Daily Services, LLC v. Tracy Valentino, et al

Filing

OPINION and JUDGMENT filed : The district court's grant of the defendants' motion for judgment on the pleadings is AFFIRMED. Decision for publication. Karen Nelson Moore (CONCURRING IN PART AND DISSENTING IN PART) and R. Guy Cole, Jr. (AUTHORING), Circuit Judges; Gershwin A. Drain, U.S. District Judge for the Eastern District of Michigan, sitting by designation.

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RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 14a0133p.06

UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
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DAILY SERVICES, LLC,
Plaintiff-Appellant,
v.

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No. 13-4157

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TRACY VALENTINO; TINA KIELMEYER; TOM SICO;
JOHN DOES, NOS. 1 THROUGH 5, Employees of the
Ohio Bureau of Workers’ Compensation,
Defendants-Appellees.

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Appeal from the United States District Court
for the Southern District of Ohio at Columbus.
No. 2:11-cv-01147—Elizabeth A. Preston, Magistrate Judge.
Argued: May 7, 2014
Decided and Filed: June 26, 2014
Before: MOORE and COLE, Circuit Judges; DRAIN, District Judge.*
_________________
COUNSEL
ARGUED: W. Evan Price II, LAW OFFICE OF W. EVAN PRICE II, LLC, Dublin, Ohio, for
Appellant. James A. King, PORTER, WRIGHT, MORRIS & ARTHUR LLP, Columbus, Ohio,
for Appellees. ON BRIEF: W. Evan Price II, LAW OFFICE OF W. EVAN PRICE II, LLC,
Dublin, Ohio, for Appellant. James A. King, David S. Bloomfield, Jr., Caitlin E. Chamberlin,
PORTER, WRIGHT, MORRIS & ARTHUR LLP, Columbus, Ohio, for Appellees.
COLE, J., delivered the opinion of the court, in which DRAIN, D.J., joined and in which
MOORE, J., joined except as to Part II.C.3. MOORE, J. (pp. 23B24), delivered a separate
opinion dissenting in part.

*

The Honorable Gershwin A. Drain, United States District Judge for the Eastern District of Michigan,
sitting by designation.

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_________________
OPINION
_________________
COLE, Circuit Judge. Daily Services, LLC sued various employees of the Ohio Bureau
of Workers’ Compensation after the Bureau filed a series of judgments and liens against the
company in violation of Ohio’s statutory and administrative procedures. Daily Services claimed
that the defendants violated its right to procedural due process. The district court concluded that
the defendants were entitled to qualified immunity. The court recognized that Parratt v. Taylor,
451 U.S. 527 (1981), and its progeny sometimes allow a state to satisfy due process without
providing notice or an opportunity to be heard before depriving a property interest. Because it
was not clearly established that Parratt did not apply, the court reasoned, Daily Services did not
have a clearly established right to predeprivation process.
We find the district court’s conclusion in error because the applicability of Parratt is
irrelevant to the “clearly established” prong of the qualified immunity analysis. Nevertheless,
because the Parratt doctrine does apply, and Daily Services has not pleaded that Ohio provided
inadequate postdeprivation remedies, we affirm the district court’s decision granting the
defendants’ motion for judgment on the pleadings.
I. BACKGROUND
Because the defendants moved for judgment on the pleadings, this court accepts the
complaint’s well-pleaded factual allegations as true and construes the complaint in the light most
favorable to Daily Services. See Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009).
Daily Services provides short-term temporary employment services in central Ohio. The
company’s sole member is Ryan Mason. Mason was also the sole member of I-Force, LLC, a
company that provided longer-term temporary employment services. After losing coverage
under the Bureau’s group insurance rating plan, I-Force applied with the Bureau for selfinsurance status. The Bureau denied the application, and I-Force owed over $3 million in unpaid
workers’ compensation premiums. Unable to make payments towards the premiums, I-Force

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closed. Daily Services acquired some of I-Force’s customers and began offering longer-term
temporary employment services.
Ohio law allows the Bureau to recover unpaid premiums by filing judgments and liens
against delinquent employers. See Ohio Rev. Code Ann. §§ 4123.37, 4123.78; Ohio Admin.
Code § 4123-14-02.

Under this administrative process, the Bureau first must provide the

employer with written notice of the overdue premiums and an opportunity to pay the premiums
within twenty days. See Ohio Rev. Code Ann. § 4123.37. If the employer does not pay within
twenty days, the Bureau must provide an “assessment” by certified mail. Id. The assessment
becomes final twenty days later, unless the employer petitions for reassessment, at which point
the Bureau’s administrator must issue findings and an order. Id. The employer may appeal the
administrator’s findings and order to the Franklin County Court of Common Pleas. Id. Once the
assessment is final, the Bureau may file a judgment with the state court and a lien with the
county recorder. See id. §§ 4123.37, 4123.78. Ohio law, in other words, provides the employer
with notice and an opportunity to be heard before the Bureau may file a judgment or lien against
it.
Ohio law also allows the Bureau to deem one company the successor of another for
purposes of the workers’ compensation laws. See id. § 4123.32(C); Ohio Admin. Code § 412317-02(B) & (C). The Bureau may transfer a prior employer’s experience rating, which is used to
calculate premiums, and, if an employer “wholly succeeds another in the operation of a
business,” the Bureau may transfer the obligation to pay unpaid premiums. See Ohio Admin.
Code § 4123-17-02(B).
In May 2009, the Bureau decided internally that Daily Services wholly succeeded IForce, and it began a quest to recover I-Force’s unpaid premiums from Daily Services. We need
not detail the lengthy procedural history between the Bureau and Daily Services here. In
relevant part, the Bureau did not provide notice of its assessment via certified mail or an
opportunity to be heard, in violation of Ohio law, before it filed the following judgments and
liens against Daily Services: a $54 million lien and a $54 million judgment on November 6,
2009; a $22 million lien on November 17; a $3 million lien on July 8, 2010; and a $3 million
judgment on July 13.

