Deretich v. Office of Administrative Hearings, State of Minn.

Decision Date13 August 1986
Docket NumberNo. 85-5265,85-5265
Citation798 F.2d 1147
PartiesGeorge DERETICH, Appellant, v. OFFICE OF ADMINISTRATIVE HEARINGS, STATE OF MINNESOTA; Department of Employee Relations, State of Minnesota; Duane Harves, individually and as Chief Hearing Examiner, Office of Administrative Hearings, State of Minnesota; and Myron Greenberg, individually and in his capacity as Supervisor, Office of Administrative Hearings, State of Minnesota, Appellees.
CourtU.S. Court of Appeals — Eighth Circuit

Mary Sarazin Timmons, St. Paul, Minn., for appellant.

Kathleen M. Mahoney, Asst. Atty. Gen., St. Paul, Minn., for appellees.

Before JOHN R. GIBSON, FAGG, and MAGILL, Circuit Judges.

MAGILL, Circuit Judge.

George Deretich appeals from a judgment on an adverse jury verdict and other rulings of the district court 1 dismissing his civil rights and first amendment claims against his former employer, the Minnesota Office of Administrative Hearings (OAH). Deretich contends the district court erred in (1) denying his motion for judgment notwithstanding the verdict or, for a new trial, on his procedural due process claim; (2) dismissing his first amendment claim; (3) granting OAH's motion for summary judgment on his section 1985 claims; (4) holding that res judicata barred some of his due process claims; and (5) dismissing some of the defendants from this action. For the reasons discussed below, we affirm.

I. BACKGROUND.

OAH conducts administrative hearings in rulemaking proceedings for state government agencies. Deretich was employed as a hearing examiner in OAH's public utilities unit, hearing primarily public utility rate and transportation cases.

From April 1980 and until his termination on September 10, 1982, Deretich and his supervisors were involved in a series of internal disputes relating to the following issues: (1) changes in his promotion evaluation; (2) his public rejection of agency policy on court reporting; (3) his participation in a public utilities commission seminar in contravention of OAH rules concerning conflicts of interest; (4) his failure to follow policy on completing work tickets; (5) his claims for compensatory time owed by OAH; (6) his refusal to revise contested case reports; and (7) his unauthorized public disclosures with regard to such reports. These disputes resulted in official reprimands, two ten-day suspensions and an order requiring Deretich to obtain supervisory approval of all documents issued in his official capacity as a hearing examiner.

Deretich contested the suspensions by filing a formal grievance. The chief hearing officer of OAH denied the grievance, and Deretich appealed to the Department of Employee Relations, of which defendant, Barbara Sundquist, was commissioner.

A five-day grievance appeal hearing ensued before independent hearing examiner Joseph L. Daly, professor at the Hamline University School of Law, in May 1982. The issues grieved were (1) whether the suspension for refusal to follow agency policy on the format of reports was valid; (2) whether the suspension for making public disclosures on contested case reports was valid; (3) whether Deretich was entitled to claimed compensatory time; and (4) whether OAH's requiring official approval of all of Deretich's writings constituted an unlawful interference with Deretich's first amendment rights and statutory duties as a hearing examiner. After post-hearing briefs, in September 1982, Daly issued a fifty-six page advisory opinion limiting Deretich's compensatory time to that provided by OAH written policy and denying all other claims. Sundquist adopted this opinion by order of September 9, 1982.

Deretich subsequently petitioned for review in state district court, asserting his first amendment claim, plus due process and equal protection claims under the fifth and fourteenth amendments. The Honorable J. Jerome Plunkett dismissed the case for lack of subject matter jurisdiction on January 4, 1983, for reasons not pertinent here, but also concluded as a matter of law that the procedures afforded to Deretich met "the constitutional due process requirements." The Minnesota Supreme Court summarily affirmed.

In the meantime, Deretich had left OAH for a temporary personal leave of absence, beginning January 2, 1982, to run for political office. 2 But rather than run for political office, he started a law practice on January 4, 1982. Subsequently, Deretich's law partner represented clients before OAH, and Deretich personally made an appearance before a fellow OAH hearing examiner as counsel for a party in a Northwestern Bell Telephone rate case, and was personally present during many of the hearings in another rate case in which his firm had entered an appearance for a party.

