Clements v. Airport Authority of Washoe County

Decision Date26 October 1995
Docket NumberNo. 93-16693,93-16693
Citation69 F.3d 321
Parties95 Cal. Daily Op. Serv. 8316, 95 Daily Journal D.A.R. 14,415 Douglas CLEMENTS; Sue Clements, Plaintiffs-Appellants, v. AIRPORT AUTHORITY OF WASHOE COUNTY; Robert White, individually and as Executive Director of the Airport Authority of Washoe County; Board of Trustees of the Airport Authority of Washoe County, Defendants-Appellees.
CourtU.S. Court of Appeals — Ninth Circuit

Lynn G. Pierce, Reno, NV, for plaintiffs-appellants.

John A. Aberasturi (argued), Erickson, Thorpe & Swainston, Reno, NV, for defendants-appellees.

Appeal from the United States District Court for the District of Nevada.

Before: FLETCHER, REINHARDT, and NOONAN, Circuit Judges.

REINHARDT, Circuit Judge:

Douglas and Sue Clements, former employees of the Airport Authority of Washoe County, filed this federal action under Sec. 1983 alleging that their terminations violated the Due Process guarantee of the 14th Amendment and were in retaliation for First Amendment protected whistle-blowing activity. They also asserted ancillary state law claims. The district court granted summary judgment to the defendants, and the Clementses appeal.

I. Factual and Procedural Background

Douglas and Sue Clements were employees of the Airport Authority of Washoe County (Airport Authority). 1 Douglas Clements was Chief of Planning, Engineering and Maintenance, and Sue Clements was Property Management Analyst. The Clementses' positions were eliminated pursuant to the implementation of a reorganization plan developed by the Airport Authority's Executive Director Robert White. The Clementses contend that their positions were eliminated in retaliation for their whistle-blowing activities. They assert that their terminations constitute a denial of procedural due process and an infringement of their First Amendment rights.

The whistle-blowing activities at issue here occurred under the tenure of the Airport Authority's former Executive Director, Vernon Troupe. Troupe resigned following allegations of financial impropriety. Both Douglas and Sue Clements were involved in reporting Troupe's alleged indiscretions, and both provided information to Board members regarding Troupe's activities. Not all Board members were pleased with the Clementses' efforts to expose fraud within the Airport Authority. At least one told Sue Clements, prior to Troupe's resignation, that if she was unhappy she should seek alternative employment rather than make waves.

A few months after Troupe's resignation in early 1988, Robert White was hired as the new executive director. Shortly after his appointment, White developed a reorganization plan for the Airport Authority. After substantive modifications, this plan was adopted by the Board in April, 1989. Prior to the plan's adoption, the Board held public hearings to discuss the proposed reorganization. Douglas Clements made an appearance. Sue Clements did not.

There were four employees who made reports to Board members which led to Vernon Troupe's resignation, only three of whom were publicly identified. These three publicly identified employees were the only employees laid off in the reorganization. Douglas' position of Chief of Planning, Engineering and Maintenance was replaced with a position entitled Senior Engineer. Although he met all of the qualifications for this new position, Douglas was not offered it. Prior to reorganization, Sue Clements' property department had four professional positions. The reorganization reduced the number to three by creating positions with new titles, and Sue was the only properties professional laid off. The three remaining properties professionals were directly transferred into the new jobs, even though two of them had considerably less seniority than Sue.

Immediately after their terminations, Douglas and Sue filed individual grievances pursuant to the employee manual which embodies the Airport Authority's civil service system established pursuant to the laws of Nevada. In their respective grievance hearings, Douglas and Sue claimed that their layoffs were in retaliation for their participation in the Troupe affair, and that the layoffs violated the procedures established by the Airport Authority manual. After individual hearings, the grievance panels issued unanimous decisions finding that the Airport Authority had violated the manual when it failed to offer the Clementses new positions in lieu of layoff. 2 The panels determined that the Clementses should be offered the new positions with all the pay and benefits and no break in service. However, the panels declined to rule on the retaliatory discharge issue on the ground that the claim was beyond their scope and authority.

