Hughes v. Region Vii Area Agency On Aging, 04-10355 BC.

• Decision Date: 28 March 2006
• Docket Number: No. 04-10355 BC.,04-10355 BC.
• Citation: 423 F.Supp.2d 708
• Parties: Denise HUGHES and Bob Hughes, Plaintiffs, v. REGION VII AREA AGENCY ON AGING, a Michigan municipal corporation; Bruce King, individually and as Executive Director of Region VII Area Agency on Aging; Drew Orvosh, individually and as Assistant Director of Region VII Area Agency on Aging; Brian K. Edler; and Learman, Peters, Sarow & McQuillan, P.L.C., Defendants.
• Court: U.S. District Court — Eastern District of Michigan

423 F.Supp.2d 708

Denise HUGHES and Bob Hughes, Plaintiffs, v. REGION VII AREA AGENCY ON AGING, a Michigan municipal corporation; Bruce King, individually and as Executive Director of Region VII Area Agency on Aging; Drew Orvosh, individually and as Assistant Director of Region VII Area Agency on Aging; Brian K. Edler; and Learman, Peters, Sarow & McQuillan, P.L.C., Defendants.

No. 04-10355 BC.

United States District Court, E.D. Michigan, Northern Division.

March 28, 2006.

Kim A. Higgs, Bay City, MI, for Plaintiffs.

Connie M. Cessante, David A. Hardesty, Brady, Hathaway, Detroit, MI, for Defendants.

OPINION AND ORDER REJECTING REPORT AND RECOMMENDATION OF MAGISTRATE JUDGE, DENYING MOTIONS FOR SUMMARY JUDGMENT AND SANCTIONS, DISMISSING CLAIMS OF PLAINTIFF BOB HUGHES FOR WANT OF JURISDICTION, DENYING AS MOOT PLAINTIFFS' MOTION TO ENLARGE TIME TO RESPOND TO SANCTIONS MOTION, AND SETTING SCHEDULING CONFERENCE

LAWSON, District Judge.

This matter is before the Court on a report filed by Magistrate Judge Charles E. Binder recommending that the defendants' motions for summary judgment be granted and a motion for sanctions under Federal Rule of Civil Procedure 11 be denied. Plaintiff Denise Hughes was fired from her job at Region VII Area Agency on Aging allegedly for commenting on matters of public concern. She filed a claim for violation of her First Amendment rights pursuant to 42 U.S.C. § 1983. Her husband, Bob Hughes, also joined in the complaint with his separate claims against the Region VII Agency and its officials plus their attorney alleging defamation and tortious interference with business relations. The Region VII defendants moved for summary judgment against Denise Hughes' claim on the ground that Region VII is not a state actor and they did not act under color of law. They also seek Rule 11 sanctions. The other defendants moved for summary judgment on the defamation and tortious interference claims. Magistrate Judge Binder concluded that Region VII is not an agency of the State or its political subdivisions and presumably its employees therefore did not act under color of law when they terminated plaintiff Denise Hughes' employment. He recommended that the defendants' motions for summary judgment be granted, the federal claims be dismissed with prejudice, the Court decline to exercise supplemental jurisdiction over the state law claims and that they be dismissed without prejudice, and the motion for sanctions be denied. The plaintiffs filed timely objections to the recommendation and report, and the Court has conducted a de novo review of the motions. The Court now finds that it cannot agree with the magistrate judge's conclusions that the Region VII defendants were not acting under color of law when they terminated plaintiff Denise Hughes's employment because of the overwhelming evidence otherwise. The Court also concludes it has no subject matter jurisdiction over the claims of Bob Hughes. Therefore, the Court will deny the defendants' motions for summary judgment, dismiss the claims of plaintiff Bob Hughes for want of jurisdiction, deny the motion for Rule 11 sanctions for lack of merit, and deny the plaintiffs' motion to enlarge time for responding to the sanctions motion as moot.

I.

Denise Hughes was employed by Defendant Region VII Area Agency on Aging as a program coordinator and public relations person from January 2002 until August 2004. Plaintiff Bob Hughes, her husband, is a broadcaster for a local radio station.

According to the Agency defendants, Region VII Area Agency on Aging is a Michigan non-profit corporation. It originally was incorporated by three private individuals, but its organization was later changed to a membership basis. The members of the corporation are the City of Saginaw and ten Michigan counties: Bay, Clare, Gladwin, Gratiot, Huron, Isabela, Midland, Saginaw, Sanilac, and Tuscola. The Agency receives almost all of its funding from the state and federal governments. The members each pay a small membership fee.