After the period for filing for political office had passed, without Deretich declaring his candidacy, OAH cancelled his leave. OAH also requested he sever connections with the law firm because of conflicts of interest, and ordered him to return to work. Deretich ignored these requests, returning to state court a second time, seeking a temporary restraining order and temporary injunction against OAH's cancellation of his leave. On September 2, 1982, while the state action was still pending, OAH gave him eight days' written notice of his discharge from the agency, setting forth in great detail the specific reasons for termination, inviting him to refute the charges orally or in writing. 3 OAH also offered a pretermination hearing, which Deretich did not pursue. The state court subsequently denied his claims.

In August 1983, he filed this federal action under 42 U.S.C. Secs. 1983 and 1985. The district court dismissed most of the claims and some of the parties, by summary judgment and directed verdict. After a three-week trial, the district court sent the procedural due process claim of leave cancellation and employment termination to the jury. The jury returned a verdict in favor of the remaining defendants. The district court then denied Deretich's motion for judgment notwithstanding the verdict or a new trial. This appeal followed.

II. DISCUSSION.
A. Jury Verdict.

Deretich contends the district court erred in denying his motions for partial summary judgment and judgment notwithstanding the verdict or a new trial on the issue of whether OAH violated his rights of procedural due process. Deretich argues that he had a constitutionally protected property right in continued employment and OAH did not provide a pretermination hearing as required by Cleveland Board of Education v. Loudermill, 470 U.S. 532, 105 S.Ct. 1487, 84 L.Ed.2d 494 (1985).

Public employees may have a property right in continued employment. Loudermill, 105 S.Ct. at 1491-92; Riggins v. Board of Regents of Univ. of Nebraska, 790 F.2d 707, 710 (8th Cir.1986). If an employee has a property right in continued employment, he may not be discharged without due process. Loudermill, 105 S.Ct. at 1493.

Because OAH concedes that Deretich had a constitutionally protected property interest in his job, the first issue is whether OAH provided Deretich with due process in terminating his employment. The due process clause requires that, prior to termination, a public employee be given oral or written notice of charges, an explanation of the employer's evidence, and an opportunity to respond. Loudermill, 105 S.Ct. at 1495; Riggins, 790 F.2d at 710. Second, a procedural due process claim under section 1983 must show that the constitutional infringement resulted from "more than lack of due care by a state official." Daniels v. Williams, --- U.S. ----, 106 S.Ct. 662, 665, 88 L.Ed.2d 662 (1986). If OAH's procedures were deficient, Deretich must show that the deficiency resulted from more than mere negligence. Minnesota law required that OAH give Deretich written notice of discharge with "a statement of the nature of the disciplinary action, the specific reasons for the action, the effective date of the action and a statement informing [him] of [his] right to reply within five working days * * *." Minn.Stat.Ann. Sec. 43A.33(3)(a) (West 1986).

The district court before trial concluded that the parties' recitations of the facts concerning Deretich's procedural due process claim presented genuine issues of fact for the jury and refused to grant partial summary judgment. Accordingly, the court sent the issue of whether OAH's procedures met the standard of fundamental fairness to the jury. The court instructed the jury that OAH could succeed by proving it proceeded in "good faith." 4 The jury returned a verdict in favor of OAH, and the court denied his motions for judgment notwithstanding the verdict or a new trial.

We hold that the district court did not err in denying Deretich's motion for partial summary judgment and submitting the issue to the jury. Summary judgment may be granted only when there is no genuine issue of material fact and the moving party has proved he is entitled to judgment as a matter of law. See Kresse v. Home Insurance Co., 765 F.2d 753, 754 (8th Cir.1985); Fed.R.Civ.P. 56(c). OAH's procedures were not per se violative of the constitutional requirements of notice and a meaningful opportunity to respond. Loudermill, supra. Pursuant to state law, OAH gave Deretich written notice of his discharge, listing its reasons for the dismissal. Deretich ignored an invitation to respond orally or in writing before the effective date of discharge, and the opportunity of a pretermination hearing.

We hold further that the district court did not err in denying Deretich's motion for judgment notwithstanding the verdict or a new trial. Having reviewed the entire trial transcript, we conclude that reasonable persons could differ as to the conclusions to be drawn. See Cleverly v. Western Electric Co., 594 F.2d 638, 641 (8th Cir.1979). There were issues of fact as to the good faith immunity of OAH and the level of procedural protection afforded Deretich. The district...

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