Boyanowski v. Capital Area Intermediate Unit

• Decision Date: 23 September 1999
• Parties: (3rd Cir. 2000) DONALD BOYANOWSKI, INDIVIDUALLY; DONALD BOYANOWSKI, TDBA, BOYO TRANSPORTATION SERVICES INC.; DOROTHY BOYANOWSKI; BOYO TRANSPORTATION SERVICES INC.; MICHAEL LABALOKIE v. CAPITAL AREA INTERMEDIATE UNIT; JOHN E. NAGLE; ED FRYE; <A HREF="#fr1-*" name="fn1-*">* ROGER MORRISON, INDIVIDUALLY; MARK BAUER; <A HREF="#fr1-*" name="fn1-*">* WEST PERRY SCHOOL DISTRICT CAPITAL AREA INTERMEDIATE UNIT; JOHN E. NAGEL; ED FRYE, APPELLANTS IN 98-7324 DONALD BOYANOWSKI; MICHAEL LABALOKIE, APPELLANTS IN 98-7349 NOS. 98-7324 and 98-7349 Argued:
• Court: U.S. Court of Appeals — Third Circuit

Page 396

215 F.3d 396 (3rd Cir. 2000)

DONALD BOYANOWSKI, INDIVIDUALLY; DONALD BOYANOWSKI, TDBA, BOYO TRANSPORTATION SERVICES INC.; DOROTHY BOYANOWSKI; BOYO TRANSPORTATION SERVICES INC.; MICHAEL LABALOKIE v. CAPITAL AREA INTERMEDIATE UNIT; JOHN E. NAGLE; ED FRYE; ^*ROGER MORRISON, INDIVIDUALLY; MARK BAUER; ^*WEST PERRY SCHOOL DISTRICT CAPITAL AREA INTERMEDIATE UNIT; JOHN E. NAGEL; ED FRYE, APPELLANTS IN 98-7324

DONALD BOYANOWSKI; MICHAEL LABALOKIE, APPELLANTS IN 98-7349

NOS. 98-7324 and 98-7349

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

Argued: September 23, 1999

Filed: June 14, 2000

On Appeal From the United States District Court For the Middle District of Pennsylvania (D.C. Civ. No. 94-cv-01252) District Judge: Honorable Sylvia H. Rambo

Stuart L. Knade, Esquire (argued) Pennsylvania School Boards Association 774 Limekiln Road New Cumberland, PA 17070-2398 Counsel for Capital Area Intermediate Unit John E. Nagle and Edward T. Frye Donald A. Bailey, Esquire (argued) Suite 209 3540 North Progress Avenue Harrisburg, PA 17110 Counsel for Donald Boyanowski; Dorothy Boyanowski; Boyo Transportation Services, Inc.; Michael Labalokie; Donald Boyanowski t/d/b/a/ Boyo Transportation Services, Inc.

Samuel C. Stretton, Esquire 301 South High St. P.O. Box 3231 West Chester, PA 19381 Counsel for Michael Labalokie and Donald Boyanowski

Before: Becker, Chief Judge, and Garth, Circuit Judge and Pollak, District Judge.^**

OPINION OF THE COURT

Becker, Chief Judge.

These appeals arise from a judgment entered in the District Court on separate jury verdicts in favor of a transportation contractor and his wife in their respective civil rights and civil conspiracy suits against a local government entity and its officials. Donald Boyanowski alleged that his efforts to furnish transportation services to school districts failed because of conduct by local officials that violated his substantive due process rights. Dorothy Boyanowski claimed to have been the victim of a civil conspiracy by two local officials that prevented her from receiving contracts to work as a bus driver. The appeal of the verdict in Donald Boyanowski's favor requires consideration of the relation, and separation, between federal constitutional and state tort actions. The appeal of the verdict in Dorothy Boyanowski's favor presents the question whether a plaintiff 's verdict for (state law) civil conspiracy can survive when the jury has found for the defendant on the underlying tort.

The first verdict, in favor of Donald Boyanowski and against his former employer, the Capital Area Intermediate Unit ("CAIU"), was entered on his claim that the CAIU's conduct violated his substantive due process rights. He also won a verdict against John Nagle, who had been executive director of the CAIU, but the District Court set it aside on qualified immunity grounds. Mr. Boyanowski's claims are essentially state tort defamation claims that do not implicate a federal constitutional interest. Constitutional claims of this sort have been implicitly rejected by the Supreme Court, see Siegert v. Gilley, 500 U.S. 226 (1991), and find no basis in our jurisprudence. We will therefore set aside the jury verdict in Mr. Boyanowski's favor. In light of our conclusion that he has not been deprived of constitutionally protected rights, there is no need to consider his cross-appeal of the District Court's decision to grant Nagle qualified immunity.

The second verdict, in favor of Dorothy Boyanowski against two CAIU officials, is for civil conspiracy. She claimed that officers of the CAIU conspired to interfere with her contract rights as part of their campaign against her husband. The jury found in her favor on her civil conspiracy complaint while rejecting her claim for tortious interference with contract. In light of the jury's finding that the underlying tort did not occur, we conclude that the civil conspiracy claim can not survive. See GMH Assoc., Inc. v. Prudential Realty Group, CB, 752 A.2d 889, (Pa. Super. Ct. March 1, 2000); Pelagatti v. Cohen, 536 A.2d 1337 (Pa. Super. Ct. 1987). We will therefore set aside the verdict on civil conspiracy as well, and remand with directions to enter judgment for the defendants on all counts.

