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High Plains Livestock, LLC v. Allen

United States District Court, D. New Mexico

June 19, 2019

HIGH PLAINS LIVESTOCK, LLC, a Texas limited liability company, d/b/a Producers Livestock Auction, MICHAEL FLEN, CALVIN PAREO, and DARCIE PAREO, Plaintiffs,
BARRY ALLEN, SHAWN DAVIS, RAY BACA, in their individual and official capacities, and THE NEW MEXICO LIVESTOCK BOARD, Defendants.

          Pete V. Domenici, Jr., Domenici Law Firm, P.C., Albuquerque, New Mexico, for Plaintiffs High Plains Producers, Inc. and Darcie Pareo; Wesley O. Pool, Pool Law Firm, P.C., Clovis, New Mexico, for Plaintiff Michael Flen; Sandra Gallagher, Gallagher Law Firm, Portales, New Mexico, for Plaintiff Calvin Pareo.

          Randy S. Bartell, Randi N. Valverde, and Matthew A. Zidovsky, Montgomery & Andrews, P.A., Santa Fe, New Mexico, for Defendants Barry Allen, Shawn Davis, Ray Baca, and the New Mexico Livestock Board.


          Paul J. Kelly, Jr., United States Circuit Judge

         THIS MATTER is before the court on Individual Defendants Barry Allen, Shawn Davis, and Ray Baca's Motion to Dismiss Federal Claims in the Second Amended Complaint filed June 11, 2018. ECF No. 42. Upon consideration thereof, the motion is well taken and should be granted.


         Plaintiffs High Plains Livestock, LLC (“High Plains”) and its owner (Michael Flen) as well as two persons affiliated with High Plains (Calvin and Darcie Pareo) brought this action against the New Mexico Livestock Board (“NMLB”), two of its law enforcement agents (Defendants Barry Allen and Shawn Davis), and its executive director (Ray Baca). The court gathers the following from the Second Amended Complaint.

         As of 2009, Plaintiff High Plains was licensed to conduct livestock auctions. See N.M. Stat. Ann. § 77-10-1; Second Am. Compl. ¶ 13 (ECF No. 37). According to the Plaintiffs, the individual defendants and the NMLB engaged in unconstitutional and tortious conduct in the intervening years that interfered with High Plains' business. The Second Amended Complaint traces Defendants' interference to 2009, before High Plains received its auction license. Plaintiffs allege that the NMLB executive director warned Michael Flen that he could not hire Plaintiffs Calvin and Darcie Pareo because they were “bad people.” Id. at ¶¶ 19-20. That same year, presumably after High Plains received its license, the NMLB charged High Plains with failing to properly account for sales at each auction and comply with permitting requirements for out-of-state cattle. Id. at ¶ 21-22. Plaintiffs maintain they were in compliance until NMLB brand inspector Terry Roberts arbitrarily issued a citation. Id. at ¶ 22. The charges were dismissed. Id. at ¶¶ 21, 23.

         The Second Amended Complaint alleges harassment and arbitrary action following the dismissal. For example, Agent Allen began conducting random inspections and requiring paperwork not required of other sale barns. Id. at ¶¶ 23-24. In August 2011, Mr. Baca required a brand inspector (Terry Roberts) to direct Mrs. Pareo to “run cattle through a chute.” Id. at ¶ 27. When Mrs. Pareo responded it could not be done at that time, Mr. Roberts “yelled at [her], ‘you will do what I say when I say it.'” Id. at ¶ 28. The Pareos called Mr. Roberts's supervisor, who promised Mr. Roberts would not return. Id. Despite the assurances, Mr. Roberts returned but was told by the Pareos to leave and not return. Id. High Plains was cited the following week for not giving Mr. Roberts proper paperwork and for an assault involving Mr. Pareo. Id. at ¶ 29. A jury acquitted High Plains and Mr. Pareo. Id. at ¶ 30.

