimed by the City on the Porretto Beach property are
terminated or abandoned;
⢠XIII) a claim seeking a declaratory judgment recognizing
Porrettoâs mineral interests and determining the boundaries of
submerged lands allegedly owned by the State;
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⢠XIV) a claim under the Texas Tort Claims Act for damages
caused to Porretto Beach by governmental functions.
Within a week of filing her original complaint, Porretto filed a first
amended complaint. On August 13, 2021, both the GLO and the Galveston
Defendants filed motions to dismiss, asserting that the bankruptcy court
lacked jurisdiction to hear the lawsuit. That same day, Porretto filed a second
amended complaint without obtaining leave to amend. On September 3,
2021, Porretto filed oppositions to Defendantsâ motions to dismiss, and she
filed amendments to these filings four days later.
Although Porretto never received leave to file a second amended
complaint, Defendants filed new motions to dismiss responding to the
second amended complaint out of an abundance of caution. Porretto
thereafter filed oppositions to this second round of motions to dismiss. Then,
on November 13, 2021, Porretto filed a third amended complaint, along with
a motion for leave to amend her pleadings.
On December 21, 2021, following a hearing on the motions to dismiss
and the motion for leave to amend, the bankruptcy court sua sponte
transferred the adversarial proceeding to the U.S. District Court for the
Southern District of Texas, Galveston Division. About two months later,
Porretto filed a motion for a temporary restraining order, requesting that the
district court enjoin Defendants from carrying out any construction work
related to the Stewart Beach Drainage Project.
On March 7, 2022, the district court denied Porrettoâs motion for a
temporary restraining order, but granted Porretto leave to file a third
amended complaint. The district court denied as moot Defendantsâ live
motions to dismiss (which were filed in response to Porrettoâs second
amended complaint), and it instructed Defendants that they could file
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renewed motions to dismiss responding to Porrettoâs live third amended
complaint within thirty days.
Defendants filed renewed motions to dismiss on April 22, 2022. In
their motions to dismiss, both groups of Defendants argued that the district
court lacks bankruptcy jurisdiction over Porrettoâs lawsuit. Defendants also
contended that Porrettoâs claims are barred by governmental immunities.
The GLOâs motion to dismiss further argued that Porretto lacks standing to
raise her claims against the State, since her complaint alleges no causal
connection between her alleged injuries and the GLOâs conduct. In addition
to raising these jurisdictional arguments, Defendantsâ motions to dismiss
also posited that Porrettoâs complaint does not state plausible claims for
relief. In her oppositions to Defendantsâ renewed motions to dismiss,
Porretto requested that she âbe afforded an opportunity to amend the
Complaint if the Court deems additional factual allegations are necessary.â
On December 7, 2022, the district court granted Defendantsâ motions
to dismiss. Addressing solely the GLOâs motion to dismiss first, the district
court agreed with the GLO that Porrettoâs complaint fails to sufficiently
allege that the GLOâs conduct caused her purported injuries.
The district court also concluded that it could not exercise jurisdiction
over Porrettoâs lawsuit pursuant to 28 U.S.C. § 1334. Regarding § 1334(b),
which gives federal district courts jurisdiction over âcivil proceedings . . .
arising in or related to cases under title 11,â the district court concluded that
Porrettoâs claims do not relate to Porrettoâs bankruptcy case âbecause the
abandoned property is no longer part of the estate nor will the claims affect
the bankruptcy case because each of the claims is personal to Porretto, and
her bankruptcy case has now been fully administered.â The district court
also concluded that § 1334(e)(1), which gives â[t]he district court in which a
case under title 11 is commenced or is pending . . . exclusive jurisdiction . . .
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of all the property, wherever located, of the debtor as of the commencement
of such case, and of property of the estate,â also does not apply, reasoning
that § 1334(e)(1) does not confer jurisdiction over claims pertaining to
property that has been abandoned by the estate.
The district court further concluded that it could not exercise federal
question jurisdiction under 28 U.S.C. § 1331. Although Porretto alleged unconstitutional takings in violation of the Fifth Amendment, she did so only through a direct invocation of the federal Constitution. The district court noted that the proper vehicle for asserting a Fifth Amendment takings claim is42 U.S.C. § 1983
, which Porretto did not invoke in her third amended
complaint.
After determining that it lacked jurisdiction to hear Porrettoâs case,
the district court denied Porretto another opportunity to amend her
complaint. About one month after the district court granted Defendantsâ
motions to dismiss, Porretto filed a motion requesting the recusal of U.S.
District Judge Jeffrey V. Brown and the reassignment of her case to a district
judge in the Houston Division. In her motion, Porretto raised several of Judge
Brownâs personal and professional connections that she claimed create the
appearance of impropriety. After the district court denied Porrettoâs motion
for recusal, as well as her motion for a new trial, Porretto filed a notice of
appeal.
II.
We review de novo the district courtâs grant of Defendantsâ motions
to dismiss filed pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules
of Civil Procedure. See Ramming v. United States, 281 F.3d 158, 161(5th Cir. 2001). âWhen a Rule 12(b)(1) motion is filed in conjunction with other Rule 12 motions, the court should consider the Rule 12(b)(1) jurisdictional attack before addressing any attack on the merits.âId.
The plaintiff bears the
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burden of proof in establishing that jurisdiction does in fact exist. Id.When reviewing a district courtâs dismissal based on lack of subject matter jurisdiction, âwe take the well-pled factual allegations of the complaint as true and view them in the light most favorable to the plaintiff.â Lane v. Halliburton,529 F.3d 548, 557
(5th Cir. 2008).
III.
Before addressing jurisdiction under 28 U.S.C. § 1334and28 U.S.C. § 1331
, the district court in its order granting Defendantsâ motions to dismiss first concluded that Porretto lacks standing to sue the GLO because her complaint does not sufficiently establish a causal link between the GLOâs conduct and her alleged injuries. âConstitutional standing has three elements: (1) an âinjury in factâ that is (a) concrete and particularized and (b) actual or imminent; (2) a causal connection between the injury and the conduct complained of; and (3) the likelihood that a favorable decision will redress the injury.â Croft v. Governor of Tex.,562 F.3d 735, 745
(5th Cir. 2009) (quoting Lujan v. Defs. of Wildlife,504 U.S. 555
, 560â61 (1992)). For the causation element of standing to be satisfied, âthe injury must be fairly traceable to the challenged action of the defendant, and not the result of the independent action of some third party not before the court.â Bennett v. Spear,520 U.S. 154, 167
(1997).
