McGowan v. Hous. Auth. of New Orleans

• Decision Date: 27 March 2013
• Docket Number: No. 2012–CA–1418.,2012–CA–1418.
• Citation: 113 So.3d 1143
• Parties: Chequita McGOWAN v. HOUSING AUTHORITY OF NEW ORLEANS.
• Court: Court of Appeal of Louisiana — District of US

113 So.3d 1143

Chequita McGOWAN

v.HOUSING AUTHORITY OF NEW ORLEANS.

No. 2012–CA–1418.

Court of Appeal of Louisiana,

Fourth Circuit.

March 27, 2013.

Ronald L. Wilson, New Orleans, LA, for Plaintiff/Appellant.

Rachel W. Wisdom, Stone Pigman Walther Wittmann LLC, New Orleans, LA, for Defendant/Appellee.

(Court composed of Chief Judge JAMES F. McKAY, III, Judge ROSEMARY LEDET, Judge PAUL A. BONIN).

ROSEMARY LEDET, Judge.

[4 Cir. 1]This is a retaliatory discharge suit. Chequita McGowan, a former public employee, commenced this suit against her former public employer, the Housing Authority of New Orleans (“HANO”). She alleged that HANO discharged her for speaking out on matters of public concern in violation of the right to freedom of expression under La. Const. art. I, § 7.¹ From the trial court's decision granting HANO's peremptory exception of no cause of action and its motion for summary judgment, Ms. McGowan appeals. For the reasons that follow, we affirm.

FACTUAL AND PROCEDURAL BACKGROUND

For clarity of discussion, the factual and procedural background of this case is divided into three sections: (i) Ms. McGowan's HANO employment history, (ii) HUD's control of HANO, and (iii) Ms. McGowan's lawsuit history.

(i) Ms. McGowan's HANO employment history

In 1997, Ms. McGowan was hired by HANO as a Human Resource Analyst 3. Four years later, she was promoted to Human Resources Manager. She was later reassigned to the position of Director of Public Housing Management. [4 Cir. 2]This reassignment was followed by another one to the position of Director of Asset Management, the position she held in August 2005 when Hurricane Katrina struck the New Orleans area. Following the hurricane, Ms. McGowan was not recalled to work. In response, she filed a complaint with the Civil Service Commission. Thereafter, she was reinstated to her prior position of Director of Asset Management.²

In May 2008, HANO eliminated the position of Director of Asset Management. According to Ms. McGowan, she was told that she had to formally apply for any vacancy that existed and that if she was not selected, she would be terminated. According to HANO, Ms. McGowan was given the opportunity to apply for other HANO positions that came available. She was offered at least two positions—Senior Asset Manager and Senior Project Manager. She selected the Senior Project Manager position, the position she held in June 2010 when HANO discharged her.

(ii) HUD's control of HANO

HANO is a local public housing authority (“PHA”), which was established under Louisiana law. See Leaman & Reynolds Ins. Agency, Inc. v. Housing Authority of City of New Orleans, 159 So.2d 365 (La.App. 4th Cir.1964)(describing HANO as “a public corporation organized pursuant to the provisions of LSA–R.S. 40:391 et seq.”). HANO was established to receive federal funding to develop low income housing for New Orleans area residents. It was established in conformity with the United States Housing Act of 1937, 42 U.S.C. § 1437, et seq. (the “Housing Act”).

[4 Cir. 3]The Housing Act authorizes the Secretary of HUD to take control of a PHA that is in “substantial default.” 42 U.S.C. § 1437d. When in control of a PHA, the Secretary of HUD is authorized by the Housing Act to take the following actions:

• It may abrogate any contract to which the United States or a U.S. agency is not a party that substantially impedes correction of the agency's default, if efforts to renegotiate the contract fail.

• It may demolish or dispose of PHA property ... including transferring properties to resident-supported nonprofit entities.

• If considered appropriate by HUD and permitted under state and local law, it may seek the establishment of one or more new PHAs or the consolidation of part or all of the PHA into other, well-managed PHAs.

• It will not have to comply with any state or local law relating to civil service requirements, employee rights (except civil rights), procurement, or financial or administrative controls that, in the opinion of the [Secretary of HUD] ..., substantially impedes correction of the default.

Barry Jacobs, HDR HDBK. OF HOUSING AND DEV. LAW § 2:134 (2012).³

In February 1996, shortly before HANO hired Ms. McGowan, the Secretary of HUD, acting pursuant to 42 U.S.C. § 1437d, determined that HANO was in [4 Cir. 4]“substantial default” and took control of HANO. Throughout Ms. McGowan's employment at HANO, HUD was in control of HANO.

