Ogden v. Atterholt

• Decision Date: 18 May 2010
• Docket Number: No. 09-2953.,09-2953.
• Parties: Paul K. OGDEN, Plaintiff-Appellant,v.James ATTERHOLT, Carol J. Mihalik, and the Indiana Department of Insurance, Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

606 F.3d 355

Paul K. OGDEN, Plaintiff-Appellant,v.James ATTERHOLT, Carol J. Mihalik, and the Indiana Department of Insurance, Defendants-Appellees.

No. 09-2953.

United States Court of Appeals, Seventh Circuit.

Argued April 13, 2010.

Decided May 18, 2010.

Adam Lenkowsky (argued), Roberts & Bishop, Indianapolis, IN, for Plaintiff-Appellant.

David L. Steiner (argued), Office of the Attorney General, Indianapolis, IN, for Defendants-Appellees.

Before WILLIAMS, SYKES, and TINDER, Circuit Judges.

SYKES, Circuit Judge.

Oral argument has narrowed this appeal to a single issue: Did the Commissioner of the Indiana Department of Insurance and his Chief Deputy violate Paul Ogden's free-speech rights when they required him to resign as manager of the Department's Title Insurance Division? Ogden was forced out of his position after writing a memo to the Commissioner criticizing the performance of his Chief Deputy and asking that the Title Insurance Division be removed from her control. He then sued the Commissioner, the Chief Deputy, and the Department of Insurance claiming that his memo was protected speech and his forced resignation violated his rights under the First Amendment. The district court entered summary judgment for the defendants and Ogden appealed.

We affirm. Ogden's complaints about the Deputy Commissioner and his request for a departmental reorganization were made in the performance of his professional duties as manager of the Title Insurance Division. Because he was speaking as a governmental employee and not a citizen when he wrote the memo, under Garcetti v. Ceballos, 547 U.S. 410, 126 S.Ct. 1951, 164 L.Ed.2d 689 (2006), the protections of the First Amendment are not implicated.

I. Background

In November 2006 Paul Ogden was hired as the manager of the newly created Title Insurance Division in the Indiana Department of Insurance. The Title Insurance Division was nestled within the Department's Consumer Protection Unit, headed up by Chief Deputy Commissioner Carol Mihalik. James Atterholt was the Commissioner of Insurance and in that capacity was responsible for the entire Department of Insurance. After taking the reins of the Title Insurance Division, Ogden very quickly began to resent Mihalik's management style; he thought she was emotionally erratic, forgetful, and too easily distracted by trivial matters. He began working around Mihalik by reporting directly to Atterholt on at least some Division matters, a practice which Ogden claims Atterholt encouraged.

On September 14, 2007, Ogden informed Atterholt that he was planning to submit a formal request that the Title Insurance Division be removed from the Consumer Protection Unit; Ogden and Atterholt had apparently discussed this possibility previously. That same day Ogden met with representatives of the State Personnel Division to file a formal complaint against Mihalik. In particular, Ogden claimed that Mihalik (1) flouted Personnel Division regulations on hiring; (2) misused funds directed for the Title Insurance Division; and (3) fostered a hostile work environment. The Personnel Division informed Ogden that an investigation would be opened and that he should gather any relevant information.

Three days later Ogden wrote a lengthy memorandum to Atterholt, which Ogden described as a “formal request to have the Title Insurance Division removed from the Consumer Protection Unit.” In the memo Ogden outlined 35 reasons in support of his reorganization request. Virtually all of these reasons involved allegations that Mihalik was incompetent or corrupt. Ogden's memo repeats many of the allegations he made three days earlier to the Personnel Division, but, importantly, the memo never references that formal complaint or asks that Mihalik be disciplined in any way. One of Ogden's final bullet points in the memo states: “If we at the Title Division are required to continue under Ms. Mihalik's supervision, the short term impact will be a marked decline in morale and productivity of the Division. The long term impact will be that employees of the Division will leave and the Division may have to be disbanded.”

