Goldsmith v. Mayor & City Council of Baltimore

• Decision Date: 19 January 1988
• Docket Number: No. 87-1084.,87-1084.
• Citation: 845 F.2d 61
• Parties: Ronny J. GOLDSMITH, Plaintiff-Appellant, v. MAYOR & CITY COUNCIL OF BALTIMORE; Wilbur E. Cunningham, Fred Morris Lauer, Jr.; Harry Loleas, Defendants-Appellees.
• Court: U.S. Court of Appeals — Fourth Circuit

845 F.2d 61

Ronny J. GOLDSMITH, Plaintiff-Appellant, v. MAYOR & CITY COUNCIL OF BALTIMORE; Wilbur E. Cunningham, Fred Morris Lauer, Jr.; Harry Loleas, Defendants-Appellees.

No. 87-1084.

United States Court of Appeals, Fourth Circuit.

Argued November 5, 1987.

Decided January 19, 1988.

Howard J. Schulman, Baltimore, Md., for plaintiff-appellant.

J. Shawn Alcarese, Sp. Sol., City of Baltimore Dept. of Law (Benjamin L. Brown, City Sol., Baltimore, Md., on brief), for defendants-appellees.

Before HALL and ERVIN, Circuit Judges, and KAUFMAN, Senior United States District Judge for the District of Maryland, sitting by designation.

ERVIN, Circuit Judge:

Ronny J. Goldsmith alleged in her second amended complaint that Baltimore City Ordinance Number 625, effective March 12, 1986, which abolished the Baltimore City Council Office of Financial Review, was enacted for the purpose of removing her as Director of that agency without due process in violation of 42 U.S.C. § 1983. Ms. Goldsmith argues that the ordinance was enacted because she provided information to the media and others concerning improprieties and irregularities in municipal fiscal matters. The trial court entered summary judgment in favor of the defendants on due process, constructive discharge, and tortious interference with contract¹ claims and dismissed without prejudice the remaining counts of the complaint. Because we believe that the district court was without subject matter jurisdiction, we reverse the summary judgment decision and remand the case for dismissal of Goldsmith's claims without prejudice.

I.

The budget of the City of Baltimore is, by charter, prepared each year by the executive branch of the government and is then submitted to the City Council for approval. Historically, the City Council found itself under a severe handicap in the study of the executive budget and unable to evaluate the proposed expenditures and projected revenues. On July 6, 1960 the Sherbow Commission addressed these concerns and issued a report which recommended that a fiscal research bureau be created so that City Council members could enlist the aid of experts in evaluating the budget they must ratify.

The report recommended that the Director of such a bureau be responsible solely to the City Council. The Directorship was designed to be essentially an apolitical position. As a result, the director was to be appointed by an independent board from a list of names certified to that board by the Civil Service Commission. The Director would serve during good behavior, subject to removal only after charges were preferred by the City Council and a full hearing held before the Civil Service Commission. Discharge was proper only upon proof of inefficiency, neglect of duty or misconduct in office. The recommendations of the Commission were codified in Baltimore City Ordinance 904, which was enacted in 1961. Article I, § 7 et seq. Baltimore City Code (1983). This municipal legislation created a City Council Office of Financial Review.

Ronny Goldsmith, a government finance and public policy expert, was selected as the Director of the Office of Financial Review on April 1, 1980. Goldsmith's duties included analyzing the city budget and studying municipal fiscal problems, procedures and practices in order to make recommendations to the City Council. Her analyses led directly and indirectly to the disclosure of millions of dollars of misappropriated, mismanaged and "off-budget" funds in violation of the Baltimore City Charter and federal and state laws. Her work was frequently reported in the press.

On September 30, 1985, City Council Bill 1009 was introduced. The bill was designed to abolish the Office of Financial Review, and create in its stead the Office of Councilmanic Services. All personnel of the Office of Financial Review, except for the director, were to be transferred to Councilmanic Services. The Office of Councilmanic Services was to operate under the direction of an oversight committee composed of persons designated by the President of the City Council, who was to chair the oversight committee. The bill received significant media attention, and was the object of much opprobrium in the local news media. The bill was amended on February 4, 1986, to grandfather Goldsmith into the Director's office of the new agency. The Director no longer had tenure. She could be removed by a majority vote of the oversight committee, subject to the approval of a City Council majority.

