Hogue v. Clinton, No. 85-1573

• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)
• Writing for the Court: Before LAY, Chief Judge, FLOYD R. GIBSON, Senior Circuit Judge, and ROSS; FLOYD R. GIBSON; LAY; Based in part on this language in Carey
• Citation: 791 F.2d 1318
• Parties: William HOGUE, Appellee, v. Bill CLINTON, Governor of State of Arkansas; Kenneth Whitlock; Barrett Toan; Gail Huecker; Ray Scott and Curtis Ivery, in their capacity as employees of the Department of Human Services of the State of Arkansas, Appellants.
• Docket Number: No. 85-1573
• Decision Date: 15 July 1986

Page 1318

791 F.2d 1318 1 Indiv.Empl.Rts.Cas. 1346 William HOGUE, Appellee,
v.
Bill CLINTON, Governor of State of Arkansas; Kenneth
Whitlock; Barrett Toan; Gail Huecker; Ray Scott and
Curtis Ivery, in their capacity as employees of the
Department of Human Services of the State of Arkansas, Appellants. No. 85-1573. United States Court of Appeals,
Eighth Circuit. Submitted Jan. 15, 1986.
Decided May 27, 1986.
Rehearing Denied July 15, 1986.

Page 1319

E. Jeffrey Story, Asst. Atty. Gen., Little Rock, Ark., for appellants.

Bob Scott, North Little Rock, Ark., for appellee.

Before LAY, Chief Judge, FLOYD R. GIBSON, Senior Circuit Judge, and ROSS, Circuit Judge.

FLOYD R. GIBSON, Senior Circuit Judge.

Appellants in this case, the Governor of the State of Arkansas and various other present or former state employees, appeal from the district court's entry of judgment in favor of the plaintiff below, appellee William Hogue. Hogue alleged in his complaint that his discharge from his position as Director of the Scott County Office of the Arkansas Department of Human Services, Division of Social Services, deprived him of property and liberty in violation of the Fourteenth Amendment to the United States Constitution, and 42 U.S.C. Sec. 1983. The district court held that Hogue had been deprived of both liberty and property interests without due process, and ordered that Hogue be considered to have remained an employee of the Department of Human Services for salary and fringe benefit purposes until he was provided a proper hearing. Hogue v. Clinton, 605 F.Supp. 1288 (W.D.Ark.1985). We reverse outright the district court's judgment that Hogue had a property interest in continued employment. We also reverse the district court's holding as to Hogue's liberty interest, and remand for a determination of whether Hogue established the prerequisites for entitlement to a name clearing hearing.

I. FACTS

The facts surrounding Hogue's termination from his position with the Arkansas Department of Human Services are set forth in detail in Hogue, 605 F.Supp. 1289-94, and will be stated more briefly here. Hogue had been employed with the State Department of Human Services, an agency of the State of Arkansas, since 1962. For several years prior to his discharge Hogue was the Director of the Scott County Office of Social Services in Waldron, Arkansas (Scott County Office). The Scott County Office was responsible for administering several social services, including Medicaid, food stamps, and Aid to Families with Dependent Children (AFDC). Because of complaints received about services provided by the Scott County Office, an investigation was begun into Hogue's administration of the office. After this preliminary investigation was conducted, a report listing alleged irregularities in Hogue's running of the Scott County Office was submitted to Barrett Toan, then Commissioner of the Division of Social Services. ¹

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Upon receiving the report, Commissioner Toan directed the investigators to interview past and present employees of the Scott County Office to identify those cases in which misconduct had occurred. After these interviews were completed, the chief investigator submitted a report dated August 25, 1980 to Toan, listing nineteen alleged violations or irregularities in the running of the office. ² Toan reviewed this report, came to the decision to terminate Hogue, and so notified Hogue by letter of September 2, 1980. The letter sent by Toan to Hogue describes in general terms the allegations in the August 25th report, but gives no specific information as to these charges.

On September 16, 1980, Hogue appealed his termination to Gail Huecker, Executive Director of the Department of Human Services, pursuant to the Department's grievance procedure. Huecker responded by letter dated September 29, 1980 that she was overturning Toan's decision to terminate Hogue, reinstating him with back pay, and placing him on administrative leave. Huecker gave Commissioner Toan seven days to determine whether further action would be taken against Hogue. On October 2, 1980 a meeting was held in Toan's office, with Toan, Hogue, Hogue's attorney Mr. George Jernigan, Kenny Whitlock, Director of Program Operations, and Debby Nye, an attorney for Human Services, all present. The allegations against Hogue apparently were discussed at this meeting, although as the district court noted no record was made of the meeting.