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Daily Services moved in state court to vacate the judgments in September 2010. Because
the Bureau had not provided prior notice, the state court vacated the $3 million judgment in
October 2010 and the $54 million judgment in February 2011. Ten days later, the Bureau
released the three liens. That same day, however, the Bureau filed another $3 million lien and
another $3 million judgment against Daily Services. This time the Bureau provided prior notice
of its assessment, but it filed the lien and judgment before the Bureau’s administrator heard Daily
Services’ appeal of the assessment.
Daily Services again moved in state court to vacate the judgment. In November 2011,
the state court vacated the second $3 million judgment because the assessment was not “final” in
light of the pending administrative appeal. Four days later, on November 25, the Bureau filed an
$8,400 lien against Daily Services based on its yet-to-be-issued decision that four other
companies owned by Mason should be “combined” with Daily Services into one workers’
compensation policy. The Bureau did not provide notice of its decision before filing the lien.
Daily Services appealed the Bureau’s decision, but while the appeal was pending the Bureau
filed an $8,400 judgment against Daily Services on December 12. About six weeks later, after
Daily Services filed the instant complaint, the Bureau dismissed the judgment and released the
lien. The Bureau has not released the second $3 million lien. The parties are still litigating
whether Daily Services wholly succeeded I-Force.
Daily Services sued Tracy Valentino, Chief Financial Officer of the Bureau; Tom Sico,
Assistant General Counsel of the Bureau; Tina Kielmeyer, the Bureau’s Chief of Customer
Service; and five unknown Bureau employees, all in their individual capacities, under 42 U.S.C.
§ 1983. Daily Services alleged that the defendants violated its Fourteenth Amendment right to
procedural due process nine times—one count for each judgment and lien. According to Daily
Services, these judgments and liens prevented it from securing conventional financing, causing
Daily Services to incur excess interest and hindering the company’s ability to expand. Daily
Services sought over $1 million in damages. Daily Services also claimed that the defendants
acted intending to shut down Daily Services, in part because Valentino is a close friend of the
owner of one of Daily Services’ competitors.

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The defendants answered the complaint and moved for judgment on the pleadings under
Federal Rule of Civil Procedure 12(c). The district court granted the motion. It concluded that
the defendants were entitled to qualified immunity because the law did not clearly establish that
Daily Services was entitled to notice and an opportunity to be heard before the judgments and
liens were filed. Daily Services timely appealed.
The district court had jurisdiction under 28 U.S.C. §§ 1331 and 1343, and 28 U.S.C.
§ 636(c) gave the magistrate judge authority to decide the case. This court has jurisdiction under
28 U.S.C. §§ 636(c)(3) and 1291.
II. ANALYSIS
This court reviews de novo a decision dismissing an action under Federal Rule of Civil
Procedure 12(c). Fritz v. Charter Twp. of Comstock, 592 F.3d 718, 722 (6th Cir. 2010). We
evaluate a Rule 12(c) motion for judgment on the pleadings as we would a Rule 12(b)(6) motion
to dismiss. Ziegler v. IBP Hog Mkt., Inc., 249 F.3d 509, 511–12 (6th Cir. 2001). To survive the
Rule 12(c) motion, “a complaint must contain sufficient factual matter, accepted as true, to state
a claim to relief that is plausible on its face.” Iqbal, 556 U.S. at 678 (internal quotation marks
omitted).
This court also reviews de novo the district court’s finding of qualified immunity. Bloch
v. Ribar, 156 F.3d 673, 677 (6th Cir. 1998). To determine whether state officials are entitled to
qualified immunity, we generally ask two questions: whether the plaintiff has alleged facts that
make out a violation of a constitutional right, and whether the right at issue was clearly
established at the time of the misconduct. See Santiago v. Ringle, 734 F.3d 585, 593 (6th Cir.
2013). The court may address either question first. Pearson v. Callahan, 555 U.S. 223, 236
(2009).
A.

Mootness

As an initial matter, the defendants argue that this case is moot because the state court
vacated all but one of the judgments and the Bureau released the liens and remaining judgment
against Daily Services. A case becomes moot, depriving federal courts of jurisdiction, “when the
issues presented are no longer ‘live’ or the parties lack a legally cognizable interest in the

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outcome.” Already, LLC v. Nike, Inc., 133 S. Ct. 721, 726 (2013) (quoting Murphy v. Hunt,
455 U.S. 478, 481 (1982) (per curiam)). “But a case ‘becomes moot only when it is impossible
for a court to grant any effectual relief whatever to the prevailing party.’” Chafin v. Chafin,
133 S. Ct. 1017, 1023 (2013) (quoting Knox v. Serv. Emps. Int’l Union, Local 1000, 132 S. Ct.
2277, 2287 (2012)). “As long as the parties have a concrete interest, however small, in the
outcome of the litigation, the case is not moot.” Knox, 132 S. Ct. at 2287 (quoting Ellis v.
Railway Clerks, 466 U.S. 435, 442 (1984)) (internal quotation marks and brackets omitted).
Daily Services’ federal complaint seeks compensatory and punitive damages caused by
the judgments and liens, not simply release from the judgments and liens. The damages claim
alone keeps this case alive. See Deakins v. Monaghan, 484 U.S. 193, 201–02 (1988) (concluding
that the Court had jurisdiction to address the plaintiffs’ claims for damages and attorney’s fees
even where their equitable claims were moot). Indeed, a claim for damages “remains live until it
is settled, judicially resolved, or barred by a statute of limitations.” Genesis Healthcare Corp. v.
Symczyk, 133 S. Ct. 1523, 1531 (2013). None of these three scenarios applies here. It is possible
for the court to grant effectual relief on Daily Services’ damages claim; Daily Services has a
concrete interest in the outcome of this litigation. The case, therefore, is not moot. See Chafin,
133 S. Ct. at 1023; Knox, 132 S. Ct. at 2287.
The defendants ignore this classic analysis, instead relying on Campbell v. City of Allen
Park, 829 F.2d 576 (6th Cir. 1987), WJW-TV, Inc. v. City of Cleveland, 878 F.2d 906 (6th Cir.
1989) (per curiam), and Braley v. City of Pontiac, 906 F.2d 220 (6th Cir. 1990). These cases are
unavailing.
Campbell relied solely on Punton v. City of Seattle, 805 F.2d 1378 (9th Cir. 1986), to
conclude that a plaintiff’s success in a prior state court proceeding rendered moot her federal
constitutional claim for additional money damages. See Campbell, 829 F.2d at 578–80. In
Campbell, a fired city employee sued the city in federal court under § 1983, seeking
reinstatement, back pay, damages for emotional distress, and attorney’s fees. Id. at 578. She
also appealed her discharge in state court. Id. The state court awarded back pay, and the city
reinstated her. Id. The federal court then dismissed the § 1983 action, and our court affirmed.
Id. at 577–78. “The constitutionality of [the employee’s] discharge became moot once she was

