Head v. Chicago School Reform BD Trustees

• Decision Date: 25 August 2000
• Docket Number: No. 99-3408,99-3408
• Parties: (7th Cir. 2000) Lawrence Head, Plaintiff-Appellant, v. Chicago School Reform Board of Trustees, Defendant-Appellee
• Court: U.S. Court of Appeals — Seventh Circuit

Page 794

225 F.3d 794 (7th Cir. 2000)

Lawrence Head, Plaintiff-Appellant, v. Chicago School Reform Board of Trustees, Defendant-Appellee.

No. 99-3408

In the United States Court of Appeals For the Seventh Circuit

Argued March 30, 2000

Decided August 25, 2000

Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 98 C 3943--David H. Coar, Judge. [Copyrighted Material Omitted]

[Copyrighted Material Omitted]

[Copyrighted Material Omitted] Before Bauer, Diane P. Wood, and Williams, Circuit Judges.

Williams, Circuit Judge.

Before the start of the 1994-95 school year Lawrence Head accepted a four-year contract to serve as the principal of Chicago's Nathaniel Pope Elementary School. After the 1996-97 school year, however, the Chicago School Reform Board of Trustees removed Head from his position and assigned him to administrative duties in the Department of Schools and Regions. Believing that the School Reform Board of Trustees had violated his due process rights and had breached its contract with him, Head filed suit against the School Reform Board of Trustees. The district court rejected Head's claims and Head now appeals. For the reasons stated below, we affirm in part and reverse in part.

I

In March of 1994, the Chicago Board of Education,¹ acting through the Local School Council, hired Head as the principal for Nathaniel Pope Elementary School ("Pope Elementary") and gave him a four-year contract ending June 30, 1998. By its own terms, the contract could be terminated only on certain limited grounds.² Similarly under the Illinois School Code, Head could be discharged during the term of his contract only for cause following an extensive and detailed notice and hearing process. 105 Ill. Comp. Stat. 5/34-85.

Beginning in 1995, the Board, aided by newly enacted state laws granting it greater powers, 1995 Ill. Laws 89-15, sec. 5, began to step up its efforts to remedy deficient performance in Chicago's public schools. Pursuant to these efforts, in October 1996, Pope Elementary was identified as a poorly performing school and was placed on probation. A school on probation is subject to greater Board oversight and must take certain steps to improve performance. 105 Ill. Comp. Stat. 5/34-8.3. In particular, Head, as Pope Elementary's principal, had primary responsibility for implementing a Corrective Action Plan to raise student test scores.

During the 1996-97 school year, the Board came to the conclusion that Head was not fulfilling his responsibility in this regard. Therefore, in early June of 1997, Hazel Stewart, the Education Officer for the region encompassing Pope Elementary, advised Head that the Board would seek to remove him as Pope Elementary's principal at the end of that school year. A letter signed by Chicago Public Schools CEO Paul Vallas and dated July 2, notified Head that pursuant to 105 Ill. Comp. Stat. 5/34-8.3(d), which governs schools under probation, a principal removal hearing would be scheduled for Pope Elementary. Head received a second letter signed by Vallas, dated July 3, scheduling the removal hearing for July 14 and detailing the criteria the Board used in deciding to seek his removal.³ A separate letter also notified the school community of the principal removal hearing.

Margaret Fitzpatrick presided over the July 14 hearing. During the hearing, eight witnesses presented evidence supporting Head's removal while seven witnesses testified on Head's behalf. After the hearing, Head, through his attorney, submitted a brief arguing against his removal. About a week after the hearing, Fitzpatrick issued a written decision recommending that Head be removed as principal of Pope Elementary. That same week, a Chicago Public Schools official, Phillip Hansen, criticized Head's performance on a cable access program. Then, on July 28, the Board adopted Fitzpatrick's recommendation and removed Head as principal of Pope Elementary.

Following the Board's decision, Head was assigned to work in the Department of Schools and Regions, and from there, he obtained an assignment as a hearing officer. Head's employment with the Board ended in August of 1998, 60 days after the expiration of his contract. Throughout this period, Head continued to receive the same pay and benefits he had received as the principal of Pope Elementary, though Head claims that he lost a salary increase he would have received had he remained principal.

Eventually, Head filed suit against the Board based on the Board's actions in removing him as principal of Pope Elementary. He raised essentially four claims: (1) that, without due process, the Board had deprived him of a liberty interest in pursuing his occupation; (2) that, without due process, the Board had deprived him of a property interest in employment beyond the term of his contract; (3) that, without due process, the Board had deprived him of a property interest in employment through the end of his contract; and (4) that the Board had breached its contract with him. On a motion to dismiss for failure to state a claim under Fed. R. Civ. P. 12(b)(6), the district court rejected the first two of these claims, but allowed the last two claims to go forward.⁴ Later, however, on a motion for summary judgment, the district court rejected Head's remaining claims and entered judgment in the Board's favor. Head appeals the district court's decisions on all four of his claims.

