Feldman v. Philadelphia Housing Authority
| Decision Date | 15 February 1995 |
| Docket Number | 93-1978,Nos. 93-1978 and 93-2139,Nos. 93-1977 and 93-2129,93-2115,Nos. 93-1977,No. 93-2115,93-2129 and 93-2139,s. 93-1977 and 93-2129,s. 93-1978 and 93-2139,s. 93-1977 |
| Citation | 43 F.3d 823 |
| Parties | , 10 IER Cases 131, 10 IER Cases 480 James C. FELDMAN, v. The PHILADELPHIA HOUSING AUTHORITY; Jonathan A. Saidel, individually and as Chairman of the Board of Commissioners of the Philadelphia Housing Authority; John Paone, individually and as Executive Director of the Philadelphia Housing Authority; Peggy Jones; Clayton Carter, Jr.; Nellie Reynolds; Courtney C. Smith, Jr., individually and as members of the Board of the Philadelphia Housing Authority. Jonathan A. Saidel, in his individual capacity, Appellant inJohn Paone, Appellant inPhiladelphia Housing Authority, Jonathan A. Saidel and John Paone, in their official capacities, Appellants in |
| Court | U.S. Court of Appeals — Third Circuit |
Alan Klein (argued), Barry H. Boise, Cohen, Shapiro, Polisher, Sheikman & Cohen, Philadelphia, PA, for appellant Jonathan A. Saidel.
Robert J. Sugarman (argued), Sugarman & Associates, Philadelphia, PA, for appellant John Paone.
Jerome J. Shestack (argued), Joseph C. Crawford, Jonathan D. Wetchler, Wolf, Block, Schorr & Solis-Cohen, Philadelphia, PA, for appellants Philadelphia Housing Authority, Jonathan Saidel, and John Paone.
Joseph F. Lawless, Jr. (argued), Newtown Square, PA, for appellee.
Before STAPLETON, GARTH and PRATT, * Circuit Judges.
INTRODUCTION
Plaintiff James C. Feldman claims the defendant Philadelphia Housing Authority ("PHA"), through its agents, defendants Jonathan A. Saidel and John Paone, violated the
First and Fourteenth Amendments of the Constitution of the United States, as well as the State of Pennsylvania's "whistleblower" statute, by firing him in retaliation for publishing reports that exposed wrongdoing at PHA. After a jury trial the district court entered judgment for plaintiff on all claims, awarding him $616,696 in compensatory damages and a total of $20,000 in punitive damages. Defendants appeal. We affirm.
Since the jury found for Feldman, we view the facts by drawing from the evidence all reasonable inferences in his favor.
Defendant PHA, a public agency responsible for providing housing for low-income citizens, is the largest housing agency in Pennsylvania and fourth largest in the United States. The agency is governed by a board of commissioners consisting of five members, two each being appointed by the mayor and the city controller, respectively, with the fifth member being selected by the four appointees.
In January 1990 Saidel, exercising his authority as Philadelphia's city controller, appointed himself to the board of commissioners. Three months later, Paone was named as PHA's new executive director, responsible for overseeing the day-to-day activities of the agency. Paone and Saidel worked closely together, routinely discussing the daily management and affairs of PHA.
Feldman had been working at PHA since 1982. From May 1990 until his termination on May 3, 1991, Feldman acted as the director of the agency's Internal Audit Department. In this capacity, Feldman was responsible for investigating, identifying, and exposing waste, inefficiency, fraud, and criminal activity within PHA. In order to carry out this function, Feldman regularly prepared detailed reports of his investigations. Under the internal-audit charter, which specifies the responsibilities of the Internal Audit Department, Feldman was required to present his findings and observations to the executive director and the board of commissioners, i.e. to Paone, as executive director; and to Saidel, as chairman of the board of commissioners as well as to the four other members of the board.
For most of Feldman's career at PHA, his work was considered exemplary. His personnel file contained no reprimands or comments concerning poor job performance. His last performance evaluation, dated April 24, 1990, gave Feldman a rating of "SUPERIOR". However, after Saidel became chairman of the board and Paone became executive director, things changed. In several of his reports on PHA's management and operations over approximately the next twelve months, Feldman revealed numerous improprieties in several key areas at the agency. As required by the internal auditing charter, Feldman made his reports to Paone, Saidel, and the rest of the board. Many of his reports criticized the job PHA's management was doing. On several occasions, Paone and Saidel reprimanded Feldman for preparing the critical reports.