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restored to her job with a judgment for back pay,” this court concluded, and “[i]n light of
Punton,” the claim for attorney’s fees and additional damages did not keep the employee’s case
alive. Id. at 580. Punton, however, appeared to rely on the doctrines of claim preclusion and
election of remedies. 805 F.2d at 1381–82. Neither doctrine bears on the question of mootness.
Moreover, the Ninth Circuit later overruled Punton to the extent it rested on the election of
remedies doctrine. Haphey v. Linn Cnty., 953 F.2d 549, 551–52 (9th Cir. 1992) (en banc).
Campbell’s mootness conclusion resides on dubious ground and thus has little continuing
precedential value.
WJW-TV, too, does not help the defendants. That case’s holding does not apply where a
plaintiff seeks additional damages in federal court. See WJW-TV, 878 F.2d at 908. In WJW-TV,
the plaintiff TV station sought in federal court injunctive relief and attorney’s fees, but not
damages. See id. A state court later awarded, to another plaintiff, precisely the same injunctive
relief the TV station sought in federal court. Id. at 908–09. The state case arose from the
“identical facts” presented in WJW-TV and resolved “identical controversies.” Id. at 908, 910.
Under those unique circumstances, we found the TV station’s federal claim moot. Id. at 909–10.
But WJW-TV does not apply where, as here, the plaintiff seeks damages not sought in state court.
Braley is also inapplicable. There, a plaintiff filed suit in federal court alleging a § 1983
violation and three pendant state-law claims. Braley, 906 F.2d at 222. The district court
dismissed the three state-law claims without prejudice, and the plaintiff filed a separate
complaint in state court based on those three claims. Id. He recovered damages in state court on
two of the claims. Id. The federal court then dismissed the § 1983 suit, and our court affirmed,
holding that the plaintiff did not state an underlying constitutional claim. Id. at 222, 224. This
court also explained its view that “once [the plaintiff] obtained substantial satisfaction of his
underlying claim in state court, the federal issue . . . became moot.” Id. at 223. The court wrote
that “[a] supplemental § 1983 action is available where it seeks to vindicate a constitutional right
that was not adequately vindicated by the state law action.” Id.
We conclude that this take on mootness and the availability of a § 1983 action, expressed
in dicta, is not viable. First, the Braley court’s mootness reasoning relied heavily on Campbell,
which itself rested on dubious and subsequently overruled grounds. See Braley, 906 F.2d at

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223–24; see also Campbell, supra. Second, wholly absent from Braley’s reasoning is the
analysis typically used to assess mootness issues, including in § 1983 cases. See, e.g., Knox, 132
S. Ct. at 2287; Alvarez v. Smith, 558 U.S. 87, 92–94 (2009); Deakins, 484 U.S. at 199–202.
Third, the reasoning asks far too much of Parratt v. Taylor, 451 U.S. 527 (1981). Parratt bears
on the viability of a procedural due process claim. See 451 U.S. at 543–44. Parratt does not, as
the Braley court indicated, limit the availability of a § 1983 action itself, regardless of the
underlying constitutional claim.

Such reasoning improperly “confuses mootness with the

merits.” Chafin, 133 S. Ct. at 1024. It also collides with the well-established principles that a
plaintiff may maintain a § 1983 action without exhausting state judicial remedies, Monroe v.
Pape, 365 U.S. 167, 183 (1961), or state administrative remedies, Patsy v. Bd. of Regents,
457 U.S. 496, 516 (1982). And, in any event, Braley does not apply where, as here, the plaintiff
did not seek damages in state court.
B.

Qualified Immunity’s Clearly Established Law and Parratt

Our qualified immunity analysis first addresses the sole basis for the district court’s
decision: whether Daily Services’ claimed constitutional right was “clearly established.” A
constitutional right is clearly established where its contours are “sufficiently clear that a
reasonable official would understand that what he is doing violates that right”—in other words,
where “it would be clear to a reasonable officer that his conduct was unlawful in the situation he
confronted.” Anderson v. Creighton, 483 U.S. 635, 640 (1987); Brosseau v. Haugen, 543 U.S.
194, 199 (2004). An action’s unlawfulness must be apparent in light of pre-existing law, but the
very action in question need not previously have been held unlawful. Anderson, 483 U.S. at 640.
Indeed, “an action’s unlawfulness can be apparent from direct holdings, from specific examples
described as prohibited, or from the general reasoning that a court employs.”

Hensley v.

Gassman, 693 F.3d 681, 687 (6th Cir. 2012).
The district court granted qualified immunity because of uncertainty about whether the
Parratt doctrine applies in this case. To prevail on its due process claim, the court explained,
Daily Services must show that its claimed right to predeprivation process was clearly established.
The court recognized that, under the Parratt doctrine, a state need not provide predeprivation
process so long as it provides adequate postdeprivation remedies. The court then reasoned by

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this logic: Daily Services’ right to predeprivation process exists only if the Parratt doctrine does
not apply; it was uncertain, and therefore not clearly established, that the Parratt doctrine does
not apply; thus, it was not clearly established that Daily Services had a right to predeprivation
process. Under this formalist approach, the court granted the defendants qualified immunity.
The district court’s analysis erroneously fuses qualified immunity and Parratt, two
doctrines that should remain separate because they limit liability for different reasons. The
qualified immunity doctrine seeks to balance two competing interests: “the need to hold public
officials accountable when they exercise power irresponsibly and the need to shield officials
from harassment, distraction, and liability when they perform their duties reasonably.” Pearson,
555 U.S. at 231. At its core, qualified immunity “acts to safeguard government, and thereby to
protect the public at large, not to benefit its agents.” Wyatt v. Cole, 504 U.S. 158, 168 (1992).
The doctrine embodies “the importance of a damages remedy to protect the rights of citizens,”
for where a government official abuses her office, “an action for damages may offer the only
realistic avenue for vindication of constitutional guarantees.” Harlow v. Fitzgerald, 457 U.S.
800, 807, 814 (1982). But the doctrine also recognizes that, when officials reasonably act in
areas where the law is not clearly established, reducing their fear of being sued by protecting
them from damages liability better serves the public interest. See id. at 819. The “clearly
established” prong exists to allow officials “reasonably [to] anticipate when their conduct may
give rise to liability for damages.” Davis v. Scherer, 468 U.S. 183, 195 (1984).
The Parratt doctrine, in contrast, asks whether the state is responsible under the Due
Process Clause for its employee’s misconduct. If an official’s conduct would otherwise deprive
an individual of procedural due process but is “random and unauthorized,” the Parratt doctrine
allows the state to avoid liability by providing adequate remedies after the deprivation occurs.
See Hudson v. Palmer, 468 U.S. 517, 533 (1984). The key inquiry is “whether the state is in a
position to provide for predeprivation process.” Id. at 534. If not—because the official’s
conduct is random and unauthorized—the state is responsible for the official’s misconduct only
if it does not provide adequate postdeprivation remedies. See Brooks v. George Cnty., Miss.,
84 F.3d 157, 165 (5th Cir. 1996) (“The doctrine is meant to protect the state from liability for