A few hours after Atterholt received Ogden's memo, he summoned Ogden to a meeting. Mihalik was present with Atterholt at this meeting, and Ogden was informed that he had two choices: he could either resign or be fired. Ogden was told that he had been “out of line,” but no other explanation for the resign-or-be-fired order was offered. Ogden was given no opportunity to defend himself against the charge that his memo had been “out of line.” He chose resignation over termination and signed a “voluntary” resignation letter so that he could keep his accrued vacation time and avoid being placed on Indiana's “do not hire” list.

Ogden then sued Atterholt, Mihalik, and the Department of Insurance in Indiana state court, raising a host of state claims (including “whistle-blowing,” unjust termination, and intentional infliction of emotional distress), as well as a claim under 42 U.S.C. § 1983 for violation of his First Amendment right to free speech. He also asserted a due-process claim, the precise nature of which has been the source of a fair amount of confusion during this litigation and requires further comment.

Ogden advanced his § 1983 claim in Count VII of his complaint, which alleged a free-speech violation but said nothing of due process. Ogden's due-process allegations were lodged exclusively in Count VIII of his complaint, but that count is not entirely clear as to whether the due-process claim sounds in state or federal law (or both). In relevant part, Count VIII states: “The due process provided to Ogden falls short of meeting even the reduced standard required for at will employees under Indiana law, the Governor's Executive Order, and the Indiana and Federal Constitutions.” But Count VIII makes no mention of § 1983.

The defendants removed the case to federal court, observing in their notice of removal that Ogden was bringing both a First Amendment claim and a federal due-process claim under § 1983. The magistrate judge assigned to handle this case apparently read Ogden's complaint in the same way during the course of the proceedings below.¹ So when the magistrate judge ruled on the defendants' motion for summary judgment, she addressed two questions: whether Atterholt and Mihalik had violated either Ogden's free-speech rights or his due-process rights under the Federal Constitution. The judge granted summary judgment for the defendants on both grounds and remanded the remaining state claims back to the Indiana court.

Ogden then filed this appeal. Based on the proceedings in the district court, his appeal initially appeared to encompass federal free-speech and due-process issues. But in his reply brief, and again at oral argument, Ogden told us that his due-process claim arose exclusively under Indiana law. Accordingly, the only issue for us is whether the magistrate judge properly granted summary judgment for the defendants on Ogden's First Amendment claim.

II. Discussion

We review a grant of summary judgment de novo, construing all facts in the light most favorable to Ogden and drawing all reasonable inferences in his favor. Reget v. City of La Crosse, 595 F.3d 691, 695 (7th Cir.2010). To establish a prima facie case that his First Amendment free-speech rights were violated, Ogden must first show that he engaged in constitutionally protected speech and that this speech was a motivating factor in his dismissal. Valentino v. Vill. of S. Chi. Heights, 575 F.3d 664, 670 (7th Cir.2009).

The Supreme Court's decision in Garcetti governs the analysis of whether Ogden's memo is constitutionally protected speech. The Supreme Court reiterated in Garcetti that public employers, like private employers, are permitted to exercise a significant degree of control over their employees' words and actions. 547 U.S. at 418-19, 126 S.Ct. 1951. Nonetheless, public employees remain citizens, and as such “[t]he First Amendment limits the ability of a public employer to leverage the employment relationship to restrict, incidentally or intentionally, the liberties employees enjoy in their capacities as private citizens.” Id. at 419, 126 S.Ct. 1951. Accordingly, “[s]o long as employees are speaking as citizens about matters of public concern, they must face only those speech restrictions that are necessary for their employers to operate efficiently and effectively.” Id. But the Court held that “when public employees make statements pursuant to their official duties, the employees are not speaking as citizens for First Amendment purposes, and the Constitution does not insulate their communications from employer discipline.” Id. at 421, 126 S.Ct. 1951. As the Court explained: “Underlying our cases has been the premise that while the First Amendment invests public employees with certain rights, it does not empower them to constitutionalize the employee grievance.” Id. at 420, 126 S.Ct. 1951 (quotation marks omitted).

Ogden wrote his memo to Atterholt in his capacity as the manager of the Title Insurance Division and pursuant to his official duties in that position-not as a private citizen. The stated purpose of the memo was to serve as a “formal request [to the Commissioner] to have the Title Insurance Division removed from the Consumer Protection Unit and to operate as a direct report or under a different Chief Deputy.” In other words, Ogden was...