We agree with the district court that Porrettoâs operative complaint is
clearly deficient vis-Ă -vis her claims against the GLO. In fact, Porrettoâs
complaint hardly mentions the GLO at all. For instance, it is true that
Porretto alleges generally that âall Defendantsâ participated in the Stewart
Beach Drainage Project that purportedly resulted in flooding at Porretto
Beach, but she alleges no facts indicating what role, if any, the GLO played
in implementing this project. She similarly alleges no facts indicating that the
GLO participated in the Park Boardâs purported sand mining, only
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speculating that the GLO knew or âshould have knownâ about these
activities. 2 Porrettoâs complaint does vaguely allege that the GLO surveyed
Porretto Beach, but this allegation lacks any detail about how the survey was
performed, and it is difficult to ascertain how this alleged surveying activity
resulted in a cognizable injury that fits within her complaintâs causes of
action.
While Porrettoâs complaint is deficient in this regard, the record
indicates that there may, in fact, be a causal nexus between the GLO and the
Stewart Beach Drainage Project. Specifically, record evidence indicates that
the project involved comprehensive monitoring by the GLO, which required
the Park Board to conduct an environmental assessment for the project and
submit periodic progress reports highlighting the projectâs advancement and
setbacks. Additionally, after reviewing the Park Boardâs project proposal, the
GLO submitted comments and recommendations to the Park Board for
implementing the project. The grant agreement between the Park Board and
the GLO further required the Park Board to coordinate with the GLO prior
to engaging with the media and to seek approval from the GLO before
making any changes âin the scope of work or budget requests that change the
total project cost.â Taking this evidence into account, the record contains
some indication that the GLO was an active partner with the Park Board in
planning and implementing the Stewart Beach Drainage Project.
This case presents us with an admittedly odd scenario: Record
evidence indicates that a defendant may, in fact, have been involved in the
_____________________
2
The complaint appears to allege that the Park Board utilized manufactured
erosion data (purportedly the result of its sand mining) to obtain GLO funding for an
âErosion Response Project a/k/a Seawall Beautification Projectâ in 2013. But still, the
complaint does not allege facts indicating that the GLO was involved in the Park Boardâs
alleged sand mining scheme.
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activities that purportedly resulted in the plaintiffâs injuries, but the plaintiff
has failed to allege this involvement in her complaint. It is true that we have
held that courts, when ruling on a motion to dismiss for lack of subject matter
jurisdiction, may consider âthe complaint supplemented by undisputed facts
evidenced in the record.â Ramming, 281 F.3d at 161. But while it may be permissible for us to supplement allegations against the GLO with record evidence, Porrettoâs complaint is devoid of specific allegations against the GLO in the first place. Plus, even if we concluded that Porretto has standing to sue the GLO, her complaintâs failure to raise âa right to relief above the speculative levelâ vis-Ă -vis her claims against the GLO would result in the dismissal of these claims regardless. See Bell Atl. Corp. v. Twombly,550 U.S. 544, 555
(2007).
At bottom, the cure for a deficient complaint is an amended
complaint, not for this court to find standing based on a hypothetical,
improved complaint with more facts alleged. Porretto will be free on remand
to request leave to file an amended complaint, if she so chooses. 3 However,
based on the complaint before us, we cannot say that the district court erred
in dismissing Porrettoâs claims against the GLO for lack of standing. We thus
AFFIRM the district courtâs dismissal of Porrettoâs claims against the
_____________________
3
To avoid prejudging any 12(b)(6) issues, we decline to definitively decide whether
Porretto would be entitled to such leave from the court; after all, if the district court
determines that Porrettoâs allegations of unlawful activity, when taken as true, fail to state
a claim upon which relief can be granted, then it may be futile for Porretto to tack on to her
complaint more allegations about the GLOâs purported involvement. However, in the
event that amendment would not be futile, we note this courtâs general rule that â[l]eave
to amend should be liberally granted, when the plaintiff might be able to state a claim based
on the underlying facts and circumstances.â Assân of Am. Physicians & Surgeons Educ.
Found. v. Am. Bd. of Internal Med., 103 F.4th 383, 394 (5th Cir. 2024) (quoting Hernandez v. W. Tex. Treasures Est. Sales, L.L.C.,79 F.4th 464, 468
(5th Cir. 2023)).
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GLO and its Commissioner without prejudice. 4 For the remainder of this
opinion, we address Porrettoâs remaining claims against the Galveston
Defendants.
IV.
Porrettoâs third amended complaint asserts that the federal court has
jurisdiction pursuant to 28 U.S.C. § 1334 because Porrettoâs claims âarise[]
from or relate[] toâ Porrettoâs bankruptcy case. Her briefing more
specifically asserts jurisdiction under both § 1334(e)(1) and § 1334(b). We
address each subsection in turn.
A.
Porretto primarily focuses her jurisdictional arguments on 28 U.S.C.
§ 1334(e)(1), which grants â[t]he district court in which a case under title 11
is commenced or is pending . . . exclusive jurisdiction . . . of all the property,
wherever located, of the debtor as of the commencement of such case, and of
property of the estate.â Porretto interprets this provision broadly, asserting
that when a debtor is in a bankruptcy proceeding, the district court has
exclusive jurisdiction over all claims related to her property, including
property that has been abandoned by the trustee and is no longer part of the
bankruptcy estate.
_____________________
4
Because we are affirming the district courtâs dismissal of Porrettoâs claims against
these Defendants, we decline to address Porrettoâs argument that she has a self-executing
right to bring a takings claim against the State of Texas. In DeVillier v. Texas, 601 U.S. 285,
292â93 (2024), the Supreme Court declined to answer the question of âwhether a plaintiff
has a cause of action arising directly under the Takings Clause,â since Texasâs âstate-law
inverse-condemnation cause of action provides a vehicle for takings claims based on both
the Texas Constitution and the Takings Clause.â Of course, DeVillierâs holding will be
salient if Porretto attempts to amend her claims against the GLO, but we need not
prematurely address that issue here.
