           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT  United States Court of Appeals
                                                    Fifth Circuit

                                                 FILED
                                                                          December 8, 2009

                                       No. 09-20006                    Charles R. Fulbruge III
                                                                               Clerk

Thomas Chavers; Sandra Portzer; All American Roadrunners LP; Brazos
Valley Roadrunners LP; Brazos Valley Carriage Company LP

                                                   Plaintiffs - Appellants
v.

Tyrone Morrow; City of Bryan Texas; City of College Station Texas; Brazos
County, TX; Michael Ikner

                                                   Defendants - Appellees




                   Appeal from the United States District Court
                        for the Southern District of Texas
                              USDC No. 08-CV-3286


Before JOLLY, WIENER, and BARKSDALE, Circuit Judges.
PER CURIAM:*
       This interlocutory appeal, pursuant to 28 U.S.C. § 1292(a), contests the
denial of a preliminary injunction. Tow-truck companies and their owners seek
defendants being required to keep the companies on nonconsent tow-rotation
lists while this action is pending. AFFIRMED.




       *
         Pursuant to 5TH CIR . R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .
R. 47.5.4.
                                  No. 09-20006

                                        I.
      Plaintiffs Sandra Portzer and Thomas Chavers own plaintiff tow-truck
companies (the businesses). The businesses were removed from tow-rotation
lists maintained by the police departments of defendant cities of Bryan and
College Station, Texas, and used by police and other law enforcement agencies
to delegate nonconsent tows. Defendant Brazos County uses Bryan’s list. (When
this action was filed, Defendants Tyrone Morrow and Michael Ikner were the
police chiefs of Bryan and College Station, respectively. The parties agree that
Morrow is no longer the police chief of Bryan; it appears the same is true for
Ikner for College Station.)
      Materially identical city ordinances authorize the rotation lists. These
ordinances provide, in relevant part:
      TOW ROTATION LIST

      (1) Qualifications

      The [Bryan / College Station] Police Department shall establish and
      maintain a tow rotation list. Each tow company is qualified to be on
      such list if it maintains a twenty-four (24) hour tow service; has one
      (1) telephone number which is answered twenty-four (24) hours a
      day, seven (7) days a week; and [meets ADA-related criteria]. To be
      eligible to be placed on the tow rotation list, a tow company shall
      certify in writing that [the vehicle storage facility it uses] meets or
      exceeds the criteria set forth on an ADA accessibility form, a copy of
      which will be provided by the City at the time the tow company
      applies for inclusion on the tow rotation list.

      ***

      I. ADMINISTRATIVE PENALTIES FOR VIOLATIONS

      In addition to the criminal penalties imposed for violations of state
      law or this ordinance, any tow company on the tow rotation list that
      violates this ordinance or state law may be subject to sanctions by
      the Chief of Police, depending upon the nature of the infraction,


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                                  No. 09-20006

      number of infractions, and other circumstances. The sanctions shall
      range from written notification of violation with warning to, and
      including, removal from the tow rotation list.

B RYAN, T EX., C ODE §§ 126-158, 126-164 (emphasis added); C OLLEGE S TATION,
T EX., C ODE ch. 4, § 10(C)(1), (I); see also T EX. O CC. C ODE A NN . §§
2308.201–2308.208 (authorizing municipalities to promulgate this type of
regulation).
      In October and November 2008, plaintiffs received suspension letters from
Chiefs Morrow and Ikner, noting plaintiffs’ removal from the cities’ tow-rotation
lists. These letters cited “numerous complaints” of criminal activity allegedly
committed by persons involved with the businesses and cited the safety of
citizens as a paramount concern. As a result of removal from the lists, plaintiffs
are no longer eligible to perform nonconsent tows in the relevant jurisdictions.
Such tows allegedly provided half of the businesses’ income. (Removal did not
preclude them from engaging in private tows and other private business.)
      Plaintiffs filed this action, claiming defendants are liable: through § 1983,
for violation of their due-process, equal-protection, and First Amendment rights;
for racketeering, pursuant to 18 U.S.C. § 1964; and for state-law claims for libel,
business disparagement, civil conspiracy, and abuse of process.            In the
complaint, plaintiffs requested, inter alia, a preliminary injunction, requiring
defendants to keep the businesses on the tow-rotation lists while this action is
pending.
      Plaintiffs moved for a temporary restraining order (TRO) and for a
preliminary injunction. After a telephonic hearing, the district court denied the
TRO. (Plaintiffs filed a renewed TRO motion.)
      Shortly thereafter, the district court held a hearing on the preliminary-
injunction motion. The court limited the hearing, however, to whether the
businesses had a property interest in remaining on the towing list.              A