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failing to provide predeprivation process in situations where it cannot anticipate the need for
such process (when actions are random and unauthorized).”).
In other words, qualified immunity prevents personal liability in order to allow officials
to act in the public interest where the law is not clearly established. The Parratt doctrine
prevents liability in order to allow the state to avoid responsibility for denying process it cannot
reasonably be expected to provide. See Zinermon v. Burch, 494 U.S. 113, 128, 129 (1990).
The applicability of Parratt, then, is irrelevant to the clearly established prong of the
qualified immunity analysis. As a colleague on our sister circuit noted, “Granting immunity
based on the lack of clarity as to whether the State bears responsibility would turn the qualified
immunity doctrine on its head. The official would in effect be seeking immunity based on a
‘reasonable’ belief that his conduct was so wrong—i.e., it was ‘random and unauthorized’—that
it could not provide the basis for a procedural due process claim.” San Gerόnimo Caribe
Project, Inc. v. Acevedo-Vilá, 687 F.3d 465, 500 (1st Cir. 2012) (en banc) (Lipez, J., concurring).
Qualified immunity exists to shield actions reasonable in light of current law without protecting
abuses of office. See Anderson, 483 U.S. at 638, 646. It would undermine that doctrine’s
purpose to find a due process violation but provide no remedy because the defendant could have
thought that Parratt would let him (and the state) off the hook for his violation of clearly
established due process law. San Gerόnimo, 687 F.3d at 500 (Lipez, J., concurring).
Indeed, the Supreme Court has never looked to the Parratt doctrine when assessing
whether a defendant deserves qualified immunity because the claimed procedural due process
right was not clearly established. Nor has our court ever held that uncertainty about whether
Parratt applies gives rise to qualified immunity. At times, in fact, we have suggested the
opposite. See, e.g., Silberstein v. City of Dayton, 440 F.3d 306, 315–18 (6th Cir. 2006) (finding
the plaintiff’s right to procedural due process violated in part because the Parratt doctrine did
not apply and, without reference to Parratt, finding the right clearly established); Thomas v.
Cohen, 304 F.3d 563, 579–81 (6th Cir. 2002) (same); Rodgers v. 36th Dist. Ct., 529 F. App’x
642, 649–51 (6th Cir. 2013) (denying qualified immunity by concluding, “[a]fter an extensive
survey of this court’s sometimes contradictory precedent,” that the Parratt doctrine did not
apply, and that the plaintiff’s right to procedural due process was clearly established).

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Some of our sister circuits and other courts also have suggested that uncertainty about the
Parratt doctrine does not affect the “clearly established” inquiry. See, e.g., Bailey v. Pataki, 708
F.3d 391, 404–08 (2d Cir. 2013) (finding, after lengthy discussion, a procedural due process
violation because the Parratt doctrine did not apply, and denying qualified immunity because the
due process right was clearly established); Stotter v. Univ. of Tex. at San Antonio, 508 F.3d 812,
821–23 (5th Cir. 2007) (reversing the district court’s decision that the Parratt doctrine applied,
and denying qualified immunity because the plaintiff had a clearly established right to
predeprivation process); Amsden v. Moran, 904 F.2d 748, 752, 756–57 (1st Cir. 1990) (assuming
that “plaintiff’s entitlement to due process was ‘clearly established,’” but granting qualified
immunity because the Parratt doctrine applied); Merritt v. Mackey, 827 F.2d 1368, 1372–73 (9th
Cir. 1987) (reversing the district court’s decision that the Parratt doctrine applied, and denying
qualified immunity because the plaintiff had a clearly established right to predeprivation
process); Roach v. City of New York, No. 88-cv-5234, 1992 WL 176944, at *4 (S.D.N.Y. July
10, 1992) (denying qualified immunity where defendant did not follow state predeprivation
procedures, and noting that “[w]hether or not Defendant’s actions were ‘random and
unauthorized’ in this case . . . is a different question from whether Defendant is entitled to
qualified immunity”).
A handful of other cases have discussed the Parratt doctrine while assessing whether the
claimed procedural due process right was clearly established, but none have examined whether
the Parratt doctrine is properly part of the clearly established law inquiry in the first place. See,
e.g., Clement v. City of Glendale, 518 F.3d 1090, 1096 (9th Cir. 2008) (granting qualified
immunity because the officer reasonably could have thought Parratt and other case law would
allow him to tow an unregistered vehicle without first notifying its owner); Powell v. Georgia
Dep’t of Human Res., 114 F.3d 1074, 1082–83 (11th Cir. 1997) (granting qualified immunity
because it was not clearly established that additional predeprivation procedures were feasible,
and thus the Parratt doctrine applied); Coriz v. Martinez, 915 F.2d 1469, 1470–71 (10th Cir.
1990) (granting qualified immunity because of uncertainty about the adequacy of postdeprivation
remedies under Parratt, though “conced[ing] that this is an unusual application of qualified
immunity”); Birkenholz v. Sluyter, 857 F.2d 1214, 1218 (8th Cir. 1988) (granting qualified
immunity because a reasonable officer could have believed that state law provided adequate