I.

The CAIU is a governmental entity operating under Pennsylvania's public school laws. Intermediate units ("IUs") are part of the state's public school system and operate service programs that are open to the local public school districts assigned to each intermediate unit. See Pa. Stat. Ann. tit. 24 S 9-951 et seq. The board of directors of the IU is elected from the boards of directors of the component school districts. See id. S 9-960. The CAIU is one of twenty-nine IUs in the state. See id. S 9-952. The CAIU provides transportation for disabled children to and from classes and programs throughout the unit's region. It does so through a combination of employees and independent contractors. Prior to his retirement in July 1993, defendant John Nagle, as is noted above, was Executive Director of the CAIU. Defendant Edward Frye was the Assistant Executive Director and succeeded Nagle as Executive Director.

Until his retirement in March 1993, Donald Boyanowski was the CAIU transportation supervisor. After retiring, he established Boyo Transportation Services, Inc. ("Boyo"), which sought to contract for special transportation services with the member school districts of the CAIU. This entailed convincing them to no longer acquire such services through the CAIU. Mr. Boyanowski was therefore effectively competing with his former employer. Having been unsuccessful in persuading any member districts to accept his contract proposals, he brought suit under 42 U.S.C. S 1983, contending that his lack of success was the product of a violation of his substantive due process rights. At trial, he produced evidence that Nagle unfairly blamed him for rising costs of the CAIU program that occurred while he was a supervisor, and had referred to Mr. Boyanowski as a "crook" in a meeting of the CAIU superintendents council. Mr. Boyanowski alleged these actions were part of a concerted effort to keep him from obtaining any contracts.

The jury found that the CAIU's and Nagle's conduct violated Mr. Boyanowski's substantive due process rights, and awarded compensatory damages in the amount of $50,000 against the CAIU and $100,000 against Nagle. The jury also awarded $100,000 in punitive damages against Nagle. On post-trial motions, the District Court ruled that Nagle was entitled to qualified immunity on the substantive due process claim, and it set aside the verdict and damages against him. The CAIU appeals the substantive due process judgment against it, and Mr. Boyanowski cross appeals the grant of qualified immunity to Nagle.

The jury also considered several claims brought by Dorothy Boyanowski. She had been employed as an independent contractor bus driver for the CAIU. After her husband established Boyo, Ms. Boyanowski's contract was not renewed. She contended that Frye and Nagle engaged in conduct that amounted to tortious interference with contract against her as well as a civil conspiracy. She produced evidence at trial not only that her contract was not renewed, but also that Frye had made statements that were relayed to one of CAIU's busing contractors that hiring her would not be a "good idea," and that this communication occurred while Nagle was still in charge. Ms. Boyanowski also produced evidence that Nagle had sent her a letter informing her that her contract would not be renewed. The jury found for the defendants on the tortious interference with contract claim, but ruled in Ms. Boyanowski's favor as to the civil conspiracy, awarding her $50,000 against Nagle and $100,000 against Frye. The defendants also appeal this judgment.

The District Court had jurisdiction over Donald Boyanowski's civil rights claim under 28 U.S.C. SS 1331, 1343. It had supplemental jurisdiction over Dorothy Boyanowski's state law claims pursuant to 28 U.S.C. S 1367. Our jurisdiction over the District Court's final order is based on 28 U.S.C. S 1291. Our review of all legal questions is plenary.

II.

The core of due process is the protection against arbitrary governmental action and has procedural and substantive components. See County of Sacramento v. Lewis, 523 U.S. 833, 845-46 (1998). The substantive component of the Due Process Clause limits what government may do regardless of the fairness of procedures that it employs, and covers government conduct in both legislative and executive capacities. See id. at 846. The CAIU's appeal requires us to address executive conduct alleged to have infringed upon Donald Boyanowski's rights as protected by the Due Process Clause of the Fourteenth Amendment.

Unfortunately for Mr. Boyanowski, his substantive due process claim is properly read as a state law defamation claim. This is even made clear by his own brief, which indicates that his S 1983 claim is based on defamation and exists solely to circumvent Pennsylvania sovereign immunity against state tort claims. As the Boyanowskis' brief recites:

According to appellants, if a government entity is interested in doing business, and in the process uses its political power and muscle to systematically destroy the business opportunities of a competing private citizen through slur, innuendo, and outright false accusations, then the misconduct is simply not actionable. In Pennsylvania sovereign immunity protects government from tortious interference with contracts suits. Appellants know there is no adequate recourse under state defamation law also because of sovereign immunity statutes.

Appellee's Br. at 8 (emphasis added). Of course the lack of availability of a state law remedy will not serve to elevate an ordinary tort to a constitutional violation. The degree to which Pennsylvania wishes to waive sovereign immunity claims for state causes of action is the quintessence of a state...