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                                  No. 09-20006

preliminary injunction was denied, on the grounds that, based on evidence
developed to that point in time, plaintiffs are unlikely to show they have such an
interest. A motion for reconsideration was denied.
                                        II.
      Under the well-established standard for a preliminary injunction’s being
granted, such relief
      is an extraordinary remedy that should only issue if the movant
      shows: (1) a substantial likelihood of prevailing on the merits; (2)
      a substantial threat of irreparable injury if the injunction is not
      granted; (3) the threatened injury outweighs any harm that will
      result to the non-movant if the injunction is granted; and (4) the
      injunction will not disserve the public interest.

Ridgely v. Fed. Emergency Mgmt. Agency, 512 F.3d 727, 734 (5th Cir. 2008)
(citing Karaha Bodas Co. v. Perusahaan Pertambangan Minyak Dan Gas Bumi
Negara, 335 F.3d 357, 363 (5th Cir. 2003)).
      For the denial of a preliminary injunction, the district court’s factual
findings are reviewed for clear error; its legal conclusions, de novo. E.g., Guy
Carpenter & Co. v. Provenzale, 334 F.3d 459, 463 (5th Cir. 2003) (citing Kern
River Gas Transmission Co. v. Coastal Corp., 899 F.2d 1458, 1462 (5th Cir.
1990)). The district court’s ultimate decision is reviewed for abuse of discretion,
id.; and, only under “‘extraordinary circumstances’ will we reverse the denial of
a preliminary injunction”, Anderson v. Jackson, 556 F.3d 351, 355–56 (5th Cir.
2009) (quoting White v. Carlucci, 862 F.2d 1209, 1211 (5th Cir. 1989)). Of
course, neither denial of a preliminary injunction, nor our review of that denial,
is determinative of an action’s merits. See Ridgely, 512 F.3d at 735 (“We agree
that at this time plaintiffs have not made this required showing. Standing alone,
the statute and regulations . . . are not sufficient to create a property interest.
The possibility remains that plaintiffs can establish a property interest . . . .”
(emphasis added)).


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                                  No. 09-20006

      As noted, in denying a preliminary injunction, the district court reached
only the first prong of the preliminary-injunction analysis: likelihood of success
on the merits. And, in that regard, the court ruled only on whether plaintiffs
have a property interest in remaining on the tow lists and held one did not exist.
Accordingly, our review turns on that issue.
      Plaintiffs contend the ordinances: create a legitimate claim of entitlement
in remaining on the lists; and afford the police no discretion in administering
them. For the following reasons, and based on the record for this interlocutory
appeal from the denial of a preliminary injunction, although the ordinances do
provide a tow-rotation scheme that could give rise to a property interest, see
Blackburn v. City of Marshall, 42 F.3d 925 (5th Cir. 1995), they do not contain
the mandatory language required to create such an interest, see Ridgely, 512
F.3d 727.
      Blackburn considered whether a towing company had a property interest
in remaining on a tow-rotation list. The list at issue in Blackburn was operated
by a private association of tow companies, and government officials did not “play
any role in the Association’s selection of the on-call wrecker”. 42 F.3d at 930.
Blackburn surveyed a number of cases that considered whether there were
property interests in remaining on tow-rotation lists, and concluded: “Where a
court has found a property interest on a rotation list, the plaintiff has alleged a
claim of entitlement supported or created by a formal and settled source such as
a state statute or regulatory scheme”. Id. at 938. Blackburn held plaintiffs had
no property interest in remaining on the list because there was “no Texas or
local statute, ordinance, or regulatory scheme governing the wrecker list”. Id.
at 941. Our court noted that, rather than a “constitutionally protected claim of
entitlement to remain on the rotation list”, they had “merely alleged a unilateral
expectation of receiving government referrals”. Id. at 937.