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These cases therefore fail to provide meaningful

guidance on the question before us.
Thus, while courts may consider the Parratt doctrine to determine whether the plaintiff
has alleged a procedural due process violation, courts should not consider the Parratt doctrine to
determine whether the due process right at issue was clearly established. The doctrine simply
has no place in assessing whether “it would be clear to a reasonable officer that his conduct was
unlawful in the situation he confronted.” Brosseau, 543 U.S. at 198–99.
Here, the district court erred when it granted qualified immunity based on its
understanding that the law “is unsettled as to whether the failure of a public official to follow
established procedure constitutes ‘random and unauthorized’ conduct, thereby triggering
Parratt.” Simply put, the court focused on the clarity of the wrong law. The inquiry is not
whether a reasonable official would understand that his wrongful denial of predeprivation
process might not ultimately amount to a due process violation by the state under the Parratt
doctrine. Rather, in the context of this procedural due process claim, the “clearly established
law” inquiry should ask whether a reasonable official would understand that the plaintiff was
entitled to notice and an opportunity to be heard before the official filed a judgment or lien
against the plaintiff.

See Silberstein, 440 F.3d at 316 (“[T]he inquiry over whether a

constitutional right is ‘clearly established’ must be undertaken in light of the specific context of
the case, not as a broad general proposition.”).
At the time of the defendants’ actions, it was clearly established that “even the temporary
or partial impairments to property rights that attachments, liens, and similar encumbrances entail
are sufficient to merit due process protection.” Connecticut v. Doehr, 501 U.S. 1, 12 (1991). As
the Supreme Court stated many years ago, “the root requirement” of due process protection is
“that an individual be given an opportunity for a hearing before he is deprived of any significant
property interest.” Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 542 (1985) (quoting
Boddie v. Connecticut, 401 U.S. 371, 379 (1971)) (internal quotation marks omitted). Indeed,
“[t]he right to prior notice and a hearing is central to the Constitution’s command of due
process.” United States v. James Daniel Good Real Prop., 510 U.S. 43, 53 (1993). “We tolerate
some exceptions to the general rule requiring predeprivation notice and hearing, but only in

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extraordinary situations where some valid governmental interest is at stake that justifies
postponing the hearing until after the event.” Id. (quoting Fuentes v. Shevin, 407 U.S. 67, 82
(1972)) (internal quotation marks omitted). Ohio law recognizes these requirements by requiring
the Bureau and its employees to provide notice and an opportunity to be heard before filing a
judgment or lien for unpaid premiums. See, e.g., Ohio Rev. Code Ann. § 4123.37; Ohio Admin.
Code § 4123-14-02.
It is well-established and unassailable that “a reasonably competent public official should
know the law governing his conduct.” Harlow, 457 U.S. at 819. Thus, if Daily Services has
alleged facts that make out a violation of its constitutional right to predeprivation process,
discussed infra, the only basis for qualified immunity would be the defendants’ reasonable
uncertainty about whether the circumstances presented “extraordinary situations where some
valid governmental interest” justified postponing notice or the opportunity to be heard until after
the deprivation. See James Daniel Good, 510 U.S. at 53. The facts of this case present no such
uncertainty. Reasonable officials in the defendants’ positions would know that predeprivation
process—notice and an opportunity to be heard—was required before filing the judgments and
liens against Daily Services.
C.

Procedural Due Process Violation

Though clearly established in this specific context, Daily Services’ right to procedural
due process has not been violated. States may not “deprive any person of life, liberty, or
property, without due process of law.” U.S. Const. amend. XIV, § 1. This clause has a
procedural component, which “is traditionally viewed as the requirement that the government
provide a ‘fair procedure’ when depriving someone of life, liberty, or property.” EJS Props.,
LLC v. City of Toledo, 698 F.3d 845, 855 (6th Cir. 2012) (quoting Collins v. City of Harker
Heights, 503 U.S. 115, 125 (1992)). To establish a procedural due process claim, a plaintiff must
show that (1) it had a life, liberty, or property interest protected by the Due Process Clause; (2) it
was deprived of this protected interest; and (3) the state did not afford it adequate procedural
rights. Women’s Med. Prof’l Corp. v. Baird, 438 F.3d 595, 611 (6th Cir. 2006). The defendants
do not contest that Daily Services’ complaint sufficiently alleges the first two elements, so we
address only the third.

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The Parratt doctrine

The Federal Constitution defines the procedures a state must follow when depriving an
individual of a property interest.

Loudermill, 470 U.S. at 541.

“Procedural due process

generally requires that the state provide a person with notice and an opportunity to be heard
before depriving that person of a property or liberty interest.” Warren v. City of Athens, Ohio,
411 F.3d 697, 708 (6th Cir. 2005). Ohio law recognizes these requirements. Before the Bureau
may file a judgment or lien for unpaid premiums, thereby depriving an individual of a property
interest, Ohio law requires the Bureau to provide notice and an opportunity to be heard. See,
e.g., Ohio Rev. Code Ann. § 4123.37; Ohio Admin. Code § 4123-14-02.
Under certain circumstances, however, a state may satisfy due process without providing
notice or an opportunity to be heard before the deprivation.

Three cases stake the main

guideposts of this notorious doctrine: Parratt v. Taylor, 451 U.S. 527 (1981); Hudson v. Palmer,
468 U.S. 517 (1984); and Zinermon v. Burch, 494 U.S. 113 (1990).
In Parratt, a state prison guard negligently destroyed a prisoner’s property. 451 U.S. at
529. The Supreme Court held that, even though it did not provide predeprivation process, the
state satisfied due process by providing adequate postdeprivation remedies. See id. at 543. The
Court explained that “either the necessity of quick action by the State or the impracticality of
providing any meaningful predeprivation process, when coupled with the availability of some
meaningful [postdeprivation remedy], can satisfy the requirements of procedural due process.”
Id. at 539. Because the deprivation at issue resulted from “a random and unauthorized act” and
not an “established state procedure,” the state could not predict precisely when the loss would
occur. Id. at 541, 543. (In fact, the deprivation resulted from the “unauthorized failure . . . to
follow established state procedure.” Id. at 543.) In such cases, the Court concluded, “it is not
only impracticable, but impossible, to provide a meaningful hearing before the deprivation.” Id.
at 541. The Court found that the state’s postdeprivation remedies “could have fully compensated
the [prisoner] for the property loss he suffered” and were sufficient to satisfy due process. Id. at
544. The Court reaffirmed and cabined Parratt in Logan v. Zimmerman Brush Co., 455 U.S. 422
(1982), holding that a state’s postdeprivation remedies alone will not satisfy due process if the