The Agency is governed by a board of directors. Each of the eleven local governmental units appoints a representative to the board for staggered three-year terms. The board members are not required to be employees of their respective unit of government; however, of the eleven board members appointed by Saginaw and the counties, four are public officials. The members also elect their officers each year by majority vote. Officers may be removed by a majority vote at any time. The board of directors appoints an executive director, who is responsible for the day-to-day operation of the Agency, and he makes employment decisions.

In May 2004, Ms. Hughes reported the behavior of defendant Bruce King, executive director of the Agency, to a reporter for the Bay City Times. It is unclear from the amended complaint and the motion papers exactly what Ms. Hughes told the reporter about Mr. King. On June 30, 2004, Ms. Hughes was reprimanded by defendant Drew Orvosh, assistant director of the Agency, for making inappropriate remarks to employees and violating the Agency's HIPAA rules. She claims the reprimand was retaliation for her report to the newspaper. Mr. Orvosh then put a memo in Ms. Hughes' personnel file stating that Ms. Hughes had threatened to have her husband talk about the Agency's treatment of his wife on his radio show. Ms. Hughes denies making such a comment to Mr. Orvosh.

Ms. Hughes was terminated on August 6, 2004. According to the defendants, Ms. Hughes was terminated "after a long period of counseling, disciplinary action and suspension for various performance issues." Learman Defs.' Mot. Summ. J. at 6. That same day, defendant Brian Elder, an attorney working for the firm Learman, Peters, Sarow & McQuillan and representing the Agency, sent a letter to Scott Meier, Mr. Hughes' manager at the radio station. The letter indicated that the Agency would take legal action against the radio station if the radio station defamed the Agency.

The present lawsuit was filed on December 16, 2004, and an amended complaint was filed on March 14, 2005. In count one, Ms. Hughes seeks recovery for herself alone on the ground that she was reprimanded and ultimately terminated from her job in retaliation for reporting to the media what she believed to be statutory and administrative rules violations committed by the defendant Region VII Area Agency on Aging and defendant Bruce King, its executive director. The claim is directed against Region VII, King, and Drew Orvosh, the Region VII Assistant Director who notified Ms. Hughes of her termination. Ms. Hughes claims that her termination was in violation of her First Amendment right to freedom of speech and section 1983.

Count two is filed on behalf of Bob Hughes alone and alleges libel. Mr. Hughes claims that the letter sent to his employer, radio station WHNN, contained false information about him that tended to harm his reputation. Mr. Hughes alleges that the law firm employing defendant Elder and the Agency defendants are vicariously liable for defendant Elder's actions. Count two names Region VII, Elder, and his law firm, Learman, Peters, Sarow & McQuillan. Counts three and four of the amended complaint allege claims of intentional interference with a contractual relationship and intentional infliction of emotional distress, respectively. Like count two, these counts are brought on behalf of Bob Hughes alone and name the same defendants. Counts three and four were dismissed by stipulation on July 1, 2005.

The Region VII defendants and the Learman defendants each have filed a motion for summary judgment. The Agency defendants argue that count one by Denise Hughes should be dismissed because the Agency is not a public actor and therefore not subject to the First Amendment or section 1983. The Learman defendants argue that count two by Bob Hughes should be dismissed because the complaint fails to state a claim upon which relief can be granted.

II.

A motion for summary judgment under Federal Rule of Civil Procedure 56 presumes the absence of a genuine issue of material fact for trial. The Court must view the evidence and draw all reasonable inferences in favor of the non-moving party, and determine "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The "[s]ummary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed to secure the just, speedy and inexpensive determination of every action." Celotex Carp. v. Catrett, 477 U.S. 317, 327, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (internal quotes omitted).

A fact is "material" if its resolution affects the outcome of the lawsuit. Lenning v. Commercial Union Ins. Co., 260 F.3d 574, 581 (6th Cir.2001). "Materiality" is determined by the substantive law claim. Boyd v. Baeppler, 215 F.3d 594, 599 (6th Cir.2000). An issue is "genuine" if a "reasonable jury could return a verdict for the nonmoving party." Henson v. Nat'l Aeronautics & Space Admin., 14 F.3d 1143, 1148 (6th Cir.1994) (quoting Anderson, 477 U.S. at 248, 106 S.Ct. 2505). Irrelevant or unnecessary factual disputes do not create genuine issues of material fact. St. Francis Health Care Ctr. v. Shalala, 205 F.3d 937, 943 (6th Cir.2000). When the "record taken as a whole could not lead a rational trier of fact to find for the nonmoving party," there is no genuine issue of material fact. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Thus a factual dispute that "is merely colorable or is not significantly probative" will not defeat a motion for summary judgment which is properly supported. Kraft v. United States, 991 F.2d 292, 296 (6th Cir. 19...