On February 18, 1986, the amended Bill 1009 was approved by the City Council. The bill was signed by the Mayor on March 12, 1986, effective that date as Ordinance No. 625, as codified in Article I, § 7 et seq. Baltimore City Code. Ms. Goldsmith argues that the Ordinance was approved because of her conflicts with City Council members and her subordinates who had influence with those Council members. The City argues that the new agency was created because the 1961 legislation became inadequate to address the needs of the City Council for staff support. We need not reach the merits of this dispute because we hold that this court, as well as the district court, lacks subject matter jurisdiction over the claims presented.

II.

Goldsmith brings this action under 42 U.S.C. section 1983, which provides:

Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceedings for redress.

Section 1983 does embrace Goldsmith's claims that Ordinance Number 625 enacted by the City Council and Mayor of Baltimore deprives her of a right "secured by the Constitution and laws," to wit, due process protection before discharge from employment. However, the federal cause of action created by this section does not itself confer jurisdiction upon the federal district courts to adjudicate these claims. To establish jurisdiction, Goldsmith relied primarily on 28 U.S.C. § 1343(a)(3):

The district courts shall have original jurisdiction of any civil action authorized by law to be commenced by any person:

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(3) to redress the deprivation, under color of any State law, statute, ordinance, regulation, custom or usage, of any right, privilege or immunity secured by the Constitution of the United States or by any Act of Congress providing for equal rights of citizens or of all persons within the jurisdiction of the United States.

This court has explained that "Federal courts are courts of limited jurisdiction and are empowered to act only in those specific instances authorized by Congress. The burden is on the party asserting the jurisdiction of the court to show that jurisdiction does, in fact, exist." Bowman v. White, 388 F.2d 756 (4th Cir.1968). See also Fairfax Countywide Citizens v. Fairfax County, 571 F.2d 2299 (4th Cir.1978) and 1 J. Moore, J. Lucas, H. Fink, D. Wechstein, & J. Wicker, Moore's Federal Practice ¶ 0.603 (2d ed. 1986). The mere existence of a disputed issue of federal law does not confer federal question jurisdiction. McCorkle v. First Pennsylvania Banking and Trust Co., 459 F.2d 243 (4th Cir.1972) (citing Gully v. First Nat'l Bank, 299 U.S. 109, 57 S.Ct. 96, 81 L.Ed. 70 (1936)). The parties' failure to address the jurisdictional issue does not preclude our consideration. A federal court must satisfy itself that it has jurisdictional power to rule on the merits of a case. Johnson v. Town of Elizabethtown, 800 F.2d 404, 407 n. 2 (4th Cir.1986) and Cook v. Georgetown Steel Corp., 770 F.2d 1272, 1274 (4th Cir.1985). Because we believe that Goldsmith's complaint failed to raise a substantial federal question, we conclude that the district court lacked subject matter jurisdiction necessary to decide this case.

In Hagans v. Lavine, 415 U.S. 528, 536-37, 94 S.Ct. 1372, 1378-79, 39 L.Ed.2d 577 (1974), where a plaintiff asserted jurisdiction under section 1343(a)(3), the Supreme Court explained the substantiality doctrine in these terms:

Over the years this Court has repeatedly held that the federal courts are without power to entertain claims otherwise within their jurisdiction if they are so attenuated and unsubstantial as to be absolutely devoid of merit.

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The question may be plainly unsubstantial either, because it is obviously without merit or because its unsoundness so clearly results from the previous decisions of this Court as to foreclose the subject and leave no room for the inference that the question sought to be raised can be the subject of controversy. (Citations omitted).

The Hagans court ultimately concluded that the plaintiff's claims were not too insubstantial for consideration because it could not conclude that the plaintiff's claims were patently irrational, nor could it find cases dealing specifically with the relevant regulation and settling the issue. 415 U.S. at 539, 94 S.Ct. at 1380.

This court applied the substantiality doctrine as formulated in Hagans, in Eastern Band of Cherokee Indians v. Donovan, 739 F.2d 153, 159 (4th Cir.1984). The Tribe claimed that actions of the Department of Labor deprived the Tribe of due process and equal protection of the laws by forcing the Tribe to waive available defenses and its right to a hearing. This court ruled that the Tribe's claims had been foreclosed by prior case law which had settled its claim in this circuit. See Crosby by Crosby v. Holsinger, 816 F.2d 162, 163 (4th Cir.1987) ("A claim is insubstantial only if `its unsoundness so clearly results from the previous ...