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                                   No. 09-20006

      Unlike in Blackburn, of course, ordinances do govern the tow-rotation lists
at issue here. Therefore, this action falls into the category of tow-rotation
schemes under which plaintiffs may have a property interest. As a result, at
issue is whether, for purposes of obtaining a preliminary injunction, the
ordinances’ language confers that interest.
      “To determine whether statutes or regulations create a protected property
interest, we must ask whether they place ‘substantive limitations on official
discretion.’” Ridgely, 512 F.3d at 735 (quoting Olim v. Wakinekona, 461 U.S.
238, 249 (1983)). “In determining whether statutes and regulations limit official
discretion, the Supreme Court has explained that we are to look for ‘explicitly
mandatory language,’ i.e., specific directives to the decisionmaker that if the
regulations’ substantive predicates are present, a particular outcome must
follow.” Id. at 735–36 (emphasis added) (quoting Ky. Dep’t of Corr. v. Thompson,
490 U.S. 454, 463 (1989)).
      The ordinances do employ mandatory language in stating the police
departments “shall establish and maintain . . . tow-rotation list[s]”. B RYAN,
T EX., C ODE § 126-158 (emphasis added); C OLLEGE S TATION, T EX., C ODE ch. 4, §
10(C)(1). There is no such mandatory language, however, specifying which tow
companies are eligible to be, or remain, on the list. For example, the ordinance
states: “[e]ach tow company is qualified to be on such list if . . .”; and, “[t]o be
eligible to be placed on the tow rotation list . . . .” Id. (emphasis added). This is
not mandatory language, and does not explicitly require the police departments,
which are charged with maintaining the lists, to place, or keep, on the list any
and all companies that meet the ordinances’ criteria.
      Moreover, the ordinances include a section providing “administrative
penalties for violations”, warning that “any tow company on the . . . list that
violates this ordinance or state law may be subject to sanctions by the Chief of
Police, . . . from written notification of violation with warning to, and including,

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                                  No. 09-20006

removal from the tow rotation list”. B RYAN, T EX., C ODE § 126-164; C OLLEGE
S TATION, T EX., C ODE ch. 4, § 10(I). This provision does not explicitly state
whether it provides the exclusive means for removing a tow company from the
list, and it contains no “explicitly mandatory language” limiting the police
departments’ discretion to “maintain” the tow-rotation lists. See Ridgely, 512
F.3d at 735–36.
      In sum, for our interlocutory review of the denial of a preliminary
injunction, the ordinances do not limit discretion sufficiently to confer a property
interest in remaining on the tow-rotation list; the ordinances do not contain the
requisite mandatory language. This is especially true in the light of our policy
of construing ambiguities in defendants’ favor where a purported property
interest is not “unequivocally granted in clear and explicit terms”. Batterton v.
Tex. Gen. Land Office, 783 F.2d 1220, 1223 (5th Cir. 1986) (holding, in deciding
whether Texas law confers a property interest, that purported “legislative grants
of property, rights, or privileges must be construed in favor of the state . . . and
whatever is not unequivocally granted in clear and explicit terms is withheld”
(quoting Texas v. Standard, 414 S.W. 2d 148, 153 (Tex. 1967))); see also Mills v.
Brown, 316 S.W. 2d 720, 723 (Tex. 1958) (“The same rules apply to the
construction of municipal ordinances as to the construction of statutes.”).
      At present, plaintiffs present only an “assumption of a right to
. . . government business”. See Blackburn, 42 F.3d at 941. The Constitution
does not protect such an interest, especially where plaintiffs, as here, remain
free to engage in private business. See id. Therefore, the district court did not
abuse its considerable discretion in denying a preliminary injunction.          See
Anderson, 556 F.3d at 355–56 (noting that “extraordinary circumstances” are
required to reverse a preliminary injunction). The possibility remains, of course,
that further proceedings may demonstrate a property interest. See Ridgely, 512
F.3d at 735.

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                            No. 09-20006

                                 III.
    For the foregoing reasons, the denial of a preliminary injunction is
AFFIRMED.




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