Until April 2008, HANO employees, with minor exceptions not relevant here, were covered by the Louisiana Civil Service. See Department of State Civil Service v. Housing Authority of East Baton Rouge, 95–1959, p. 5 (La.App. 1 Cir. 5/10/96), 673 So.2d 726, 730 (noting that “[a]s nonexcluded employees of a state agency or instrumentality, the PHA's other employees are therefore classified civil servants of the State of Louisiana.”) In April 2008, the Secretary of HUD, again acting pursuant to the Housing Act, determined that it was necessary to exempt HANO's employees from Louisiana civil service protections except for certain rules pertaining to civil rights (the “2008 HUD Determination”).⁴

(iii) Ms. McGowan's lawsuit history

Ms. McGowan has filed a trio of lawsuits, including this one, that is relevant to the instant appeal:

• In August 2007, she sued HANO in Civil District Court seeking back pay retroactive to November 2005 when she claimed she should have been called back to work after the hurricane. HANO settled this claim.

• In December 2008, Ms. McGowan and several other HANO employees (collectively the “McGowan Petitioners”) filed suit against the Secretary of HUD and the Louisiana Civil Service Commission (“LCSC”) in federal district court challenging the 2008 HUD Determination and alleging discrimination by HANO itself (the “2008 Suit”). (HANO was not expressly named as a defendant in the 2008 Suit.) The McGowan Petitioners claimed that the Secretary of HUD improperly determined that the state civil service rules were substantially impeding efforts to correct HANO's substantial default. The plaintiffs further claimed that the LCSC acquiesced in the 2008 HUD Determination and failed to act on their behalf [4 Cir. 5]when they appealed that determination to the Civil Service Commission. In December 2009, the federal district court dismissed the suit. McGowan v. U.S. Dep't of Housing and Urban Dev. (08–3335 E.D.La. 12/31/09). In an unpublished opinion, the federal Fifth Circuit Court of Appeals affirmed. McGowan v. U.S. Dep't of Housing and Urban Dev., 388 Fed.Appx. 433 (5th Cir.2010).

• In December 2010, Ms. McGowan filed the instant suit alleging violations of constitutional and civil rights and seeking reinstatement and damages. In March 2012, HANO filed an exception of no cause of action and a motion for summary judgment. Following a hearing, the trial court in May 2012 rendered judgment in favor of HANO granting its peremptory exception of no cause of action and its motion for summary judgment. The trial court thus dismissed Ms. McGowan's suit with prejudice. In so doing, the trial court expressly found that “Ms. McGowan's asserted speech did not involve a matter of public concern.”

From the trial court's May 2012 judgment dismissing her suit, Ms. McGowan appeals.

DISCUSSION

Although a peremptory exception of no cause of action and a motion for summary judgment are different procedural devices, under the facts and circumstances presented in this case it is unnecessary to differentiate between those two procedural devices.⁵ Both the granting of an exception of no cause of action and the granting of a motion for summary judgment are reviewed under a de novo standard. Friel v. Louisiana Citizens Property Ins. Corp., 11–1032, pp. 4–5 (La.App. 4 Cir. 2/8/12), 85 So.3d 180, 183 (no cause of action); ⁶[4 Cir. 6]Johnson v. LoyolaUniversity of New Orleans, 11–1785, pp. 7–8 (La.App. 4 Cir. 8/8/12), 98 So.3d 918, 923–24 (summary judgment). ⁷

Ms. McGowan's claim against HANO is based on LA CONST Art. 1, § 7, pertaining to the right to freedom of expression. In the petition, she alleges that the violation consisted of the following:

The secretary of [HUD] ..., allegedly pursuant to the authority vested in him, removed all of the employees of [HANO] ... from the jurisdiction of the Civil Service Commission. The result of that action [4 Cir. 7]was to strip said employees of the civil service protections heretofore possessed by them.

Plaintiff, along with numerous other employees, filed a complaint with the federal court, challenging the removal of their civil service protection [the 2008 Suit]. The matter raised an issue of the utmost public concern. The public had an interest in knowing whether the secretary of HUD could remove from HANO employees rights and privileges enjoyed by most, if not all, public employees.

As a result of the complaint, HANO undertook retaliatory actions against nearly all, if not all, of the signatories to the complaint. Most, if not all, and particularly Plaintiff, were unjustly disciplined, demoted and/or terminated because of their participation in the complaint.

In retaliating against said employees, particularly Plaintiff, HANO violated their right to speak out on issues of public concern.

Thus, Ms. McGowan's asserted protected speech is the 2008 Suit, which she and several other HANO employees filed challenging the legality of the 2008 HUD Determination and asserting discrimination by HANO.

To provide a framework for analyzing Ms. McGowan's claim, it is necessary to summarize the allegations of the complaint underlying the 2008 Suit and the decisions of the federal district and appellate courts dismissing that suit. The underlying complaint can be summarized as follows:

• Effective April 17, 2008, all HANO employees were notified that they were no longer classified or unclassified civil service employees but rather “at will” employees pursuant to HANO's secretary's April 15, 2008 determination.

• HUD “has permitted [HANO]...