Larry v. Lawler

• Decision Date: 18 August 1978
• Docket Number: No. 76-1747,76-1747
• Citation: 605 F.2d 954
• Parties: Maurice M. LARRY, Plaintiff-Appellant, v. Ray E. LAWLER, Leland L. Walton, Jayne B. Spain, Lt. Andolsek, Robert E. Hampton, Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 954

605 F.2d 954

Maurice M. LARRY, Plaintiff-Appellant, v. Ray E. LAWLER, Leland L. Walton, Jayne B. Spain, Lt Andolsek, Robert E. Hampton, Defendants-Appellees.

No. 76-1747.

United States Court of Appeals Seventh Circuit.

Aug. 18, 1978. ^*

Amy Hilsman, Chicago, Ill., for plaintiff-appellant.

Thomas P. Sullivan, U.S. Atty., Martin B. Lowery, Asst. U.S. Atty., Chicago, Ill., for defendants-appellees.

Before SWYGERT and WOOD, Circuit Judges, and EAST, Senior District Judge. ^**

EAST, Senior District Judge.

Plaintiff-appellant Maurice M. Larry (Larry) appeals the district court's order entered on May 21, 1976 which granted defendants-appellees' motion for summary judgment.

Larry was rated ineligible for employment in the federal government by the Civil Service Commission. After an unsuccessful administrative appeal concluded on February 14, 1975, Larry filed this 5 U.S.C. § 702 (Administrative Procedure Act) suit naming the hearing officers and Civil Service Commissioners (Commission) as defendants, primarily alleging that the manner in which the Commission reached its ultimate decision constituted a violation of the Due Process Clause of the Fifth Amendment. We vacate the summary judgment and remand.

PROCEEDINGS BEFORE THE COMMISSION:

On January 24, 1974, Larry applied to the Commission requesting to be placed on the list of eligible applicants for employment consideration by the various agencies and departments within the federal government. As required by 5 C.F.R. § 731.301, the Commission conducted a standard background investigation to determine the applicant's "qualifications and suitability for employment in the competitive service."

Upon completion of the investigation, the Commission provided Larry with a summary entitled "Information Disclosed by Investigation into the Case of Maurice Larry" and invited comments and explanation. The information concerned Larry's employment history, his relationships with co-workers, his arrest record, and information relating to his use of alcohol. ¹

Shortly thereafter, Larry responded in writing to all the allegations, denying several of the findings and explaining the others. He also requested an oral hearing and access to the information upon which the Commission based its decision, including its sources. After considering Larry's response, the Commission rated the application ineligible because of "unsatisfactory employment record discharges from employment and (Larry's) habitual use of intoxicating beverages to excess." ² The effect of this finding is to bar Larry from obtaining employment in any capacity with the federal government for a period of up to three years. ³

Larry then appealed the decision to the United States Civil Service Commission Federal Employee Appeals Authority, again requesting an oral hearing and the additional information. Additionally, he reiterated his contentions concerning the investigative findings. A final administrative decision was rendered denying the appeal and concluding that Larry's conduct, performance and termination from past employment tended to "raise some question, however, indeterminate, relative to incompatibility" with suitable performance.

DISTRICT COURT PROCEEDINGS:

Larry's three count complaint in the district court alleged an unconstitutional denial of due process, arbitrary, capricious, and unauthorized action by the Commission, and findings unsupported by the evidence. The district court granted appellees' motion for summary judgment on all three counts.

DISCUSSION AND CONCLUSIONS:

Larry contends that as an applicant, he should have been allowed to examine all the evidence underlying the Commission's allegations against him and that he should have been granted an oral hearing in order to allow him to effectively rebut the adverse evidence. Further, he contends that the adverse eligibility ruling has stigmatized him and has barred him from all federal employment for up to three years. Larry argues that such action amounts to a denial of due process guaranteed by the Fifth Amendment.

In addressing a claim of an unconstitutional denial of procedural due process, we undertake a two step analysis. Initially, it must be determined whether Larry's interest rises to the level of a constitutionally protected "liberty" or "property" interest. If there is a recognizable property or liberty interest at stake, then we must weigh the competing interests of the individual and the Government in order to reach a resolution of what process is due.