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Contrary to Porrettoâs interpretation, courts addressing
§ 1334(e)(1)âs scope have consistently held that § 1334(e)(1) grants federal
courts limited, exclusive in rem jurisdiction that cannot be exerted over
abandoned property. 5 See, e.g., In re Mitchell-Smith, No. 21-57646-WLH,
2022 WL 2195466, at *3 (Bankr. N.D. Ga. June 17, 2022) (âAbandonment is an act of jurisdictional significance that removes the abandoned property from the bankruptcy courtâs exclusive in rem jurisdiction.â (citing28 U.S.C. § 1334
(e))); In re Nyamusevya, No. 19-8027,2021 WL 193965
, at *6 (B.A.P. 6th Cir. Jan. 20, 2021) (â[T]he Trustee had determined . . . that the Property was of inconsequential value or benefit to the estate, and her abandonment was an act of jurisdictional significance, removing the Property from the bankruptcy courtâs exclusive in rem jurisdiction.â (citing28 U.S.C. § 1334
(e))); Lewis v. Harris, No. 3:08-CV-588 HTW-LRA,2012 WL 12973188
, at *6 (S.D. Miss. Apr. 5, 2012) (âThis court immediately recognizes that it does not have jurisdiction under § 1334(e), which provides jurisdiction over property of the estate. As noted above, once the trustee abandoned this case, it was no longer property of the estate and became the property of [the debtor].â); see also In re Danley,552 B.R. 871, 883
(Bankr. M.D. Ala. 2016) (â[A] bankruptcy courtâs in rem jurisdiction [pursuant to28 U.S.C. § 1334
(e)(1)] over property only lasts so long as that property remains in the estate; if the property leaves the estate, in rem jurisdiction lapses.â); In re Sindram, No. 08-00559,2010 WL 434341
, at *2 (Bankr. D.D.C. Jan. 28,
2010) (finding no jurisdiction under § 1334(e), because â[t]he closing of the
[bankruptcy] case abandoned the property to the debtor and resulted in the
_____________________
5
Because we find that the district court correctly held that it could not exercise
jurisdiction pursuant to § 1334(e)(1) due to the abandonment of the Porretto Beach
property, we need not address the GLOâs alternative argument that inverse
condemnation/takings actions are not in rem proceedings.
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estate having been fully administered insofar as that property was
concernedâ).
Though none of these authorities are binding on this court, taken
together, they do indicate a consensus among federal courts on this issue:
[T]he exclusive jurisdiction granted in section 1334(e)(1)
extends not only to property of the debtor as of the
commencement of the case, but also to property of the estate.
During the course of title 11 cases in general and of chapter 11
cases in particular, the estate acquires property in addition to
or different from the property of the debtor as it existed as of
the commencement of the title 11 case. Section 1334(e) makes
it clear that both kinds of property are subject to its provisions.
Jurisdiction is lost once the property is no longer property of the
estate. Likewise, the district court has exclusive jurisdiction to
determine whether property is property of the estate to begin
with.
1 Collier on Bankruptcy Âś 3.01 (Richard Levin & Henry J. Sommer
eds., 16th ed. 2024) (emphasis added) (collecting cases); see also 5 id.
Âś 554.02 (âUsually, abandonment of property will end the courtâs
jurisdiction to determine disputes concerning that property, unless the result
of the dispute could have some effect on the bankruptcy case.â). 6
This prevailing interpretation of § 1334(e)(1) appears to align with the
provisionâs function in context. As the U.S. Bankruptcy Court for the
District of Columbia explained in In re Ostroff, 433 B.R. 442, 452 (Bankr.
_____________________
6
Without citing § 1334(e)(1) explicitly, this court acknowledged âthe general rule
that a bankruptcy court loses jurisdiction over assets once they are transferred from the
bankruptcy estateâ in In re Skuna River Lumber, LLC, 564 F.3d 353, 355 (5th Cir. 2009),
though that case concerned property sold by the estate, not property that the estate had
abandoned back to the debtor. Still, Skuna River indicates that a district courtâs exclusive
jurisdiction over property may lapse depending on the status of the property at issue.
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D.D.C. 2010), âSection 1334(e) provides that the court has exclusive
jurisdiction over the property of the debtor as of the commencement of the
case because 11 U.S.C. § 541(a)(1) defines property of the estate as including, with minor exceptions, all of the property of the debtor as of the commencement of the case.â See also In re Brown,521 B.R. 205, 216
(Bankr. S.D. Tex. 2014). Under this statutory scheme, the âdebtorâs property must first come into the estate, subject to the property being exempted and the bankruptcy courtâs determining questions relating to claims of exemption, and is thus subject in that sense to administration by the bankruptcy court.â Ostroff,433 B.R. at 452
. Therefore, the function of § 1334(e)(1) in context is to âdivest[] any other court of the authority to take jurisdiction over the res being administered by the trustee for the benefit of unsecured creditors,â and that res âincludes the debtorâs property as of the commencement of the case that becomes property of the estate on that date under11 U.S.C. § 541
(a)(1).âId.
In other words, the function of § 1334(e)(1)âand its language
concerning property âof the debtor as of the commencement of such caseââ
is to facilitate the bankruptcy estateâs administration of the debtorâs
property, and not, as Porretto suggests, for the bankruptcy court to exercise
jurisdiction over the debtorâs property in perpetuity. 7 It reasonably follows
that when a property is abandoned, âthe estate ha[s] been fully administered
_____________________
7
Accordingly, we are not persuaded by Porrettoâs argument that the district court
retained jurisdiction over the Porretto Beach property after abandonment because Porretto
Beach became property âof the debtor.â § 1334(e)(1) grants the district court jurisdiction
over property âof the debtor as of the commencement of such case,â i.e., property of the debtor
that is subject to the bankruptcy estateâs administration. (emphasis added); cf. Ostroff, 433
B.R. at 452â53 (discussing exempt property, and noting that â[o]nce such property is
exempted from the estate, it is property of the debtor anew, and is no longer property being
administered by the bankruptcy trustee as property of the debtor as of the commencement
of the caseâ (internal quotation omitted)).
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insofar as that property [is] concerned,â and the district courtâs exclusive
jurisdiction over that property pursuant to § 1334(e)(1) lapses. See Sindram,
2010 WL 434341, at *2.
Porretto correctly points out, however, that courts in some instances
have invoked § 1334(e)(1) to exercise jurisdiction over abandoned property.
For instance, in In re Gunter, 410 B.R. 178, 180 (Bankr. E.D.N.C. 2008), the
U.S. Bankruptcy Court for the Eastern District of North Carolina addressed
whether it had jurisdiction to rule on a motion for summary judgment in an
adversarial proceeding involving a dispute between creditors regarding lien
priority. The court held that although the property at issue had been
abandoned, it was still âproperty of the debtor over which [the] court ha[d]
jurisdictionâ under § 1334(e)(1). Id. at 180â81.