Paone was particularly displeased with Feldman after he reported that management had promoted a PHA employee who was under investigation for corruption. As a result of a tip, the Internal Audit Department had conducted an investigation of PHA's Central Maintenance Department. The investigation revealed that the Central Maintenance Department, which was responsible for the agency's fencing contracts, was involved in an illegal bid-rigging scheme, and several PHA employees were linked to the unlawful activity. Feldman periodically reported to Paone and Saidel on the details of this investigation, including which PHA employees were probably involved. Ultimately, Feldman reported that one of the implicated employees had been promoted despite being under the continuing investigation. Paone challenged Feldman, saying, "I thought you were on our side". Paone then instructed Feldman to remove from his report the reference to the mid-investigation promotion. Feldman complied.
Later, after Feldman circulated a quarterly report to the board that criticized certain other managerial decisions, Paone and Saidel separately reprimanded Feldman and instructed him that in the future he was to report his findings to Paone only. Feldman The last matter that Feldman worked on that was to be circulated to the board was a human-resources audit. The purpose of the audit was to determine if PHA management was using its employees in an efficient and economical manner. Feldman had routinely advised the board and Paone of the progress of the audit. The final audit report would have revealed favoritism and other improprieties in personnel decisions made by Paone and Saidel. In general, the audit was very critical of the manner in which PHA was being run.
refused to yield to this direction, because it was contrary to the internal-audit charter, and he continued to circulate his reports to the entire board.
Around the same time, however, Paone and Saidel were portraying their management of PHA to the public in a different light. Saidel prepared a "Letter from the Chairman" that was featured in PHA's 1991 annual report. The letter stated that although the agency had previously been "financially floundering", when he became chairman and Paone became executive director, "[t]hings had to change fast--and they did". He went on to say that the board of commissioners "began to reorganize PHA management and restore the Authority to a viable condition". Moreover, in the "Letter from the Executive Director", also featured in the annual report, Paone said that PHA's greatest challenge was "to win the hearts, minds and respect of our residents and to develop a team approach with them in resolving other major issues". Had it been published, Feldman's human resources audit report would have severely undercut the annual report's glowing portrayal of management's success.
The same day the human-resources report was to be circulated to the board, Paone, after conferring with Saidel, fired Feldman. He told Feldman that, effective immediately, his services were no longer needed, because the agency had decided to reorganize the Internal Audit Department. Feldman was then promptly escorted out of his office by two police officers, without being given an opportunity to retrieve his work or publish the audit report.
Four months later, Feldman instituted this action in district court against PHA, Paone, and Saidel, and against other PHA board members who were dismissed from the action as defendants at the completion of plaintiff's case-in-chief. Feldman alleged that defendants had fired him for "whistleblowing" in violation of the first and fourteenth amendments, 42 U.S.C. Sec. 1983, and 43 P.S. Sec. 1423(a) and (b) (the Pennsylvania "Whistle-blower" Law).
The case was tried before the Honorable William H. Yohn, Jr. and a jury, which returned a verdict in favor of Feldman and against defendants PHA, Saidel, and Paone. The jury awarded Feldman $616,696 in compensatory damages, of which $500,000 was for front pay. It also awarded Feldman punitive damages against Paone and Saidel in their individual capacities, in the amount of $10,000 each. Defendants now appeal. We have jurisdiction under 28 U.S.C. Sec. 1291.
Defendant PHA raises three issues on appeal:
1) whether the district court erred in not granting judgment as a matter of law dismissing the first amendment and "whistleblower" claims; 2) whether the district court erred by allowing an award of front pay instead of reinstating plaintiff at PHA; and 3) whether the jury's $500,000 award for front pay was excessive.
Both Paone and Saidel argue that the evidence was insufficient to justify punitive damages. Saidel also challenges the award of punitive damages against him, claiming a lack of evidence to establish that he personally participated in Feldman's firing.
We affirm.
Review of a denial of a directed verdict is plenary, and we invoke the same standard that the district court applies. Thus, viewing the evidence in the light most favorable to Feldman, the nonmoving party, we determine whether there is evidence reasonably tending to support his claim. See Bielevicz v. Dubinon, 915 F.2d 845, 849 (3d Cir.1990). While the role of an appellate
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