         Thereafter, the NMLB denied High Plains' request to conduct two sales per week. Id. at ¶ 32. Mr. Baca then directed brand inspectors not to stay at High Plains' sales past 7:00 p.m. and to return, if at all, the following morning. Id. Plaintiffs maintain that such a requirement was not similarly imposed on other sale barns and it interfered with the ability to conduct competitive livestock auctions. Id.

         The Second Amended Complaint also describes a 2013 directive to the New Mexico Department of Transportation by Mr. Baca to stop High Plains livestock haulers so as to check licenses and the number of cattle. Id. at ¶ 37. In addition, High Plains' auction license was contingent on moving to a new facility, but Agents Allen and Davis prohibited High Plains from doing so despite previous assurances to High Plains that requirements to move were satisfied. Id. at ¶ 33. The NMLB also directed the Animal Plant and Health Inspections Services - an agency purportedly empowered to authorize High Plains' move - to deny High Plains' request, but that agency disregarded the directive and issued authorization. Id. at ¶ 34.

         After High Plains moved, approximately ten brand inspectors seized, without a warrant, “metal clips[] and back tags.” According to head brand inspector Troy Patterson, the tags were deficient and could not be used, although a state veterinarian assured High Plains that the tags were indeed compliant.[1] Id. at ¶ 35.

         Defendants then conducted a second raid of High Plains, this time with a warrant that authorized the seizure of “all business records in High Plains' possession.” Id. at ¶ 38. Plaintiffs state that the warrant was issued without probable cause and with deficient affidavits. Id. They maintain they were not free to leave during the resulting search because of Defendants' show of authority. Id. In the raid, Defendants seized not only business records and computers, but also (1) the Pareos' daughter's birth certificate and shot record; (2) the Pareos' personal bank statements from before 2014; (3) the Pareos' complete bankruptcy file from before 2013; (4) negotiable instruments of over $50, 000 made payable to “Plaintiff”; and (5) billing records for feed that had not been posted to client ledgers, and “numerous other personal records.” Id. Agent Allen refused High Plains' request for a copy of seized electronic accounting records. Id. Agents Allen and Davis also took seized evidence prior to cataloging, and much of the evidence is now unaccounted for and missing, if not intentionally destroyed. Id. at ¶¶ 38, 43.

         The Second Amended Complaint alleges that Agents Davis and Allen continued to undermine High Plains' business following the raid. Not only did they publish statements that Plaintiffs were “crooks, ” but they also made defamatory statements to potential customers and threatened them with criminal charges should they do business with High Plains. Id. at ¶ 40. Agent Allen also asked a potential High Plains customer if he knew any “bull-dog type” IRS auditors so Agent Allen could release them on High Plains. Id.

         Criminal charges were filed against Plaintiffs after the raid, and the NMLB revoked High Plains' license. Id. at ¶ 40. Prior to trial, Agents Davis and Allen interviewed and captured the audio of multiple witnesses, who provided allegedly “exculpatory testimony.” Id. at ¶¶ 41, 43. Agents Davis and Allen then hid or destroyed the recordings and, under oath, denied their existence. Id. at ¶¶ 41-43. Even absent this purportedly exculpatory evidence, the Second Amended Complaint states that the charges were dismissed after a jury trial. Id. ¶ 40.

