777 F.2d 825 (2nd Cir. 1985), 850, Dwyer v. Regan

Docket Nº:850, Docket 84-7956.
Citation:777 F.2d 825
Party Name:Francis J. DWYER, Plaintiff-Appellant, v. Edward V. REGAN, Individually and as Trustee and Administrative Head of the New York State Employees Retirement System, Defendant-Appellee.
Case Date:November 21, 1985
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit

Page 825

777 F.2d 825 (2nd Cir. 1985)

Francis J. DWYER, Plaintiff-Appellant,


Edward V. REGAN, Individually and as Trustee and

Administrative Head of the New York State

Employees Retirement System, Defendant-Appellee.

No. 850, Docket 84-7956.

United States Court of Appeals, Second Circuit

November 21, 1985

Argued March 7, 1985.

Page 826

[Copyrighted Material Omitted]

Page 827

Eileen M. Kelley, Albany, N.Y. (William F. Sheehan, Hinman, Straub, Pigors & Manning, P.C., Albany, N.Y., on brief), for plaintiff-appellant.

William J. Kogan, Asst. Sol. Gen., Albany, N.Y. (Robert Abrams, Atty. Gen., State of N.Y., Robert Hermann, Sol. Gen., Peter H. Schiff, Deputy Sol. Gen., Albany, N.Y., on brief), for defendant-appellee.

Before TIMBERS, NEWMAN and KEARSE, Circuit Judges.

KEARSE, Circuit Judge.

Plaintiff Francis J. Dwyer appeals from a final judgment of the United States District Court for the Northern District of New York, Roger J. Miner, Judge, dismissing his complaint, brought under 42 U.S.C. Sec. 1983 (1982) against defendant Edward V. Regan, individually and as head of the New York State Employees Retirement System (the "Retirement System" or the "System"), for damages and equitable relief for the termination of Dwyer's employment without a prior hearing. The court dismissed Dwyer's complaint for failure to state a claim upon which relief can be granted "pursuant to Hudson v Palmer, [--- U.S. ----, 104 S.Ct. 3194, 3202-04, 82 L.Ed.2d 393 (1984) ]; Parratt v Taylor, 451 U.S. 527, [101 S.Ct. 1908, 68 L.Ed.2d 420] (1981) and Giglio v. Dunn," 732 F.2d 1133 (2d Cir.), cert. denied, --- U.S. ----, 105 S.Ct. 328, 83 L.Ed.2d 265 (1984). On appeal, Dwyer contends that his complaint adequately stated a claim for violation of his due process right to a pretermination hearing. Although we conclude that the complaint is inadequate under the standard enunciated herein, and that certain of the relief requested by Dwyer would in any event be barred by the Eleventh Amendment to the Constitution, we remand the matter to the district court to give Dwyer the opportunity to allege facts sufficient to state a claim upon which relief may properly be granted.


For purposes of this appeal, the allegations of the complaint must be taken as true. They paint the following picture.

Dwyer was employed by the Retirement System from 1965 until 1983. In 1970, he was provisionally appointed to the position of Chief Mortgage Investment Examiner for the System, a position in the competitive class of the New York State Civil Service. Some two years later, his appointment to that position became permanent. Dwyer's responsibilities as Chief Mortgage Investment Examiner consisted primarily of acting as legal advisor to the System on all mortgage loans made by it, preparing and reviewing all documents relating to such loans, and monitoring the compliance by the System and its mortgagors with applicable statutes and regulations. The essential functions and duties of the Chief Mortgage Investment Examiner were centered in New York City.

Dwyer performed his duties capably. Nonetheless, Regan, who was Comptroller of the State of New York (the "State") and sole trustee and administrative head of the System, together with some of his agents and subordinates, developed a personal dislike for Dwyer and formulated a plan to remove him from his position without showing that he had performed his work incompetently or engaged in any misconduct and without affording him a hearing. First, in April 1983, in an effort to induce Dwyer to resign or retire, Regan, knowing that the duties of Dwyer's position could not be discharged effectively from Albany, New York, approved the reassignment of Dwyer's position from New York City to Albany. Regan also knew that Dwyer, with his wife and six children, lived in

Page 828

Westchester County, near New York City, and denied Dwyer travel reimbursement when his position was reassigned to Albany. Despite the inefficiency and personal expense, Dwyer refused to resign.

When it became apparent that the reassignment would not induce Dwyer's resignation, Regan purported to abolish Dwyer's position, claiming to base that decision on a fiscal crisis that necessitated the consolidation of mortgage service functions. Accordingly, in September 1983 Dwyer was advised that his position would be abolished; and on October 31, 1983, his employment with the State was terminated. The complaint alleged that no such fiscal crisis existed and no consolidation occurred; that Regan's invocation of these factors was another "subterfuge" designed to get rid of Dwyer; and that Dwyer's position was not in fact eliminated but was "reconstitute[d]" in the hands of another, less senior, employee of the Retirement System. Dwyer contended that this scheme deprived him of his property right in his position without due process of law, and he demanded reinstatement, backpay, compensatory and punitive damages, and reasonable attorney's fees.