Central to the courtâs reasoning was its conclusion that âan adversary
proceeding to resolve a dispute between two competing lienholders involving
property that is property of the debtor but is not property of the estateâ is a
âcore proceedingâ under 28 U.S.C. § 157(b)(2) that is subject to a bankruptcy courtâs jurisdiction.Id. at 181
; see28 U.S.C. § 157
(b)(2)(K) (listing âdeterminations of the validity, extent, or priority of liensâ as core proceedings). Furthermore, the court concluded that were one of the creditors to prevail in the adversarial proceeding, its competing creditor âwould be the largest unsecured creditor of the estate, and its claim would certainly affect any distribution received by the other unsecured creditors.â Gunter,410 B.R. at 181
. Therefore, the court also considered the case to be a
âcore proceedingâ subject to bankruptcy court jurisdiction under
â§ 157(b)(2)(A) (matters concerning the administration of the estate),
§ 157(b)(2)(B) (allowance or disallowance of claims against the estate), and
§ 157(b)(2)(O) (other proceedings affecting the adjustment of the debtor-
creditor relationship).â Id.
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The same bankruptcy court, citing Gunter, reached a similar
conclusion in In re Ormond, No. 12-05489-8-SWH, 2015 WL 1000218, at *2â
3 (Bankr. E.D.N.C. Mar. 3, 2015), a case concerning a bankâs request for
reimbursement of attorneyâs fees following a foreclosure sale of abandoned
property. In exercising jurisdiction under § 1334(e)(1), the bankruptcy court
noted that the outcome of the proceeding would have âa direct effect on the
amount of proceeds . . . unsecured claimants will receive.â Id. at *4.
Finally, in In re Fong, No. 01-00242, 2005 WL 3964429, at *1 (Bankr. D. Haw. Nov. 18, 2005), the U.S. Bankruptcy Court for the District of Hawaii determined that it had jurisdiction to âenter an order transferring a disputed tax lien and a judgment lien from property, some of which ha[d] been abandoned and some of which ha[d] not, to the proceeds of sale of the abandoned property.â The court cited § 1334(e)(1) as a basis for exercising jurisdiction over the abandoned property. Id. at *3. However, the court also determined that the proceeding was ârelated toâ a bankruptcy case and exercised jurisdiction under28 U.S.C. § 1334
(b), because âthere [was] a lien that encumber[ed] both abandoned property and estate property,â and thus âthe treatment of the lien on the abandoned property will affect the administration of the estate.âId.
We do not find Gunter, Ormond, and Fong persuasive here. Given
§ 1334(e)(1)âs function and limited scope, we are not convinced that the
courts in these cases correctly exercised jurisdiction pursuant to this
provision. The court in each case found jurisdiction under § 1334(e)(1), in
part, due to the proceedingâs potential impact on distributions in a
bankruptcy case, and it seems to us that it would have been more appropriate
to exercise jurisdiction pursuant to 28 U.S.C. § 1334(b), which provides federal jurisdiction over civil proceedings that may affect the rights of a debtor or the administration of the bankruptcy estate. See In re TXNB Internal Case,483 F.3d 292, 298
(5th Cir. 2007). In any event, even if Gunter,
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Ormond, and Fong indicate that there may be limited circumstances in which
a district court may exercise its jurisdiction under 28 U.S.C. § 1334(e)(1) to
hear a claim pertaining to abandoned propertyâsuch as a dispute between
competing creditors (Gunter and Fong), or a trusteeâs objection to a
creditorâs claim (Ormond)âPorretto has not effectively argued that the
limited circumstances present in Gunter, Ormond, and Fong exist here.
The remaining cases cited by Porretto supporting jurisdiction under
§ 1334(e)(1) are clearly distinguishable in that they all involve enforcing the
right of a debtor to exempt certain property from the estate under 11 U.S.C.
§ 522, which is not applicable here. See 5 Collier on Bankruptcy Âś 554.02 (âAbandonment . . . should not be considered to divest the court of jurisdiction to enforce the rights of a debtor to claim an exemption under section 522.â); In re Ramos,498 B.R. 401, 402
(B.A.P. 1st Cir. 2013) (âThe sole issue on appeal is whether the trusteeâs abandonment of the debtorâs residence deprived the bankruptcy court of jurisdiction to determine the debtorâs motion to avoid a judgment lien under11 U.S.C. § 522
(f).â); In re Lafoon,278 B.R. 767, 771
(Bankr. E.D. Tenn. 2002) (âThe abandonment by the Trustee pursuant to11 U.S.C. Section 554
(a) does not divest this court of jurisdiction to enforce the rights of the debtors as to their exemption in the property.â (quoting In re Bennett,13 B.R. 643, 645
(Bankr. W.D. Mich.
1981))).
Porretto has not presented a compelling reason for us to break from
the prevailing consensus on § 1334(e)(1), which is that a district courtâs
limited, exclusive jurisdiction under § 1334(e)(1) does not extend to claims
related to property that has been abandoned by the bankruptcy estate. As
briefly referenced above, we find that § 1334(b) provides the proper lens
through which to analyze the exercise of bankruptcy jurisdiction over
Porrettoâs claims, and we turn to that issue next.
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B.
28U.S.C. § 1334(b) grants federal courts âoriginal but not exclusive jurisdiction of all civil proceedings . . . arising in or related to cases under title 11.â This court has interpreted § 1334(b) as a broad jurisdiction-conferring provision. As we explained in TXNB,483 F.3d at 298
:
We have read this jurisdictional grant broadly, stating that the
test for whether a proceeding properly invokes federal ârelated
toâ jurisdiction is whether the outcome of the proceeding
could conceivably affect the estate being administered in
bankruptcy. Certainty is unnecessary; an action is ârelated toâ
bankruptcy if the outcome could alter, positively or negatively,
the debtorâs rights, liabilities, options, or freedom of action or
could influence the administration of the bankrupt estate.
(internal citations omitted).
That said, while § 1334(b)âs reach is broad, it is not limitless. Celotex
Corp. v. Edwards, 514 U.S. 300, 308(1995). This court will not find jurisdiction under § 1334(b) when the claims at issue affect only the debtor, and not the bankruptcy estate. See In re Wood,825 F.2d 90
, 94 (5th Cir. 1987). Thus, to invoke jurisdiction under § 1334(b), Porretto must establish that her suit could have had a conceivable effect on the bankruptcy estate at the time she filed her complaint. See Double Eagle Energy Servs., L.L.C. v. MarkWest Utica EMG, L.L.C.,936 F.3d 260
, 263â64 (5th Cir. 2019) (holding that the
âtime-of-filingâ rule applies to cases brought pursuant to § 1334(b)).
Here, we find that Porretto has not convincingly asserted that the
present lawsuit could have affected her bankruptcy estate at the time of filing.
Porretto notes that the Porretto Beach property has secured creditors, and
that âdamaging the property, taking the property, and/or inverse
condemnation of the property are all claims that necessarily impact the
secured creditor as her collateral is harmed.â She also asserts that if she
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receives damages in this case, âit is possible that the special counsel hired as
an estate professional in the bankruptcy court [could] assert a claim to the
proceeds.â Defendants counter that Porretto Beach was not part of the
bankruptcy estate at the time of this lawsuitâs filing; thus, if creditors have
secured interests in Porretto Beach, they will recover from either Porretto or
the property, not the bankruptcy estate. And, any awards from a favorable
judgment would not have accrued to the bankruptcy estate.
