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In an important civil rights decision, the 5th U.S. Circuit Court of Appeals ruled last week that a “malicious prosecution” claim, standing alone, does not violate the U.S. Constitution. The Dec. 8 en banc opinion in Castellano v. Fragozo, et al. represents the court’s attempt to clarify its confusing case law concerning malicious prosecutions. And it serves as a warning for attorneys to untangle litigation involving 42 U.S.C. �1983 civil rights claims from allegations that are based in state malicious-prosecution tort law, according to four experts. The case involves a 19-year-old dispute involving Alfred Castellano, the owner of a chain of San Antonio fast-food restaurants who was convicted in 1984 of arson after one of his restaurants burned down and sentenced to probation. The Texas Court of Criminal Appeals overturned Castellano’s conviction in 1993, ruling that there was insufficient evidence in his case, according to the 5th Circuit opinion. On remand regarding Castellano’s habeas corpus claim, a state district court judge found that Maria Sanchez, a former employee of Castellano’s, and Chris Fragozo, a San Antonio police officer who worked off-duty as a security officer for Castellano, had conspired to tape record Castellano and alter the tapes to make it appear that Castellano admitted to the arson when he actually had no knowledge of it, according to the 5th Circuit opinion. Castellano’s conviction was overturned and the Bexar County DA’s office decided not to retry him. In 1994, Castellano sued Sanchez and Fragozo in San Antonio’s 288th District Court, alleging civil rights violations, but the case moved to federal court after Castellano amended his pleading to allege malicious prosecution under �1983. Castellano later abandoned his state-law claim. U.S. Magistrate Judge John W. Primomo of San Antonio presided over the 2002 civil trial, in which a jury found that Sanchez conspired with Fragozo to deny Castellano his constitutional rights. The jury also found that Fragozo acted under the color of law in committing malicious prosecution against Castellano. The jury awarded Castellano $3.5 million in damages, and Fragozo and Sanchez appealed to the 5th Circuit. Both deny any wrongdoing. A three-judge 5th Circuit panel affirmed the jury award in all respects in a Nov. 20, 2002, opinion. But in an en banc rehearing, the full court reversed and remanded the case for a new trial. Circuit Judge Patrick Higginbotham wrote the majority opinion. Higginbotham found that a malicious-prosecution case must rest upon a denial of rights secured under federal — not state — law. But Higginbotham acknowledged the difficult position in which the ruling places Castellano and other parties in the case. “Castellano amended his complaint, purposely abandoning his claim under state law. He did so because our case law said the elements of malicious prosecution under state law and under a �1983 claim were the same,” Higginbotham wrote. “We have pulled that legal rug from under all the parties.” “In sum, we reverse the judgment and remand the case for a new trial of Castellano’s federal and state claims under the Fourth and Fourteenth amendments and any state claims he may have,” Higginbotham wrote. In a concurring and dissenting opinion, Judge Rhesa Hawkins Barksdale disagreed that Castellano should be granted a new trial. Barksdale wrote that Castellano should not be granted a new trial because he abandoned his state claim and other issues on appeal. “Although I fully concur in our finally proscribing a claim under �1983 for malicious prosecution, I must respectfully dissent from both the creation of the new �1983 due process remedy and the remand of this action for yet another round of litigation,” Barksdale wrote in an opinion joined by Judge Emilio M. Garza. “This is not an unfair result — far from it,” Barksdale wrote. “It is the result for which Castellano, by his election on appeal, rolled the dice � and lost. “ Tim Soefje, a senior associate with San Antonio’s Thorton, Summers Beichlin Dunham & Brown who represents Castellano, says he is disappointed that the court chose his case to correct its position on malicious-prosecution claims. “The court chose Mr. Castellano’s case — where the facts are so egregious and the judgment was so large — to throw out more than 20 years of 5th Circuit precedent,” Soefje says. But the news isn’t all bad, Soefje says. “We are happy that the 5th Circuit has recognized our right to plead our claims under the 14th Amendment, state law and all other claims. “ Soefje says he is weighing whether to appeal the case to the U.S. Supreme Court or to retry the case. Mark Ralls, a partner in San Antonio’s Chaves Gonzales & Hoblit who represents Fragozo, is pleased with the ruling. “It’s clearly a win for us anytime you reverse a $3.5 million verdict,” Ralls says. “We don’t intend to offer anything to make it go away at this point. If the plaintiffs take it to the Supreme Court, we’ll go there. And if they want to go to the trial court, we’ll try it again. “ Steven Harkiewicz, a San Antonio solo who represents Sanchez, also is happy with the decision, although he wishes the majority had heeded Barksdale’s dissent and rendered the case. “The dissent was correct and they should have reversed and rendered as opposed to reverse and retrial,” Harkiewicz says. NOT THE END Cases with specific malicious-prosecution claims may be dead on the federal level in Texas, but it doesn’t mean they can’t be litigated, says Frank Ford, an associate with San Antonio’s Allen, Stein & Durbin. “I think the court does recognize as a practical matter that if you do maliciously prosecute someone, you are violating their constitutional rights,” says Ford, who has a malicious-prosecution appeal pending before the 5th Circuit. Charles “Rocky” Rhodes, a professor at South Texas College of Law who teaches constitutional law and procedure, agrees. He believes Castellano does not mean the end of federal litigation of cases alleging police misconduct. Castellano implies that attorneys must tailor their police misconduct cases to specific illegal search and seizure claims under the Fourth Amendment or due-process violations under the 14th Amendment instead of simply alleging malicious prosecution, Rhodes says. “You need to couch your claim,” he adds. “Certainly you can allege a state law malicious-prosecution claim” in state court. “But that just doesn’t get you the benefits of a �1983 action. “ But the real controversy among the 5th Circuit judges about the implications of Castellano may be unspoken, says David Schenck, an appellate lawyer and partner in Dallas’ Hughes & Luce. He believes the judges may have been concerned with the implications Castellano would have on litigious criminal defendants who have their convictions overturned for a variety of reasons. “On one hand you don’t want the guy that manages to beat the rap somehow turning around and turning that into a lawsuit looking for a recovery and his attorneys’ fees,” Schenck says. “But if you’ve got a genuine perversion of the truth-finding process, you’ve got to have a federal remedy.” Castellano may affect �1983 litigation filed by numerous plaintiffs against the city of Dallas and individual police officers in which the plaintiffs allege malicious prosecution. In 2002, Dallas solo Don Tittle filed Cruz v. De La Paz, et al. in U.S. District Court in Dallas on behalf of 16 people who were arrested by Dallas police in connection with the so-called “fake drugs scandal.” Many of those arrested were Mexican immigrants arrested for drug possession, but the “drugs” turned out to be ground up chalk. “It sounds like there may be a need to re-plead the case,” Tittle says. “But I don’t think it would change anything except how you phrase the charge to the jury. “ Joe Tooley, a Rockwall solo who represents former Dallas police officer Mark De La Paz and Dallas police officer Eddie Herrera in the case, doesn’t think Castellano will have much of an effect on the defendants in the case. Jason Schuette, a Dallas assistant city attorney who represents the city of Dallas in the suit, agrees. “It’ll cause some of the pleadings to have to be cleaned up a little bit,” Tooley says. “But beyond that I don’t see it having a substantial effect. “

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