Edmundson v. Borough of Kennett Square

• Decision Date: 23 September 1993
• Docket Number: No. 92-1848,92-1848
• Citation: 4 F.3d 186
• Parties: Unempl.Ins.Rep. CCH 22,077 Harry T. EDMUNDSON, Appellant, v. BOROUGH OF KENNETT SQUARE; Robert F. Goddu; Kenneth Roberts; Herbert L. Waltz; Albert J. McCarthy, Appellees.
• Court: U.S. Court of Appeals — Third Circuit

Page 186

4 F.3d 186

Unempl.Ins.Rep. CCH 22,077

Harry T. EDMUNDSON, Appellant, v. BOROUGH OF KENNETT SQUARE; Robert F. Goddu; Kenneth Roberts; Herbert L. Waltz; Albert J. McCarthy, Appellees.

No. 92-1848.

United States Court of Appeals Third Circuit.

Argued April 28, 1993.

Decided Aug. 10, 1993.

Sur Petition for Rehearing Sept. 23, 1993.

Jeffrey L. Pettit (argued), Richard E. Stabinski, Phillips & Phelan, Philadelphia, PA, for appellant.

Christine M. Brenner (argued), Robert G. Hanna, Marshall, Dennehey, Warner, Coleman & Goggin, Philadelphia, PA, for appellees.

Before: BECKER, HUTCHINSON, and WEIS, Circuit Judges.

OPINION OF THE COURT

WEIS, Circuit Judge.

In this employment discharge case brought under 42 U.S.C. Sec. 1983, we decide that an unemployment compensation proceeding reviewed by a state court invokes claim preclusion so as to bar recovery against a municipality and its officials in their governmental capacities. However, issue preclusion may not be applied to another administrative agency's unreviewed finding that plaintiff's public criticism of his superior officer was not protected by the First Amendment. Consequently, plaintiff's claim that he was discharged in retaliation for his exercise of free speech must yet be resolved against defendants in their personal capacities. We will affirm the district court's entry of summary judgment in part and reverse in part. 818 F.Supp. 798.

Plaintiff contends that he was wrongfully discharged from his position as a police officer for the Borough of Kennett Square, Pennsylvania. He alleges that the Borough and individual defendants, the mayor, members of the Borough Council, and the police chief in their official and personal capacities, dismissed him because of his adverse comments about the police chief.

Before his discharge in October, 1989, plaintiff had experienced several disciplinary problems with the department. In 1988, plaintiff was accused of breaking into the police chief's office and was suspended for one day. On March 1, 1989, and June 28, 1989, the Chester County Press published statements that plaintiff had made, including: "I was accused of [breaking into the police chief's office] at 11:00 p.m. at night, given a letter that I was going to be suspended and suspended that same night. So we have judge, jury and execution [sic] all in one shot." The article also quoted plaintiff as stating: "Out of all the amendments to the constitution, I feel that [the police chief] has at least bent most of them and just totally ignored the rest of them."

On July 10, 1989, the Borough suspended plaintiff for three days on the ground that he had violated the police department manual which lists "[p]ublicly criticizing the official action of a superior officer" as conduct unbecoming an officer. The Borough Civil Service Commission affirmed the suspension on September 28, 1989, and plaintiff appealed its ruling to the Court of Common Pleas. Because he did not actively prosecute the appeal, it was dismissed on March 2, 1993.

In July, 1989, plaintiff failed to make changes in a police report as directed by his superior and, in August of that year, he did not carry out the chief's order to accompany an inebriated man to the hospital. On October 2, 1989, acting on the mayor's recommendation, the Borough Council discharged plaintiff citing the preceding two incidents. After a hearing, the Civil Service Commission upheld the Council's action. Plaintiff appealed to the Court of Common Pleas, but later withdrew that appeal.

Plaintiff applied for and was denied unemployment compensation. The Pennsylvania Unemployment Compensation Board of Review found that the termination of his employment was justified because of his neglect of duty and failure to follow orders. The Commonwealth Court of Pennsylvania affirmed, concluding that plaintiff's actions amounted to willful misconduct.

After reviewing the various administrative and judicial proceedings in which plaintiff had been involved, the district court entered summary judgment. Invoking issue preclusion, the court ruled that plaintiff had been discharged for reasons other than exercising his rights of free speech when he criticized the police chief. The court also concluded that the result would be the same under claim preclusion because plaintiff did not raise his First Amendment contentions in the prior administrative and judicial proceedings. The Civil Service Commission's ruling on plaintiff's public criticism of the police chief, the court considered as equivalent to "a state ruling that the First Amendment did not protect Edmundson's assertions, the threshold issue in this case." The Commission specifically had held that "Officer Edmundson's statements and criticisms were more of a personal charge by Officer Edmundson against the Chief and not a matter of general public concern and interest."