         Plaintiffs brought their complaint in state court, Compl. (ECF No. 1-1), [2] and Defendants removed to federal court. Notice of Removal (ECF No. 1). Plaintiffs moved for leave to amend their complaint, and the magistrate judge, based solely on considering the prejudice to Defendants, granted leave. ECF No. 36. Plaintiffs filed their Second Amended Complaint in April 2018. Count I alleges Mr. Baca and Agents Allen and Davis violated the New Mexico Tort Claims Act in their personal capacities, and specifically alleges: (1) malicious prosecution; (2) abuse of process; (3) libel, slander, defamation of character; (4) violation of property rights; (5) deprivation of any rights, privileges or immunities secured by the constitution and laws of the United States or New Mexico; (6) due process violations; and (7) equal protection violations. Count II alleges violations of Plaintiffs' constitutional rights under 42 U.S.C. § 1983 against Mr. Baca and Agents Allen and Davis in their personal capacities. Specifically, Count II alleges (1) Fourth Amendment violations as incorporated under the Fourteenth Amendment; (2) Sixth Amendment violations as incorporated under the Fourteenth Amendment; (3) and due process and equal protection violations under the Fourteenth Amendment. Count III alleges malicious prosecution against Mr. Baca and Agents Allen and Davis in their personal capacities under 42 U.S.C § 1983. Finally, Count IV requests damages, fees, and preliminary and permanent injunctive relief against all defendants. On June 11, 2018, Individual Defendants moved to dismiss Plaintiffs' federal claims pursuant to Fed.R.Civ.P. 12(b)(6). ECF No. 42.


         A defendant may move to dismiss for failure to state a claim upon which this court may grant relief. Fed.R.Civ.P. 12(b)(6). When reviewing such a motion, this court accepts all well-pled factual allegations as true and views them in the light most favorable to the plaintiff. Butler v. Bd. of Cty. Comm'rs for San Miguel Cty., 920 F.3d 651, 654 (10th Cir. 2019). A plaintiff's request for relief must be “plausible on its face”; it must state “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 570 (2007); see also Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Individual Defendants argue Plaintiffs have failed to meet this standard as to their claims for relief under the Fourth Amendment, Sixth Amendment, Fourteenth Amendment, and as to their malicious prosecution claim under § 1983.

         Individual Defendants also argue they are entitled to qualified immunity. A defense of qualified immunity is most often resolved at the summary judgment stage, but this court may grant a motion to dismiss on that basis upon a defendant's showing the conduct alleged in the complaint was objectively reasonable. Thomas v. Kaven, 765 F.3d 1183, 1194 (10th Cir. 2014). Qualified immunity shields government officials from liability for civil damages if their conduct did not violate clearly established constitutional rights. White v. Pauly, 137 S.Ct. 548, 551 (2017) (per curiam). Qualified immunity balances “the need to hold public officials accountable when they exercise power irresponsibly” with “the need to shield officials from harassment, distraction, and liability when they perform their duties reasonably.” Pearson v. Callahan, 555 U.S. 223, 231 (2009). Liability “turns on the objective legal reasonableness of the action, assessed in light of the legal rules that were clearly established at the time it was taken.” Messerschmidt v. Millender, 565 U.S. 535, 546 (2012) (internal quotation marks omitted).

         To overcome a qualified immunity defense, a plaintiff must show (1) that there was a violation of a constitutional right, and (2) that a reasonable person would have known the right was clearly established at the time of the alleged violation. Pearson, 555 U.S at 232. The right must be defined with specificity, and for the law to be clearly established, the constitutional question must be beyond debate. Kisela v. Hughes, 138 S.Ct. 1138, 1152 (2018). The law must be evaluated at the time of the events in question. Id. at 1154. A plaintiff must usually identify existing precedent that would make it apparent to an official that his or her conduct in these circumstances was unlawful; there are few obvious situations where such case law is not essential. District of Columbia v. Wesby, 138 S.Ct. 577, 590 (2018). Courts may look to either factor to resolve the question of qualified immunity. See Green v. Post, 574 F.3d 1294, 1299 (10th Cir. 2009).

         A. Plaintiffs' Fourth Amendment Claims

         Plaintiffs allege four separate Fourth Amendment violations. They first challenge the constitutionality of the search warrant authorizing the seizure of High Plains' business records as not supported by probable cause and made on the basis of invalid affidavits. Second Am. Compl. ¶ 79. Next, they argue the search warrant lacked particularity as to the property seized and not returned to them. Id. at ΒΆ 80. Third, they claim they were unreasonably seized ...

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