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deprivation resulted from conduct pursuant to an “established state procedure,” rather than
random and unauthorized conduct. Id. at 435–36.
Hudson extended Parratt to a state prison guard’s intentional destruction of a prisoner’s
property. 468 U.S. at 533. The Court recognized that “[t]he underlying rationale of Parratt is
that when deprivations of property are effected through random and unauthorized conduct of a
state employee, predeprivation procedures are simply ‘impracticable’ since the state cannot know
when such deprivations will occur.” Id. It explained that “[t]he state can no more anticipate and
control in advance the random and unauthorized intentional conduct of its employees than it can
anticipate similar negligent conduct,” rendering predeprivation process for such intentional
conduct equally impracticable. Id. In this situation, a state may satisfy due process by providing
a meaningful postdeprivation remedy. Id. Moreover, whether the state employee knew of the
deprivation in advance is irrelevant; instead, “[t]he controlling inquiry is solely whether the state
is in a position to provide for predeprivation process.” Id. at 534 (emphasis added).
The Court limited Parratt’s reach in Zinermon.

There, state mental hospital staff

admitted the plaintiff under a “voluntary” placement statutory procedure even though he was not
competent to give the informed consent required by the statute. See Zinermon, 494 U.S. at 118–
21. The plaintiff argued that the staff members deprived him of liberty without due process
when they failed to initiate the statute’s involuntary placement procedure. Id. at 123–24. The
Court held that, unlike in Parratt and Hudson, the existence of state postdeprivation remedies did
not satisfy due process. Id. at 139.
The Court cast Parratt and Hudson as special cases of the well-known due process
balancing test articulated in Mathews v. Eldridge, 424 U.S. 319 (1976). Zinermon, 494 U.S. at
128–30; see also Mathews, 424 U.S. at 335 (weighing the affected private interest, the risk of an
erroneous deprivation and probable value of additional procedural safeguards, and the
government’s interest). In Parratt and Hudson, “postdeprivation tort remedies are all the process
that is due, simply because they are the only remedies the State could be expected to provide”;
“no matter how significant the private interest at stake and the risk of its erroneous deprivation,
the State cannot be required constitutionally to do the impossible by providing predeprivation
process.” Zinermon, 494 U.S. at 128, 129 (internal citations omitted).

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The Court found Parratt and Hudson inapplicable in Zinermon for “three basic reasons.”
Id. at 136.

First, the Zinermon defendants could not claim that the deprivation was

unpredictable; any erroneous deprivation would occur “at a specific, predictable point.” Id. As
the Court explained, “the very nature of mental illness makes it foreseeable that a person needing
mental health care” might be willing to sign forms authorizing admission but be incompetent to
give informed consent. Id. at 133. Without some threshold determination of competency, such a
person might be confined without the procedural safeguards of the involuntary placement
process. Id. In Parratt and Hudson, however, the state could not anticipate precisely when
erroneous deprivations would occur. Id.
Second, the Zinermon defendants could not claim that predeprivation process was
impossible to provide. Id. at 136. The state already had an established procedure for involuntary
placement, and the admission statutes could have directed hospital staff “to determine whether a
person is competent to give consent” before allowing voluntary admission. Id. at 135, 136–37.
Had the state so limited and guided the defendants’ power to admit patients, the Court reasoned,
the deprivation might have been averted. Id. at 137. But in Parratt and Hudson, it would be
“absurd” to require the state to provide predeprivation process, such as a hearing to determine
whether a prison guard should mistakenly or intentionally destroy property. Id.
Third, the Zinermon defendants could not characterize their conduct as “unauthorized,”
as Parratt and Hudson used that term. Id. at 138. The Court maintained that “unauthorized” did
not mean simply that state law prohibited the action. See id. at 138 & n.20. Instead, the
defendants were “authorized” in a more general sense. The state delegated both the broad power
to deprive liberty and the state’s accompanying duty to provide adequate procedural protections.
Id. In other words, given their “broadly delegated, uncircumscribed power,” id. at 136, the
hospital staff had authority to deprive liberty with or without adequate procedural protections.
But in depriving liberty, the staff also had the accompanying duty to provide constitutionallyrequired procedural safeguards—which could have been provided by initiating the protections
for involuntary placement already set up by state law. The staff members abused their broad
authority by failing to initiate those statutory procedures. See id. at 135, 136, 138. In contrast,

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the Parratt and Hudson state employees had no similar broad authority and no similar duty to
initiate the procedural safeguards required before the deprivations occurred. Id. at 138.
Ultimately, the Court stated, the Zinermon plaintiff’s suit was “neither an action
challenging the facial adequacy of a State’s statutory procedures, nor an action based only on
state officials’ random and unauthorized violation of state laws.” Id. at 136. Unlike in Parratt
and Hudson, the deprivation in Zinermon was foreseeable and occurred at a predictable point in
the admission process, some predeprivation process could be of use in preventing the kind of
deprivation alleged, and the deprivation occurred at the hands of the state officials charged with
the power to effect the deprivation and the duty to implement procedural safeguards. Id. at
138B39. Unlike Parratt and Hudson, Zinermon did not present the “special instance of the
Mathews due process analysis where postdeprivation process is all that is due.” Id.
2.