White, acting in his position as Executive Director, reversed the decisions of the grievance panels, finding that the panel decisions were inconsistent with personnel policy. It was White's position that neither of the Clementses was a civil servant and therefore neither was covered by the Airport Authority manual. After a hearing in 1989, the Board of Trustees adopted White's position. The Clementses filed a petition for judicial review in the Nevada state district court in October, 1989, pursuant to the Nevada Administrative Procedures Act. While the petition for judicial review was pending in state district court, the Clementses commenced this federal action in the federal district court for Nevada on April 12, 1991.

In December, 1991, the Nevada state district court issued its decision. First, it noted that its review was limited by the Nevada APA to an examination of the decision of the Board of Trustees, and that its function was to determine whether the Board's decision was arbitrary, capricious, or unsupported by substantial evidence. Under this standard, the court ruled in favor of the Airport Authority, finding that the Board's decision was supported by substantial evidence. The court refused to address the Clementses' arguments regarding retaliation reasoning that "[t]his is an issue not addressed in the Board of Trustees' decision and, thus, not an issue properly before this Court at this time." That decision was appealed to the Nevada Supreme Court on January 28, 1992. After oral argument in the Nevada Supreme Court, but before that court issued a decision, on August 5, 1993, the federal district court granted summary judgment for all defendants on the basis of a lack of material issue of disputed fact as to any essential element of the Clementses' claims. This appeal followed.

At the time of oral argument in this court on March 16, 1995, the Nevada Supreme Court had yet to issue a decision despite the passage of three years. While this case was under submission in this court, the Nevada Supreme Court issued a divided opinion affirming in part and reversing in part the state district court's denial of the petition for judicial review. The court affirmed the decision that Douglas was not a civil servant. It reversed the judgment as to Sue, finding that she was covered by the Airport Authority's civil service system, and ordered her reinstated with back-pay. We review de novo the decision of the federal district court granting summary judgment, and reverse in substantial part.

II. Preclusive Effect of the State Court Proceedings

Federal courts must give the same preclusive effect to state court judgments that those judgments would be given in that state's own courts. 28 U.S.C. Sec. 1738. See also Kremer v. Chemical Construction Corp., 456 U.S. 461, 465, 102 S.Ct. 1883, 1889, 72 L.Ed.2d 262 (1982). Although different preclusion rules apply in some circumstances to unreviewed findings of administrative proceedings, see Miller v. County of Santa Cruz, 39 F.3d 1030 (9th Cir.1994); McInnes v. California, 943 F.2d 1088 (9th Cir.1991), section 1738 by its own terms applies when administrative findings have been reviewed by state courts of general jurisdiction. Id. See also Eilrich v. Remas, 839 F.2d 630, 632 (9th Cir.1988) (federal courts must give preclusive effect to state court reviewed administrative determinations). Here, there are written decisions by the Board of Trustees containing findings of facts and conclusions of law. These decisions were reviewed by the Nevada district court which issued its own written decision containing factual findings and conclusions of law affirming the Board's decision as supported by substantial evidence. This latter decision was in turn reviewed by the Nevada Supreme Court which partially affirmed and partially reversed. Thus, we must address the question of the preclusive effect to be given to the state proceedings.

A. Supplemental Briefing on the Prior litigation

As described above, the Clementses initially sought review of their employment terminations through the Airport Authority's administrative grievance process, and when this ultimately produced an adverse decision, the couple petitioned for judicial review under the Nevada APA in state district court. By the time this case reached our court on appeal from summary judgment in federal district court, the Nevada state district court had issued a decision denying the Clementses' petition for review, and an appeal from that decision was pending in the Nevada Supreme Court. The initial state district court decision had been issued prior to the federal district court decision.

At first glance, the question whether the Clementses had a property interest in their employment for purposes of their Due Process claims seemed intimately connected to the question whether the Clementses were protected by the Airport Authority's somewhat complicated civil service system. Although the state proceedings did not adjudicate the constitutional claims, their resolution of the civil service claims appeared to provide an authoritative construction of the Airport Authority's civil service regulations, and appeared to answer the questions...

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