II

Before we come to the merits of Head's appeal, we must address a jurisdictional issue raised by the Board. The Board argues that we lack appellate jurisdiction to consider Head's challenge to the district court's decision to dismiss, under Fed. R. Civ. P. 12(b)(6), two of his claims. The ⁵ Board claims that the district court dismissed the two claims without prejudice, and therefore, the dismissal does not qualify as an appealable "final decision" under 28 U.S.C. sec. 1291.

While it is true that the district court's ruling on the Board's motion to dismiss is not a final decision (not only because it was without prejudice, but also because it did not dispose of all of Head's claims, see LeBlang Motors, Ltd. v. Subaru of Am., Inc., 148 F.3d 680, 687 (7th Cir. 1998) (discussing finality of dismissals without prejudice); United States v. Ettrick Wood Prods., Inc., 916 F.2d 1211, 1216-17 (7th Cir. 1990) (discussing finality of decisions disposing of fewer than all claims against all parties)), non- final decisions become appealable after a final decision is entered. Badger Pharm., Inc. v. Colgate-Palmolive Co., 1 F.3d 621, 626 (7th Cir. 1993) (an appeal from a final decision brings up for review all previous orders entered in the case); Bastian v. Petren Resources Corp., 892 F.2d 680, 682-83 (7th Cir. 1990) (same). And, the district court's ruling on the Board's summary judgment motion is a final decision, as it resolved all outstanding claims and made clear that Head's suit was at an end. See Otis v. City of Chicago, 29 F.3d 1159, 1163-66 (7th Cir. 1994) (en banc). Moreover, the district court entered a formal Fed. R. Civ. P. 58 judgment, which removes any doubt as to whether any portion of Head's suit remained active. See Kolman v. Shalala, 39 F.3d 173, 177 (7th Cir. 1994). Accordingly, this court has jurisdiction to consider all of Head's claims on appeal.

III

A. Claims Resolved in Motion to Dismiss Decision

We consider first the two claims the district court dismissed under Rule 12(b)(6)--that, without due process, the Board deprived Head of a liberty interest in pursuing the occupation of his choice and that, without due process, the Board deprived Head of a property interest in employment beyond the term of his contract. We review such dismissals de novo, taking a plaintiff's factual allegations as true and drawing all reasonable inferences in his or her favor. Strasburger v. Board of Educ., Hardin County Community Unit Sch. Dist. No. 1, 143 F.3d 351, 359 (7th Cir. 1998). A claim should be dismissed under Rule 12(b)(6) only if "no relief could be granted 'under any set of facts that could be proved consistent with the allegations.'" Nance v. Vieregge, 147 F.3d 589, 590 (7th Cir. 1998) (quoting Hishon v. King & Spalding, 467 U.S. 69, 73 (1984)).

1. Liberty Interest Claim

In setting out the basis for his due process liberty interest claim in his complaint,⁶ Head alleged that the Board (or at least certain persons associated with the Board) deprived him of a liberty interest in pursuing the occupation of his choice by disseminating false allegations regarding his performance as Pope Elementary's principal.⁷ In ruling that Head's allegations failed to state a claim, the district court concluded that Head had not adequately alleged that the Board deprived him of a liberty interest in pursuing his occupation. We agree, although for a reason slightly different than that given by the district court.

A claim that a government employer has infringed an employee's liberty to pursue the occupation of his or her choice requires that (1) the employee be stigmatized by the employer's actions; (2) the stigmatizing information be publicly disclosed; and (3) the employee suffer a tangible loss of other employment opportunities as a result of the public disclosure. Strasburger, 143 F.3d at 356; Harris v. City of Auburn, 27 F.3d 1284, 1286 (7th Cir. 1994). However, simply labeling an employee as being incompetent or otherwise unable to meet an employer's expectations does not infringe the employee's liberty. Lashbrook v. Oerkfitz, 65 F.3d 1339, 1348-49 (7th Cir. 1995). The employee's good name, reputation, honor, or integrity must be called into question in such a way as to make it virtually impossible for the employee to find new employment in his chosen field. Olivieri v. Rodriguez, 122 F.3d 406, 408 (7th Cir. 1997); Lashbrook, 65 F.3d at 1348-49; Colaizzi v. Walker, 812 F.2d 304, 307 (7th Cir. 1987).

The district court based its dismissal of Head's due...