The district court also rejected plaintiff's contention that he had been denied due process because of the mayor's initial proposal that plaintiff either resign or face discharge by the Borough.

I.

In previous opinions, we have reviewed the doctrines of claim preclusion and issue preclusion in somewhat similar cases involving employees discharged by Pennsylvania municipal authorities. See, e.g., Bradley v. Pittsburgh Bd. of Educ., 913 F.2d 1064 (3d Cir.1990); Gregory v. Chehi, 843 F.2d 111 (3d Cir.1988). We need only summarize those defenses at this point.

Issue preclusion, otherwise known as collateral estoppel, bars re-litigation of an issue identical to that in a prior action. Claim preclusion, often called res judicata, is broader in effect and prohibits reexamination not only of matters actually decided in the prior case, but also those that the parties might have, but did not, assert in that action.

When a prior case has been adjudicated in a state court, federal courts are required by 28 U.S.C. Sec. 1738 to give full faith and credit to the state judgment and, in section 1983 cases, apply the same preclusion rules as would the courts of that state. Migra v. Warren City Sch. Dist. Bd. of Educ., 465 U.S. 75, 85-87, 104 S.Ct. 892, 898-99, 79 L.Ed.2d 56 (1984) (claim preclusion); Allen v. McCurry, 449 U.S. 90, 95-105, 101 S.Ct. 411, 415-20, 66 L.Ed.2d 308 (1980) (issue preclusion). Decisions of state administrative agencies that have been reviewed by state courts are also given preclusive effect in federal courts. Kremer v. Chemical Constr. Corp., 456 U.S. 461, 479-85, 102 S.Ct. 1883, 1896-99, 72 L.Ed.2d 262 (1982). However, in section 1983 cases, only state administrative factfinding is entitled to preclusive effect in the federal courts when the agency ruling remains unreviewed by state courts. University of Tenn. v. Elliott, 478 U.S. 788, 799, 106 S.Ct. 3220, 3226, 92 L.Ed.2d 635 (1986). See infra pp. 192-93.

In the case at hand, we must consider the effect of both reviewed and unreviewed state agency decisions, each involving different issues. With respect to both the Civil Service Commission's ruling on plaintiff's termination and that of the Unemployment Compensation Board which was reviewed by the Commonwealth Court, issue preclusion prevents reexamination of the fact that plaintiff was discharged because of prior infractions and because his failure to follow orders amounted to willful misconduct.

Thus, there are valid reasons under state law to justify plaintiff's discharge. That determination, however, does not necessarily mean that plaintiff was in fact discharged solely for these reasons. Assuming that plaintiff's criticism of the police chief was protected by the First Amendment, the question is whether the Borough would have terminated plaintiff's employment even in the absence of the challenged remarks. Mt. Healthy City Sch. Dist. Bd. of Educ. v. Doyle, 429 U.S. 274, 287, 97 S.Ct. 568, 576, 50 L.Ed.2d 471 (1977). This matter requires examination of two possibilities in terms of issue or claim preclusion--whether plaintiff's comments are protected by the First Amendment and whether they were the sine qua non of his discharge.

If these alternatives had been adjudicated by the Commonwealth Court or the Court of Common Pleas, issue preclusion would apply under both federal and Pennsylvania law. It is clear, however, that no such review occurred in any state court proceeding.

The only administrative ruling in this case which was reviewed by a state court was the unemployment compensation proceeding. Plaintiff did not raise his claim of retaliatory discharge or produce any evidence on that subject in the administrative proceeding, nor did he raise the point in his appeal to the Commonwealth Court.

Because plaintiff never raised the First Amendment defense, issue preclusion cannot be based on the unemployment compensation case. The question then arises whether claim preclusion is applicable to the judgment of the Commonwealth Court.

In reviewing unemployment compensation decisions, the Commonwealth Court has the authority to determine whether the agency adjudication violates the Constitution, is contrary to law, or is based on a finding of fact that is not supported by substantial evidence. 2 Pa.Cons.Stat. Sec. 704; see Hoffman v. Commonwealth, Unemployment Compensation Bd. of Review, 524 Pa. 470, 574 A.2d 57, 60 (1990). That court has taken cognizance of constitutional issues in unemployment compensation cases when the exercise of First Amendment rights was asserted as a reason for discharge. In Bala v. Commonwealth, Unemployment Compensation Board of Review, 42 Pa.Cmwlth. 487, 400 A.2d 1359, 1362-69 (1979), the court discussed at some length the extent to which freedom of speech would furnish a defense to the employer's contention that the claimant had been properly discharged. The court said:

"The symbiosis between the Commonwealth's interest in preserving the [unemployment compensation] fund and the employer's interest in discharging for willful misconduct any employee disregarding...