For two reasons, we find that Defendants have the better argument.
First, Porrettoâs lawsuit pertains to the Porretto Beach property, and we have
held that a âdebtorâs rights to [abandoned] property are treated as if no
bankruptcy petition was filed.â Kane v. Natâl Union Fire Ins., 535 F.3d 380,
385(5th Cir. 2008) (quoting 5 Collier on Bankruptcy Âś 554.02 (Alan N. Resnick & Henry J. Sommer eds., 15th ed. 2008)). Accordingly, â[u]sually[] abandonment of property will end the courtâs jurisdiction to determine disputes concerning that property.â 5 Collier on Bankruptcy Âś 554.02; see also William L. Norton III, 3 Norton Bankruptcy Law and Practice § 74:2 (3d ed. 2024) (âThe bankruptcy court loses subject matter jurisdiction over property on its abandonment, unless the property is claimed exempt by the debtor.â); In re Lyn,483 B.R. 440, 451
(Bankr. D. Del. 2012) (determining that the court lacked subject matter jurisdiction under § 1334(b) âwith respect to all claims pertaining toâ an abandoned property); In re Torres, No. 13-06530,2015 WL 1598120
, at *1 (Bankr. D.P.R. Apr. 7, 2015) (determining that the court
lacked subject matter jurisdiction under § 1334(b) because the bankruptcy
trustee had abandoned âthe property that is the subject of [the] adversary
proceedingâ).
Second, Porrettoâs claims all allege post-bankruptcy petition conduct.
âGenerally, post-petition claims are not dischargeable in bankruptcy and,
therefore, do not affect the estate.â Wood, 825 F.2d at 94; see also In re
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Rhinesmith, 450 B.R. 630, 632(Bankr. W.D. Tex. 2011) (âUnlike pre-petition claims, claims which accrue to the debtor post-petition generally will not adhere to the estate, and remain actionable by the debtor.â (quoting Stanley v. Cmty. Bank, N.A., No. 8:08-CV-925 GLS/RFT,2009 WL 261333
, at *2
(N.D.N.Y. Feb. 4, 2009))).
Arguably the only claims alleged by Porretto that do not directly
pertain to losses or damages to Porretto Beach are her claims of tortious
interference, harassment, and retaliation, but Porretto has not alleged that
the conduct underlying these claims occurred pre-petition. The remaining
claims, which also allege post-petition conduct, directly pertain to the
abandoned property, and we treat Porrettoâs rights to that property âas if no
bankruptcy petition was filed.â See Kane, 535 F.3d at 385 (internal quotation
omitted).
At bottom, it is Porrettoâs burden to establish that jurisdiction exists,
Ramming, 281 F.3d at 161, so we need not engage in endless speculation over
hypothetical scenarios linking this lawsuit to the administration of the
bankruptcy estate. Because Porretto has not clearly identified how her claims,
which concern an abandoned property, could impact the bankruptcy estate,
we find that the district court did not err in concluding that it could not
exercise jurisdiction over Porrettoâs lawsuit pursuant to § 1334(b).
V.
While Porrettoâs arguments for jurisdiction pursuant to 28 U.S.C.
§ 1334are unavailing, her invocation of federal question jurisdiction under28 U.S.C. § 1331
is straightforward. Porretto contends that the district courtâs dismissal due to her complaintâs lack of a specific citation to42 U.S.C. § 1983
contravenes the Supreme Courtâs precedent in Johnson v. City of Shelby,574 U.S. 10
(2014). We agree.
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In Johnson, the Supreme Court plainly held that plaintiffs pleading
constitutional claims cannot have their complaint dismissed based on a
failure to invoke § 1983; as long as they plead factual allegations sufficient to
show that their claims have substantive plausibility, their complaint can
survive a motion to dismiss. 574 U.S. at 12. In Quinn v. Guerrero, 863 F.3d
353, 358â59 (5th Cir. 2017), this court clarified that while a plaintiff does not
need to specifically cite a federal provision such as § 1983 to establish federal
question jurisdiction, the plaintiffâs âfederal question must appear on the
face of his well-pleaded complaint.â In other words, federal question
jurisdiction exists where the plaintiff specifically lists a federal cause of action
or makes a claim under federal law. Id. at 359.
Though Porretto failed to cite § 1983 (or 28 U.S.C. § 1331, for that
matter), her complaint clearly raises constitutional claims. She repeatedly
alleges that the flooding of her property, the Park Boardâs alleged taking of
sand, and Defendantsâ alleged interference with her beach propertyâs natural
accretion levels constitute takings without just compensation in violation of
the Fifth Amendment. 8 She also alleges that these takings occurred in
violation of her Fourteenth Amendment due process rights. Because Porretto
unambiguously pleaded constitutional claims in her complaint, her failure to
_____________________
8
Porrettoâs failure to cite 28 U.S.C. § 1331 is understandable when considering
that she filed the operative complaint in bankruptcy court. If, on remand, Porrettoâs claims
survive Defendantsâ motions to dismiss, an amended complaint could readily clarify the
proper basis for the courtâs jurisdiction. See Johnson, 574 U.S. at 12 (noting that the
plaintiffs, on remand, âshould be accorded an opportunity to add to their complaint a
citation to § 1983â).
Furthermore, we note that we do not consider Porrettoâs failure to cite 28 U.S.C.
§ 1331 to be a fatal defect to her complaint. See Charles Alan Wright & Arthur
R. Miller et al., 5 Federal Practice and Procedure § 1206 (4th ed. 2024)
(â[I]f a party seeking to invoke federal jurisdiction asserts a substantial claim under a
federal statute or common law, both the jurisdictional prerequisite and the pleading
requirements of Rule 8(a)(1) are satisfied.â).
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invoke § 1983 should not have prevented the district court from exercising
federal question jurisdiction. See Johnson, 574 U.S. at 10; see also Devillier v.
Texas, 63 F.4th 416, 429 (5th Cir. 2023) (Oldham, J., dissenting from denial
of rehearing en banc) (â[T]he absence of a cause of action is a merits
problem, not a jurisdictional one.â).