In making a determination of whether the Fifth Amendment's due process requirements are to be applied, "we must look not to the 'weight' but to the Nature of the interest at stake." Board of Regents v. Roth, 408 U.S. 564, 571, 92 S.Ct. 2701, 2706, 33 L.Ed.2d 548 (1972). Roth, a non-tenured teacher at a state university, alleged his due process rights were violated when the school failed to provide him with a statement of reasons or a hearing when it declined to renew his one year contract. The Supreme Court held that there was no constitutional violation because nonrenewal deprived him of neither liberty nor property. In its discussion of the nature of liberty, the court stated:

"While this Court has not attempted to define with exactness the liberty . . . guaranteed . . . the term has received much consideration and some of the included things have been definitely stated. Without doubt, it denotes not merely freedom from bodily restraint but also the right of the individual to contract, to engage in any of the common occupations of life, to acquire useful knowledge, to marry, establish a home and bring up children, to worship God according to the dictates of his own conscience, and generally to enjoy those privileges long recognized . . . as essential to the orderly pursuit of happiness by free men." Meyer v. Nebraska, 262 U.S. 390, 399 (43 S.Ct. 625, 626, 67 L.Ed.2d 1042). In a Constitution for a free people, there can be no doubt that the meaning of "liberty" must be broad indeed. Id. at 572, 92 S.Ct. at 2706.

The court suggested a two-pronged liberty interest. Initially, liberty may be implicated if charges are leveled against an employee which "might seriously damage his standing and associations in his community," and the court gives as an example accusations of dishonesty or immorality. Id. at 573, 92 S.Ct. at 2707. The court continued that "(i)n such a case, due process would accord an opportunity to refute the charge before University officials." Id.

Secondly, the court explained that liberty may also be abridged if "the State, in declining to re-employ the respondent, imposed on him a Stigma or other disability that foreclosed his freedom to take advantage of other employment opportunities. The State, for example, did not invoke any regulations to bar the respondent from all other public employment in state universities. Had it done so, this, again, would be a different case. For '(t)o be deprived not only of present government employment but of future opportunity for it certainly is no small injury . . . .' " Id. at 573-74, 92 S.Ct. at 2707. (Emphasis added).

The nature of Larry's liberty interest is difficult to define with exactitude. He has been charged with drunkenness and abusive behavior, as a basis for the Commission's denial, and the effect of the negative eligibility finding is to bar him from all federal employment, a significant sector of the job market, for up to three years. The Commission points out that its findings will not be made public and are made available to the various agencies only on a need to know basis. However, the federal government is composed of many different agencies and departments, all of which could obtain the information under various circumstances. ⁴ In effect, Larry has been stigmatized throughout the entire federal government. He is deprived of the opportunity to work in any capacity for any branch of the government.

It must be remembered that Larry has not merely been denied a particular position within the government; he has been totally debarred from all federal employment for up to three years. As Justice Jackson stated in his concurrence in Anti-Fascist Committee v. McGrath, 341 U.S. 123, 185, 71 S.Ct. 624, 95 L.Ed. 817 (1951), a case in which the petitioner organizations were, without notice or hearing, declared to be disloyal: "To be deprived not only of present government employment but of future opportunity for it certainly is no small injury when government employment so dominates the field of opportunity."

The recent Supreme Court case of Paul v. Davis, 424 U.S. 693, 96 S.Ct. 1155, 47 L.Ed.2d 405 (1976), does not eliminate the need for an analysis of Larry's liberty interest. Davis held that a liberty interest is not implicated when the only injury suffered as the result of government action is a stigma or damage to reputation.

While we have in a number of our prior cases pointed out the frequently drastic effect of the "stigma" which may result from defamation by the government in a variety of contexts, this line of cases does not establish the proposition that reputation alone, apart from Some more tangible interests such as employment, is either "liberty" or "property" by itself sufficient to invoke the procedural protection of the Due Process Clause. At 701, 96 S.Ct. at 1161. (Emphasis added).

Unlike Davis, Larry has, in addition to the infliction of a stigma, suffered a tangible loss in being foreclosed from any consideration for government employment for a substantial time.

Roth cautions that not all foreclosures of opportunities establish a deprivation of liberty. 408 U.S. at 570, 92 S.Ct. 2701. The court stated:

(O)n the record before us, all that clearly appears is that the respondent was not rehired for one year at one university. It stretches the concept too far to suggest that a person is deprived of "liberty" when he simply is not rehired in one job but remains as free as before to...