Sixth Circuit precedent under the Parratt doctrine

Our own precedent has grappled with the Parratt doctrine. This court often has sought to
place procedural due process suits into two categories: “those involving a direct challenge to an
established state procedure” and “those challenging random and unauthorized acts.” Mertik v.
Blalock, 983 F.2d 1353, 1365 (6th Cir. 1993) (citing Macene v. MJW, Inc., 951 F.2d 700, 706
(6th Cir. 1991)); see also Warren, 411 F.3d at 709 (“Under circuit precedent, a § 1983 plaintiff
can prevail on a procedural due process claim by demonstrating that the property deprivation
resulted from either: (1) an established state procedure that itself violates due process rights, or
(2) a ‘random and unauthorized’ act causing a loss for which available state remedies would not
adequately compensate the plaintiff.”) (citing Macene, 951 F.2d at 706); Silberstein, 440 F.3d at
316 (contrasting a deprivation that occurs by an established state procedure with a random and
unauthorized deprivation). The Parratt doctrine operates only in the second category of cases.
See Warren, 411 F.3d at 709; Silberstein, 440 F.3d at 315 (“The rule requiring a § 1983 plaintiff
to show the inadequacy of a state’s post-deprivation corrective proceedings . . . applies only
where the deprivation complained of is random and unpredictable, such that the state cannot
feasibly provide a predeprivation hearing.”). A few Sixth Circuit opinions applied the Parratt
doctrine to a broader set of cases, but these attempts were rebuked. See Mitchell v. Fankhauser,
375 F.3d 477, 483–84 (6th Cir. 2004) (“We are therefore faced with deciding between multiple

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precedents on both sides—those that apply Parratt only to random, unauthorized deprivations of
property and those that apply Parratt more broadly. Our analysis convinces us that the correct
line of authority in the Sixth Circuit is that of [the former].”).
This court has wisely noted, however, that not all due process challenges can be easily
categorized as a direct challenge to an established state procedure or a challenge to random and
unauthorized conduct. Mertik, 983 F.2d at 1365. “Specifically, it is not necessarily the case that
a due process challenge to state action not involving an ‘established state procedure’ must
automatically come within the Parratt and Hudson rule governing random and unauthorized
acts.” Id. Where, as here, a plaintiff claims that the conduct at issue was not random and
unauthorized but also does not challenge the adequacy of an established state procedure, we
undertake a “careful scrutiny” of the three Zinermon factors to determine whether the Parratt
doctrine applies. Id. at 1366–67.
Courts may dismiss a procedural due process claim if the state provides an adequate
postdeprivation

remedy

and

“(1)

the

deprivation

was

unpredictable

or

‘random’;

(2) predeprivation process was impossible or impracticable; and (3) the state actor was not
authorized to take the action that deprived the plaintiff of property or liberty.” Copeland v.
Machulis, 57 F.3d 476, 479 (6th Cir. 1995) (per curiam) (citing Zinermon, 494 U.S. at 136–39).
Our court has explained that, in this analysis, “‘unauthorized’ means that the official in question
did not have the power or authority to effect the deprivation, not that the act was contrary to
law.” Warren, 411 F.3d at 709–10 (citing Zinermon, 494 U.S. at 138); see also Wedgewood Ltd.
P’ship I v. Twp. of Liberty, Ohio, 610 F.3d 340, 354 (6th Cir. 2010) (noting that “violations of
state law do not ‘automatically translate into a deprivation of procedural due process under the
United States Constitution’”) (quoting DePiero v. City of Macedonia, 180 F.3d 770, 788 (6th
Cir. 1999)).

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Application of the Parratt doctrine

On the specific facts of this case, we find that the Parratt doctrine applies and requires
Daily Services to plead that Ohio did not provide adequate postdeprivation remedies. Because
Daily Services failed to make such an allegation, the defendants must prevail on their motion for
judgment on the pleadings.
Daily Services’ complaint explicitly disclaims any challenge to the constitutionality of
Ohio’s predeprivation procedure statutes. Nevertheless, relying on Wedgewood, 610 F.3d at 355,
Daily Services argues that its complaint still challenges an “established state procedure” by
alleging that the defendants repeatedly failed to follow Ohio law. Wedgewood does not support
this reasoning. There, the court concluded that a township’s enactment of zoning instructions
constituted an established state procedure. Wedgewood, 610 F.3d at 355. Here, there is no
legislative action. Moreover, Wedgewood says nothing about how the repeated failure to follow
already-enacted state law might constitute an established state procedure. Contrary to Daily
Services’ argument, the “established state procedures” in this case are Ohio’s statutory and
administrative requirements for judgments and liens obtained by the Bureau.
Daily Services also claims that the challenged acts were not random or unauthorized. We
therefore carefully analyze the Zinermon factors. See Mertik, 983 F.2d at 1366–67. All three
Zinermon factors are present here, so the Parratt doctrine applies.
First, the defendants’ wrongful deprivations were unpredictable or “random” from the
state’s perspective. See Zinermon, 494 U.S. at 136. Daily Services disagrees, arguing that the
deprivations were predictable and not random because the defendants repeatedly ignored Ohio’s
procedures when filing the judgments and liens, and did so intending to shut down Daily
Services.

But as the defendants point out, the procedural violations varied.

The Bureau

erroneously filed two judgments and two liens without notice, erroneously filed one judgment
and one lien before Daily Services’ administrative appeal was resolved, and voluntarily released
one judgment and two liens. It would be difficult for the state to predict precisely when these
varied, intentional violations of state law would occur. Cf. Zinermon, 484 U.S. at 133, 136
(noting that any erroneous deprivation would occur at a “specific, predictable point”). This is
not a case in which the nature of the deprivation process—here, filing judgments and liens by

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Bureau employees—renders it foreseeable to the state that its employees would not follow state
law. Cf. id. at 133 (recognizing that “the very nature of mental illness makes it foreseeable” that
an erroneous deprivation of liberty could occur notwithstanding the state procedures).
Furthermore, as Hudson instructs, that the defendants intended to cause the deprivation does not
help Daily Services; the focus of due process is on what the state can anticipate. See 468 U.S. at
533–34. Nevertheless, we specifically leave open the question whether repeated violations of the
same or similar predeprivation state procedural rights over a period of time could be considered
“unpredictable,” even from the state’s point of view.
Second, predeprivation process was impracticable here. See Zinermon, 494 U.S. at 136–
37. Daily Services argues that Ohio already has procedures that provide predeprivation process,
thereby proving its practicality. This point is persuasive but carries the argument only halfway to
the goal line. The Zinermon Court identified a procedure in addition to those already in place
that the state could have implemented to avert the erroneous deprivation. See id. at 135–37
(noting that the statutes could have provided additional predeprivation process by directing
hospital staff “to determine whether a person is competent to give consent” before allowing
voluntary admission). To the question what more the Due Process Clause expected of the state,
the additional procedure supplied the answer.

But Daily Services does not identify any

additional, practical procedures Ohio could implement to thwart the wrongful filing of judgments
and liens. In fact, Daily Services’ complaint suggests that the defendants, “like the prison guard
in Hudson, were bent upon effecting the substantive deprivation and would have done so despite
any and all predeprivation safeguards.” Id. at 137. Considered from another angle, Ohio’s
current procedures do not protect against the specific risk in this case: that Bureau employees
will intentionally disregard the predeprivation safeguards already in place.