In response to Porrettoâs invocation of the rule enunciated in Johnson
v. City of Shelby, the Galveston Defendants suggest that this is a case where
âthe basis of federal jurisdiction is intertwined with the plaintiffâs federal
cause of action,â and that therefore âthe court should assume jurisdiction
over the case and decide the case on the merits.â Eubanks v. McCotter, 802
F.2d 790, 792â93 (5th Cir. 1986). More specifically, the Galveston
Defendants argue that because Porretto cannot meet the requirements for
pleading a § 1983 municipal liability claim, the court was correct to conclude
that there is no federal question jurisdiction.
Where factual findings regarding subject matter jurisdiction are
intertwined with the merits, this court has applied the standard described in
Bell v. Hood, 327 U.S. 678, 682â83 (1946), which provides that a federal claim âshould not be dismissed for lack of subject matter jurisdiction unless the alleged claim is immaterial or is wholly insubstantial and frivolous.â See Clark v. Tarrant County,798 F.2d 736
, 741â42 (5th Cir. 1986). This standard âis met only where the plaintiffâs claim âhas no plausible foundationâ or âis clearly foreclosed by a prior Supreme Court decision.ââ Williamson v. Tucker,645 F.2d 404, 416
(5th Cir. 1981) (quoting Bell v. Health-Mor, Inc.,549 F.2d 342, 344
(5th Cir. 1977)). To determine whether this standard applies, we look to âthe extent to which the jurisdictional question is intertwined with the merits, considering such factors as whether the statutory source of jurisdiction differs from the source of the federal claim and whether judicial economy favors early resolution of the jurisdictional issue.â In re S. Recycling, L.L.C.,982 F.3d 374, 380
(5th Cir. 2020) (emphasis in original).
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Defendantsâ argument that we should apply the âintertwined with
the meritsâ standard has some support; this court has held that invoking
federal question jurisdiction for a claim brought pursuant to § 1983 is a
âclassic example of a case in which the federal cause of action and federal
jurisdiction are interdependent.â Eubanks, 802 F.2d at 793. Furthermore, the U.S. District Court for the Southern District of Texas, in considering a recent takings claim against the GLO brought pursuant to § 1983, concluded that âfactual issues determinative of jurisdiction are intertwined with or identical to factual issues determinative of the merits.â Sheffield v. Bush,604 F. Supp. 3d 586
, 599â600 (S.D. Tex. 2022) (quoting Worldwide Parking, Inc. v. New Orleans City,123 F. Appâx 606, 608
(5th Cir. 2005)).
Even if the âintertwined with the meritsâ standard applies, we do not
find that Porrettoâs claims are âimmaterial and made solely for the purpose
of obtaining jurisdiction or . . . wholly insubstantial and frivolous.â Bell, 327
U.S. at 682â83. Porretto alleges that Defendantsâ activities resulted in
flooding and erosion at her beach property, and it is well established that
government-caused flooding and erosion may constitute a taking. See, e.g.,
United States v. Dickinson, 331 U.S. 745, 750(1947) (âWhen [the government] takes property by flooding, it takes the land which it permanently floods as well as that which inevitably washes away as a result of that flooding.â); Pumpelly v. Green Bay & Miss. Canal Co.,80 U.S. 166, 181
(1871) (determining that a taking occurs âwhere real estate is actually invaded by superinduced additions of water, earth, sand, or other material, or by having any artificial structure placed on it, so as to effectually destroy or impair its usefulnessâ); Boling v. United States,220 F.3d 1365
, 1372â73 (Fed. Cir. 2000) (finding that a taking may occur when a parcel is âsubstantially encroached by erosionâ); Applegate v. United States,35 Fed. Cl. 406, 415
(1996) (âBinding precedent supports a ruling, as a matter of law,
that flooding and erosion on plaintiffsâ properties caused by governmental
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action above the [mean high-water mark] is a compensable taking.â). And,
even if the alleged flooding was temporary, that fact does not bar relief. See
Cedar Point Nursery v. Hassid, 594 U.S. 139, 153 (2021) (â[W]e have held that
a physical appropriation is a taking whether it is permanent or temporary.â).
Furthermore, while we decline at this juncture to prejudge the merits
of Porrettoâs § 1983 municipal liability claim, our recent decision in St.
Maron Properties, L.L.C. v. City of Houston, 78 F.4th 754 (5th Cir. 2023), leads
us to believe that Porrettoâs case, at the very least, clears the âwholly
insubstantial and frivolousâ threshold. In St. Maron, a group of property
owners brought § 1983 claims under the Takings Clause, the Due Process
Clause, and the Equal Protection Clause, alleging that the Mayor of Houston,
the City Council, and the City Attorney used the property ownersâ empty
lots as a dumping ground for construction materials, which resulted in
flooding and subsequent damage to their properties. Id. at 757â58. This court
determined that the plaintiffs had sufficiently pleaded a § 1983 municipal
liability claim, noting that âeven a single decision may constitute municipal
policy in rare circumstances, when the official or entity possessing final
policymaking authority for an action performed the specific act that forms
the basis of the § 1983 claim.â Id. at 760. Given that there are some key
factual similarities between Porrettoâs claims and the St. Maron plaintiffsâ
claimsâi.e., a municipality undertaking activities that result in
unconstitutional takings without just compensation or due processâwe find
that the viability of Porrettoâs municipal liability claim is a nonfrivolous issue
that deserves full consideration on remand. Therefore, we decline to affirm
the dismissal of Porrettoâs claims for lack of federal question jurisdiction
pursuant to the âintertwined with the meritsâ standard.
Though we find that the district court has federal question
jurisdiction, Porretto still faces hurdles in overcoming the Galveston
Defendantsâ motion to dismiss, including Defendantsâ invocation of
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governmental immunity, as well as their assertion that Porrettoâs complaint
should be dismissed for failure to state a claim under Rule 12(b)(6). The
district courtâs supplemental jurisdiction over Porrettoâs state law claims is
another unresolved issue. But we leave it to the district court to address these
issues in the first instance. See Montano v. Texas, 867 F.3d 540, 546(5th Cir. 2017) (ââAs a court for review of errors,â we do ânot . . . decide facts or make legal conclusions in the first instance,â but âreview the actions of a trial court for claimed errors.ââ (quoting Browning v. Kramer,931 F.2d 340, 345
(5th
Cir. 1991))). Accordingly, we VACATE the district courtâs dismissal of
Porrettoâs claims against the Galveston Defendants, and we REMAND for
the district court to consider alternative grounds for dismissal in the first
instance.
VI.