Without filing an answer, Regan moved to dismiss the complaint pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim upon which relief can be granted, contending, inter alia, that (1) Dwyer had no constitutionally protected property interest in not having his position reassigned to Albany or abolished, (2) even if Dwyer did have such a property interest, the postabolition procedures available to Dwyer under N.Y.Civ.Prac.Law art. 78 (McKinney 1981) ("Article 78") satisfied the constitutional requirements of due process, and (3) Dwyer's complaint sought recovery from the State and was therefore barred by the Eleventh Amendment.

The district court granted Regan's motion without opinion, stating only that the complaint was dismissed "pursuant to Hudson v Palmer, --- U.S. ----, [----, 104 S.Ct. 3194, 3203, 82 L.Ed.2d 393](1984); Parratt v. Taylor, 451 U.S. 527 [101 S.Ct. 1908, 68 L.Ed.2d 420] (1981) and Giglio v Dunn, 732 F.2d 1133 (2d Cir, 1984)." This appeal followed.


On appeal, Dwyer contends that the allegations of his complaint stated a claim under 42 U.S.C. Sec. 1983. He contends that (1) under New York law, he had a right not to be removed from his position unless he was guilty of incompetency or misconduct; (2) this right constituted a "property" interest within the meaning of the Due Process Clause of the Fourteenth Amendment; (3) the bad-faith reassignment and sham abolition of his position by Regan in order to remove Dwyer from that position and give it to another employee of the System constituted a deprivation of that property right; and (4) the failure to accord Dwyer an opportunity for a hearing prior to that deprivation violated his right to due process.

In order to state a claim under Sec. 1983, a plaintiff must allege (1) that the conduct complained of was committed by a person acting under color of state law, and (2) that such conduct deprived the plaintiff of a right, privilege, or immunity secured by the Constitution or laws of the United States. Parratt v. Taylor, 451 U.S. at 535, 101 S.Ct. at 1912; Gomez v. Toledo, 446 U.S. 635, 640, 100 S.Ct. 1920, 1923, 64 L.Ed.2d 572 (1980); Adickes v. S.H. Kress & Co., 398 U.S. 144, 150, 90 S.Ct. 1598, 1604, 26 L.Ed.2d 142 (1970). In the present case, Regan concedes that the complaint adequately alleged that the actions taken by Regan, the State Comptroller and head of the Retirement System, were taken under color of state law. Therefore, although Regan does raise an Eleventh Amendment argument, which we address in Part II.B. below, the only question raised as to the adequacy of the complaint to state a claim under Sec. 1983 is whether Dwyer had a due process right to a hearing prior to the termination of his employment.

In reviewing the dismissal of a complaint pursuant to Rule 12(b)(6) we, like the district court in deciding the motion, see Dahlberg

Page 829

v. Becker, 748 F.2d 85, 88 (2d Cir.1984), cert. denied, --- U.S. ----, 105 S.Ct. 1845, 85 L.Ed.2d 144 (1985), must accept as true the material facts alleged in the complaint, see Hospital Building Co. v. Trustees of Rex Hospital, 425 U.S. 738, 740, 96 S.Ct. 1848, 1850, 48 L.Ed.2d 338 (1976); Giglio v. Dunn, 732 F.2d at 1134; Fine v. City of New York, 529 F.2d 70, 75 (2d Cir.1975). We may uphold the dismissal only if the complaint leaves no doubt that the plaintiff " 'can prove no set of facts in support of his claim which would entitle him to relief.' " Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974) (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957)). This principle is applied with particular strictness when the plaintiff contends that there has been a violation of his civil rights. See Owens v. Haas, 601 F.2d 1242, 1247 (2d Cir.), cert. denied, 444 U.S. 980, 100 S.Ct. 483, 62 L.Ed.2d 407 (1979); Turpin v. Mailet, 579 F.2d 152, 167 (2d Cir.) (en banc), vacated and remanded on other grounds, 439 U.S. 974, 99 S.Ct. 554, 58 L.Ed.2d 645 (1978); Escalera v. New York City Housing Authority, 425 F.2d 853, 857 (2d Cir.), cert. denied, 400 U.S. 853, 91 S.Ct. 54, 27 L.Ed.2d 91 (1970). While we are not persuaded that Dwyer's present complaint sufficiently alleges all of the facts prerequisite to success on his claim of denial of a pretermination hearing, and while the Eleventh Amendment plainly would bar the granting of Dwyer's request for backpay, we conclude (a) that it is not clear that Dwyer could prove no set of facts in support of his claim, and (b) that if he were able to allege and prove the appropriate facts on remand, there would be no Eleventh Amendment impediment to his claims for reinstatement, damages, or attorney's fees.

  1. The Alleged Constitutional Deprivation

    The issue of whether the complaint...

To continue reading