Following this meeting, on October 7, 1980, Toan once again wrote Hogue, advising him that he was being terminated from employment effective October 10, 1980. Hogue appealed a second time to Huecker, and a second meeting was held on October 29, 1980 in the offices of Ray Robinson, Deputy Director of Human Services, who presided in Huecker's absence. A few

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days after this meeting, on November 3, Mr. Robinson informed Hogue that he had determined to uphold Toan's decision to terminate Hogue without reinstating back pay. Robinson also advised Hogue that he had the right to appeal to the Arkansas Merit Council, a then-existing appeal procedure established for state employees by Act 693 of 1981 (Ark.Stat.Ann. Secs. 12-3901 et seq.) (Supp.1983). Although the parties scheduled a hearing before the Council, it was never held because a state trial court held Act 693 unconstitutional, a holding later affirmed by the Arkansas Supreme Court. Patton v. Ragland, 228 Ark. 231, 668 S.W.2d 3 (1984). Because the practical effect of the state courts' decisions in Patton was to abolish the Arkansas Merit System Council Board, Hogue was advised in August 1983 by Curtis L. Ivery, then Commissioner of the Arkansas Department of Human Services, that his internal appeal of the termination was exhausted and that his only alternative was to initiate civil litigation.

Hogue filed the present action on September 9, 1983. ³ The case was tried to the court on January 14 and 15, 1985, with the court rendering its decision on April 5, 1985. The court determined that because stigmatizing reasons were given in the course of his termination, Hogue was entitled to a due process hearing before his termination. Hogue, 605 F.Supp. at 1297. The court also found that Hogue had not received the name clearing hearing which he was due prior to his termination. Id. at 1298. Further, the district court held that Hogue had a "legally enforceable expectancy of employment" also sufficient to require a due process hearing before his termination. Id. at 1297. The court based its finding on the provisions of The Policies and Procedures on Employee Grievance of the Department of Human Services [Grievance Policies and Procedures] as well as the provisions of Act 693 of 1981. The court explained its finding as follows:

Under the heading "Appeal of Termination" [in the Grievance Policies and Procedures] a specific procedure is set forth for an employee who believes he has been wrongfully terminated to follow. The lead sentence under this heading provides that an employee of the department "who feels he/she has been terminated unfairly will have the right to appeal, under the following formal procedure." Then, the procedure is set forth which culminated in an appeal before the Merit System Council * * * * Thus, these provisions of the policies, especially when coupled with the provisions of Act 693 of 1981, clearly, in the court's view, provided the employees of that department with the sufficient expectancy of continued employment to require that a due process hearing be held before termination.

Id. The court additionally found that Hogue had been deprived of this property right without due process because he was never provided a meaningful hearing. Those hearings which did take place on October 2 and 29, 1980 were deficient, in the court's view, in that Hogue was given neither the specifics of the charges against him, nor the opportunity to refute those charges. Id. at 1292-93, 1298.

II. LIBERTY INTEREST

Appellants claim that the district court erred in concluding that Hogue had been deprived of a liberty interest without due process because he did not receive a pretermination name clearing hearing. In particular, appellants cite Seal v. Pryor, 670 F.2d 96, 99 (8th Cir.1982), in support of their claim that Hogue was not entitled to such a hearing because he failed to prove that the stigmatizing information was false and that appellants made the information public. The district court noted, however, that

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since Seal v. Pryor this court has construed the Supreme Court's holding in Carey v. Piphus, 435 U.S. 247, 98 S.Ct. 1042, 55 L.Ed.2d 252 (1978), to entitle a plaintiff to nominal damages for a failure to hold a due process hearing prior to termination even if the charges were true. Hogue, 605 F.Supp. at 1296-97; see also Pollock v. Baxter Manor Nursing Home, 716 F.2d 545, 547 (8th Cir.1983) (per curiam) (Pollock II ). ⁴ In Payne v. Ballard, 761 F.2d 491, 493 (8th Cir.1985), this court stated that for the plaintiff to establish a liberty interest, "he must show that the reasons for discharge stigmatized him and that the defendants made the reasons public."

In this case, the district court found that Hogue was terminated for stigmatizing reasons, Hogue, 605 F.Supp. at 1297, a finding we conclude not to be clearly erroneous in light of the serious nature of the charges of misconduct against him. ⁵ The court, however, did not expressly find that the appellants made the charges against Hogue public. ⁶ Although it may be inferred that some dissemination had occurred from the court's statement that "most everyone in Scott County knew that 'fraud investigators' were investigating [Hogue]," the court made no finding as to whether apellants were responsible for any dissemination that occurred. Because a finding of publication is a prerequisite to demonstrating a liberty interest, see Payne, 761 F.2d at 493, we remand to the district court for determination of...