In addition to challenging the district courtâs dismissal of her claims,
Porretto also challenges the district courtâs decision to deny her leave to
amend her complaint. âRule 15(a) [of the Federal Rules of Civil Procedure]
requires a trial court to grant leave to amend freely, and the language of this
rule evinces a bias in favor of granting leave to amend.â Smith v. EMC Corp.,
393 F.3d 590, 595(5th Cir. 2004) (internal quotation omitted). A district courtâs denial of leave to amend is reviewed for an abuse of discretion. PeĂąa v. City of Rio Grande City,879 F.3d 613
, 618 n.5 (5th Cir. 2018). 9 âThe district
_____________________
9
As a threshold matter, Porretto claims that the proper standard of review is de
novo, because the district court referenced futility when denying Porretto an opportunity to
further amend her pleadings. See PeĂąa, 879 F.3d at 618(â[W]here the district courtâs denial of leave to amend was based solely on futility, this court applies a de novo standard of review âidentical, in practice, to the standard used for reviewing a dismissal under Rule 12(b)(6).ââ (quoting Thomas v. Chevron U.S.A., Inc.,832 F.3d 586, 590
(5th Cir. 2016))).
There are two issues with Porrettoâs contention. First, our standard of review is de novo
when the district court denies leave to amend solely based on futility, and the district court
here also referenced Porrettoâs repeated failures to correct her pleadingsâ deficiencies. And
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court properly exercises its discretion under Rule 15(a)(2) when it denies
leave to amend for a substantial reason, such as undue delay, repeated failures
to cure deficiencies, undue prejudice, or futility.â United States ex rel. Spicer
v. Westbrook, 751 F.3d 354, 367 (5th Cir. 2014).
Porretto never filed a motion requesting leave to amend her operative
third amended complaint; instead, in her oppositions to Defendantsâ motions
to dismiss, Porretto asked to be âafforded an opportunity to amend the
Complaint if the Court deems additional factual allegations are necessary.â
We cannot fault the district court for refusing to grant Porretto leave to
amend under these circumstances, since a âbare bonesâ request to amend
pleadings âremains futile when it âfail[s] to apprise the district court of the
facts that [the plaintiff] would plead in an amended complaint.ââ Edionwe v.
Bailey, 860 F.3d 287, 295(5th Cir. 2017) (quoting Gentilello v. Rege,627 F.3d 540, 546
(5th Cir. 2010)). Accordingly, we AFFIRM the district courtâs
decision to deny leave to amend. 10 But, as noted above, Porretto may request
leave to amend her complaint on remand if she so chooses.
_____________________
second, when the grounds for denying leave to amend is futility, this court reviews a
proposed amended complaint de novo under a Rule 12(b)(6) standard, and there was no
proposed amended complaint here. See id.(âUnder that [Rule 12(b)(6)] standard, we must evaluate the sufficiency of the proposed complaint and decide which, if any, of [the plaintiffâs] claims survive the pleadings.â); Ariyan, Inc. v. Sewerage & Water Bd. of New Orleans,29 F.4th 226, 229
(5th Cir. 2022) (âIf the complaint, as amended, would be
subject to dismissal, then amendment is futile and the district court was within its
discretion to deny leave to amend.â). Therefore, we apply the abuse of discretion standard
of review.
10
We briefly address Porrettoâs argument that the district court denied her leave
to amend in violation of Rule 6 of the Galveston Division Rules of Practice (âLocal Rule
6â), which provides that the court will sua sponte grant a plaintiff leave to amend if
defendants do not meet and confer with the plaintiff before filing a motion to dismiss. We
recently invalidated Local Rule 6, holding that it âimpermissibly short circuits Federal Rule
of Civil Procedure 15âs liberal amendment scheme and our associated caselaw.â See Assân
of Am. Physicians, 103 F.4th at 388. While it could be argued that the portion of Local Rule
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VII.
Finally, we address the district courtâs denial of Porrettoâs motion
seeking the recusal of U.S. District Judge Jeffrey V. Brown. 28 U.S.C.
§ 455(a) provides that â[a]ny justice, judge, or magistrate judge of the United States shall disqualify himself in any proceeding in which his impartiality might reasonably be questioned.â We review the denial of a motion for recusal for an abuse of discretion. Matassarin v. Lynch,174 F.3d 549, 571
(5th
Cir. 1999).
In applying the recusal statute, we consider âwhether a reasonable
and objective person, knowing all of the facts, would harbor doubts
concerning the judgeâs impartiality.â United States v. Jordan, 49 F.3d 152,
155(5th Cir. 1995). This objective standard considers the perspective of the âwell-informed, thoughtful and objective observer, rather than the hypersensitive, cynical, and suspicious person.â Andrade v. Chojnacki,338 F.3d 448, 455
(5th Cir. 2003) (quoting Jordan,49 F.3d at 156
). â[E]ach § 455(a) case is extremely fact intensive and fact bound, and must be judged on its unique facts and circumstances more than by comparison to situations considered in prior jurisprudence.â Jordan,49 F.3d at 157
.
_____________________
6 invoked by Porretto was not invalidated, we need not address this issue, because we are
not convinced that this portion is applicable here. When the district court inherited this
case from the bankruptcy court, Porretto had already filed three amended complaints, and
Defendants had filed renewed motions to dismiss responding to Porrettoâs second
amended complaint. Under these unique circumstances, the district court decided to delay
ruling on the motions to dismiss, grant Porrettoâs request to make her third amended
complaint the operative complaint in the matter, and provide Defendants the opportunity
to renew their motions to dismiss within thirty days. Because the district court inherited a
case that already had several amended complaints and live motions to dismiss, it was not
unreasonable, nor an abuse of discretion, for the court to conclude that Local Rule 6 would
not apply to these particular circumstances. See McLeod, Alexander, Powel & Apffel, P.C. v.
Quarles, 894 F.2d 1482, 1488 (5th Cir. 1990) (âWe recognize that district courts have
considerable latitude in applying their own rules.â).
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Porretto raises several grounds for concluding that Judge Brown
should have recused himself. First, and most prominently, Porretto notes
that Judge Brown had a mechanicâs lien filed against his home in favor of
Galveston Councilmember John Listowskiâs company in the amount of
$72,683.99. Because the mechanicâs lien is a âsubstantial financial
obligation,â Porretto speculates that Listowski and Judge Brown may have
âa close relationshipâ because of âthe nature of the work given a contractor
is in the home and would see the personal details of the judgeâs life.â Porretto
also notes that Listowski regularly votes against Porrettoâs interests, and she
opines that it is inappropriate for Judge Brown to conduct business with a
local elected official who could feasibly appear before the court. According to
Porretto, the appearance of impropriety is heightened here because Judge
Brown lives next door to Galvestonâs mayor.