Additional

procedures to protect against this risk are impractical to provide. See Hudson, 468 U.S. at 533;
cf. Zinermon, 484 U.S. at 135; Powell, 114 F.3d at 1082 (denying the plaintiff’s claim in part
because “the Protocol already provides predeprivation procedures for caseworkers to follow,”
and “[t]here is no other feasible predeprivation procedure that is readily apparent to us”).
Third, the defendants were not “authorized” to take the actions that deprived Daily
Services of its property. See Zinermon, 494 U.S. at 138. Actions that merely violate state law

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might still be “authorized” under the Parratt analysis.

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Warren, 411 F.3d at 709–10; see

Zinermon, 494 U.S. at 138 & n.20. “Unauthorized” actions, in contrast, occur when the official
in question lacks the broad power or authority to effect the deprivation. Warren, 411 F.3d at
709–10. Here, this factor presents a close call. Nevertheless, we think that, although the state
has delegated the defendants the power to deprive property by filing judgments and liens, see,
e.g., Ohio Rev. Code Ann. § 4123.37, such power is not “broadly delegated” or
“uncircumscribed” as Zinermon used those terms, see 494 U.S. at 138.

The power is

circumscribed by Ohio’s detailed statutory and administrative requirements.
Daily Services argues that the defendants’ actions were “authorized” because they were
taken by high-ranking officials who abused their positions. But we need not resolve whether acts
by certain high-ranking officials should never be considered “random and unauthorized,” as the
Second Circuit has held. See Rivera-Powell v. N.Y. City Bd. of Elections, 470 F.3d 458, 465 (2d
Cir. 2006). But see San Gerόnimo, 687 F.3d at 493B94 (1st Cir.) (rejecting that proposition);
Johnson v. La. Dep’t of Agric., 18 F.3d 318, 322 (5th Cir. 1994) (same); Easter House v. Felder,
910 F.2d 1387, 1400 (7th Cir. 1990) (en banc) (same). Regardless of their positions, the
defendants were not authorized to effect deprivations in the way the Zinermon defendants were.
In light of the three Zinermon factors, “postdeprivation tort remedies are all the process
that is due, simply because they are the only remedies the State could be expected to provide.”
Zinermon, 494 U.S. at 128.

The Parratt doctrine therefore applies, and Daily Services’

procedural due process claims fail if Ohio provides an adequate postdeprivation remedy.
Copeland, 57 F.3d at 479. Daily Services’ complaint does not allege that Ohio’s postdeprivation
remedies are inadequate.

Moreover, “[a]lthough the state remedies may not provide the

respondent with all the relief which may have been available if he could have proceeded under
§ 1983, that does not mean that the state remedies are not adequate to satisfy the requirements of
due process.” Parratt, 451 U.S. at 544. In other words, Daily Services must explain why the
ability to be heard in state court and to vacate the wrongful judgment and liens, even in the
absence of damages, is insufficient to remedy the defendants’ process violations. A convincing
argument on this point might exist, but Daily Services has not offered it. Thus, under Parratt,
Daily Services’ complaint does not state a claim for a procedural due process violation.

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III. CONCLUSION
The district court erred when it held that uncertainty about the applicability of Parratt
entitled the defendants to qualified immunity. Nevertheless, because the Parratt doctrine does
apply, and Daily Services has not pleaded that Ohio provided inadequate postdeprivation
remedies, Daily Services’ complaint does not state a constitutional violation. Accordingly, we
affirm the district court’s decision granting the defendants’ motion for judgment on the
pleadings.

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_______________________________________________________
CONCURRING IN PART AND DISSENTING IN PART
_______________________________________________________
KAREN NELSON MOORE, Circuit Judge, concurring in part and dissenting in part. I
agree entirely with the majority’s well-written and well-reasoned explanation of the relationship
between the Parratt and qualified-immunity doctrines.

However, I cannot concur in the

majority’s ultimate conclusion that the Parratt doctrine applies in this case, because I do not
believe that the defendants’ actions were “unauthorized” as defined by the Supreme Court in
Zinermon v. Burch, 494 U.S. 113, 138 (1990). As a result, I must respectfully dissent from Part
II.C.3 of the lead opinion.
In Zinermon, “[t]he State delegated to [the defendants] the power and authority to effect
the very deprivation complained of . . . , and also delegated to them the concomitant duty to
initiate the procedural safeguards set up by state law to guard against unlawful confinement.” Id.
The Court distinguished that case from Parratt v. Taylor, 451 U.S. 527 (1981), and Hudson v.
Palmer, 468 U.S. 517 (1984), by noting that the state employees in those cases “had no similar
broad authority to deprive prisoners of their personal property, and no similar duty to initiate (for
persons unable to protect their own interests) the procedural safeguards required before
deprivations occur.”

Zinermon, 494 U.S. at 138.

Thus, the Court concluded that “[t]he

deprivation [in Zinermon was] ‘unauthorized’ only in the sense that it was not an act sanctioned
by state law, but, instead, was a ‘depriv[ation] of constitutional rights . . . by an official’s abuse
of his position.’” Id. (quoting Monroe v. Pape, 365 U.S. 167, 172 (1961)) (third alteration and
ellipsis in original). As a result, Zinermon allowed the plaintiff’s due-process claim, which
focused on the denial of predeprivation process, to go forward.
The case here is similar to Zinermon. Section 4123.37 of the Ohio Revised Code grants
the Bureau power to present the Court of Common Pleas clerk with the Bureau’s assessment of
premiums in arrears and to cause a judgment to be entered against the noncompliant employer.
Ohio law also imposes upon the Bureau, and its employees, the responsibility to follow the
procedural safeguards set forth in § 4123.37 to protect the due-process rights of the
noncompliant employers.

The fact that the defendants failed to follow the state-mandated

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procedures does not mean that they were not legally empowered to effect those deprivations. As
a result, I would hold that the defendants’ actions were authorized and, therefore, that the Parratt
doctrine does not apply. Plaintiff should be able to proceed on its claim based on a denial of
predeprivation process, and defendants’ motion for judgment on the pleadings should be denied.
Because the majority sees this close question differently, I must respectfully dissent.