Porretto further takes issue with the tone of the courtâs order denying
her motion for a new trial and motion for recusal. She notes that the court
filed this order twice; the first order noted that âplaintiffâs motion for new
trial . . . andâfiled just yesterdayâher motion to recuse the undersignedâ were
before the court, and the second order omitted the language indicated above
in italics. (emphasis added). Porretto claims that this first filing, as well as the
courtâs order granting Defendantsâ motions to dismiss, contains an
inappropriate âpersonal toneâ that evinces bias against Porretto. Porretto
further contends that Judge Brownâs bias is reflected by the fact that the
district courtâs order granting Defendantsâ motions to dismiss in some
instances adopts language from Defendantsâ filings.
Porretto additionally notes that Defendantsâ counsel collectively
donated over $9,000 to Judge Brownâs judicial campaigns when he served on
the state bench. She claims that the contributionsâ ârelative size . . . is
significantly more than average donors and more consistent than other
donors.â Finally, Porretto highlights that Judge Brown serves on the
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Houston Law Review Board of Directors with attorneys who serve as
Defendantsâ counsel.
Regarding the mechanicâs lien that connected Judge Brown and
Galveston Councilmember John Listowski professionally, courts have
regularly held that casual, professional relationshipsâeven those between a
judge and a party to a caseâdo not warrant recusal. See, e.g., McWhorter v.
City of Birmingham, 906 F.2d 674, 679(11th Cir. 1990) (holding, in a lawsuit against the City of Birmingham, that the judgeâs friendship and business relationship with the Mayor of Birmingham did not âcreate the appearance of improprietyâ); Jenson v. Fisher,99 F.3d 1149
,1996 WL 606505
at *2 (10th Cir. 1996) (âProfessional associations alone are insufficient to establish judicial bias.â); United States v. Olis,571 F. Supp. 2d 777, 786
(S.D. Tex.
2008) (âJudges are not required to recuse . . . when facts stated in a
supporting affidavit show that they have a casual, professional relationship
with an attorney, victim, witness, or litigant appearing before them in
court.â).
Porrettoâs argument that the mechanicâs lien creates the appearance
of impropriety is unpersuasive. The professional relationship between Judge
Brown and Councilmember Listowski does not alone establish a âpersonal
relationship of such magnitude that the judge cannot be impartial.â Olis, 571
F. Supp. 2d at 786. Furthermore, it is unclear what role, if any, Councilmember Listowski will play in this litigation. As the Eleventh Circuit explained in McWhorter, personal ties to a municipal leaderâwho is not a party or witness in the caseâare insufficient to create the appearance of impropriety in a § 1983 suit against the municipality.906 F.2d at 679
.
Porrettoâs other allegations regarding Judge Brownâs relationships are
similarly uncompelling. The fact that Judge Brown lives next door to the
Mayor of Galveston is hardly grounds for recusal, especially considering that
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No. 23-40035
the Mayorâs involvement in this lawsuit is unclear. Furthermore, Judge
Brownâs role on the University of Houston Law Reviewâs Board of Directors
is an ordinary professional association that does not create the appearance of
impropriety.
Turning to the campaign contributions provided to Judge Brown,
Defendants note that âTexas courts have repeatedly rejected the notion that
a judgeâs acceptance of campaign contributions from lawyers creates bias
necessitating recusal, or even an appearance of impropriety.â Aguilar v.
Anderson, 855 S.W.2d 799, 802(Tex. App.âEl Paso 1993, writ denied) (collecting cases); see also Rocha v. Ahmad,662 S.W.2d 77, 78
(Tex. App.â El Paso 1993, writ denied) (âIf a judge cannot sit on a case in which a contributing lawyer is involved as counsel, judges who have been elected would have to recuse themselves in perhaps a majority of the cases filed in their courts.â). In any event, Judge Brown now serves on the federal bench, which largely ameliorates any possible concern regarding â[t]he temporal relationship between the campaign contributions, the [judgeâs] election, and the pendency of the case.â Caperton v. A.T. Massey Coal Co.,556 U.S. 868, 886
(2009) (reviewing the due process factors that courts look to when
addressing the potential bias of a judge who received campaign contributions
from a party).
Porrettoâs arguments related to the district courtâs âpersonal toneâ
also are meritless. We fail to see how a minor language edit in the district
courtâs order evinces bias against Porretto. And while the district court may
have adopted some of Defendantsâ language in drafting its order granting
Defendantsâ motions to dismiss, the language of the order does not appear to
âhave a personal tone againstâ Porretto.
Finally, while Porretto claims that she filed a motion for recusal
shortly after learning of the mechanicâs lien, the timing of Porrettoâs motion
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No. 23-40035
gives us pause. âThe general rule on timeliness requires that âone seeking
disqualification must do so at the earliest moment after knowledge of the facts
demonstrating the basis for such disqualification.ââ United States v. Sanford,
157 F.3d 987, 988(5th Cir. 1998) (quoting Travelers Ins. v. Liljeberg Enters., Inc.,38 F.3d 1404, 1410
(5th Cir. 1994)). âWe have rejected recusal
challenges on appeal when the challenger waited to see if he liked an outcome
before springing the recusal issue.â Id. at 989. While not dispositive, the fact
that Porretto raised this issue after receiving an adverse judgment raises
concerns regarding whether her motion was brought in good faith.
In sum, Porrettoâs brief highlights Judge Brownâs seemingly
innocuous professional connections, which do not create the appearance of
impropriety. Several of these connections are with nonparty individuals
whose relation to this litigation is unclear. And the campaign contributions
are of limited concern, since Judge Brown now sits on the federal bench. We
therefore AFFIRM the district courtâs denial of Porrettoâs motion for
recusal, and we DENY Porrettoâs request for this case to be reassigned to a
judge in the Houston Division on remand. See Test Masters Educ. Servs., Inc.
v. Singh, 428 F.3d 559, 581 (5th Cir. 2005) (noting that reassigning a case to
a different judge on remand is an âextraordinary power that should be rarely
exercisedâ (internal quotation omitted)).
VIII.
For the foregoing reasons, we AFFIRM the district courtâs denial of
Porrettoâs claims against the GLO and its Commissioner without prejudice.
We VACATE the district courtâs dismissal of Porrettoâs claims against the
Park Board and the City of Galveston, and we REMAND with instructions
for the district court to consider these Defendants-Appelleesâ alternative
arguments for dismissal, as well as the issue of supplemental jurisdiction over
Porrettoâs state law claims. We also AFFIRM the district courtâs decision
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No. 23-40035
to deny Porretto leave to amend her complaint, though we note that Porretto
may file a substantive motion for leave to amend on remand if she so chooses.
Finally, we AFFIRM the district courtâs denial of Porrettoâs motion for
recusal, and we DENY Porrettoâs request for her case to be reassigned to a
judge in the Houston Division on remand.
33