McClintock v. Eichelberger

• Decision Date: 24 March 1999
• Docket Number: No. 98-3443,98-3443
• Citation: 169 F.3d 812
• Parties: Jon McCLINTOCK; Cherryhill Assoc. Inc., Appellants, v. John EICHELBERGER; Brad Cober; Alexa Fultz; Robert Will; John Ebersole; Southern Alleghenies Planning and Development Commission.
• Court: U.S. Court of Appeals — Third Circuit

Page 812

169 F.3d 812

Jon McCLINTOCK; Cherryhill Assoc. Inc., Appellants, v. John EICHELBERGER; Brad Cober; Alexa Fultz; Robert Will John Ebersole; Southern Alleghenies Planning and Development Commission.

No. 98-3443.

United States Court of Appeals Third Circuit.

Argued Feb. 17, 1999.

Decided March 24, 1999.

Daniel M. Berger, Paul A. Lagnese (argued), Berger Law Firm, Pittsburgh, PA, for Appellants.

Robert L. McTiernan (argued), Tucker Arensberg, P.C., Pittsburgh, PA, for Appellees.

Before: GREENBERG, ROTH, and LOURIE, ^* Circuit Judges

OPINION OF THE COURT

GREENBERG, Circuit Judge.

I. INTRODUCTION

This matter is before this court on an appeal from an order entered in the district court on July 28, 1998, granting the appellees' motion pursuant to Fed.R.Civ.P. 12(b)(6) to dismiss the first amended complaint in this case for failure to state a claim on which relief may be granted. The case arises principally under the First Amendment to the United States Constitution, applicable to the states through incorporation under the Fourteenth Amendment. See Gitlow v. New York, 268 U.S. 652, 666, 45 S.Ct. 625, 629, 69 L.Ed. 1138 (1925). In addition, appellants have set forth a supplemental state-law claim. We are concerned here with the First Amendment's impact on the awarding of a governmental contract. In view of the procedural posture of this case we accept the appellants' factual allegations as true and view them in the light most favorable to appellants. See Smith v. National Collegiate Athletic Ass'n, 139 F.3d 180, 183 (3d Cir.1998), rev'd on other grounds, --- U.S. ----, 119 S.Ct. 924, 142 L.Ed.2d 929 (1999).

Appellants, Jon McClintock and Cherryhill Associates, Inc., brought this action against appellees John Eichelberger, Jr., Brad Cober, Alexa Fultz, Robert Will, John Ebersole, and Southern Alleghenies Planning and Development Commission. Appellants assert that McClintock at all times relevant to this action was engaged in the business of marketing and advertising through Cherryhill, a Pennsylvania corporation, in which he is the principal shareholder. The individual appellees are commissioners of Blair, Somerset, and Huntington Counties, Pennsylvania, and as such are members of the Executive Board of the appellee, Southern Alleghenies Planning and Development Commission which, according to the appellants, "is a corporation or other entity existing under the laws of the Commonwealth of Pennsylvania." Notwithstanding that imprecise characterization, it is undisputed that Southern Alleghenies is a public entity. Appellants allege that Southern Alleghenies at all times relevant "was engaged in developing the business and industries of the Counties of Bedford, Blair, Cambria, Somerset, Huntingdon and Fulton."

The complaint alleges that beginning in 1985 appellants and Southern Alleghenies "developed an ongoing business relationship ... as independent contractors," meaning that appellants have been independent contractors engaged by Southern Alleghenies to perform services. In particular, the complaint alleges that in 1985 Southern Alleghenies retained McClintock to coordinate the promotion of its "Seatbelt Safety Demonstration Project" and in 1992 Southern Alleghenies retained Cherryhill "to coordinate providing promotional materials and advertising for the 1992 United States Olympic Cycle Trials which was coordinated by" Southern Alleghenies. Appellants allege that they performed their services to the satisfaction of Southern Alleghenies.

The final particularized allegation constituting this "ongoing business relationship" is that "[i]n the years of 1995, 1996 and 1997, ... Southern Alleghenies purchased various promotional materials from ... Cherryhill such as magnets, vinyl banner and bags and specially imprinted 'Slinkies.' " It thus appears that the "ongoing business relationship" between appellants and Southern Alleghenies consisted of one contract in 1985 performed by McClintock as an independent contractor, one contract in 1992 performed by Cherryhill as an independent contractor, and a vendor-vendee relationship between Cherryhill and Southern Alleghenies from 1995 through 1997 involving the sale of promotional materials.

The appellants next alleged that because of their "ongoing relationship" Southern Alleghenies requested Cherryhill "to submit a proposal ... to perform marketing services in connection with [its] TEAM PA Initiative. The marketing campaign proposed by ... Cherryhill was designed to make companies in the six county area aware of a survey process being conducted prior to interviewers contacting businesses to set up interview dates." Of course, appellants allege that Cherryhill's proposal provided for Southern Alleghenies to pay Cherryhill "for the services to be performed under the marketing contract."

Appellants allege that the TEAM PA Initiative was a "coordinated effort" between Southern Alleghenies and certain otherwise unidentified "Industrial Development Corporations." The Industrial Development Corporations reviewed Cherryhill's proposal as well as those from other firms and "unanimously agreed to award the marketing contract to ... Cherryhill." Appellants allege that on May 21, 1997, the Finance Committee of Southern Alleghenies approved awarding the contract to Cherryhill following which the contract was presented to the Southern Alleghenies Executive Board for final approval.

Appellants allege that appellee "Eichelberger stated his opposition to awarding the contract to ... Cherryhill because [appellants] had supported and performed services for public officials and political candidates who [Eichelberger] opposed." The other individual appellees agreed with Eichelberger. As a result of the vote of the five individual appellees "constituting a majority of the Executive Board" it defeated a motion to award the contract to Cherryhill. The Executive Board by the same vote then awarded the contract to another concern. While the complaint is unclear on this point, we infer that the Executive Board must have more than five members and that some of the members favored awarding the contract to Cherryhill.

Appellants alleged that appellees did not award the contract to Cherryhill because appellants:

in the exercise of their rights under the First and Fourteenth Amendments, had supported and performed services for various public officials and political candidates who were opposed by Defendant Eichelberger and some or all of the other individual Defendants, or, in the alternative, Defendant Eichelberger opposed said public officials and political candidates and the other individual Defendants supported Defendant Eichelberger in denying the marketing contract to Plaintiff Cherryhill, with said other individual Defendants knowing that Defendant Eichelberger's oppositions was based upon Plaintiffs' support of said public officials and political candidates.

Appellants alleged that by reason of their "long, ongoing and satisfactory business relationship" with Southern Alleghenies and the approval of their proposal by the Industrial Development Corporations "acting as the TEAM PA Advisory Committee" as well as by Southern Alleghenies' Finance Committee, they "had the expectation that the marketing contract would be awarded to ... Cherryhill." Thus, they alleged that the appellees acting under color of state law in violation of 42 U.S.C. § 1983 penalized them from exercising "their rights of free speech and assembly, as guaranteed by the First and Fourteenth Amendments ... by supporting and working for public officials and political candidates of their choice." Appellants also asserted that the facts they alleged constituted the statelaw tort of interference with "the advantageous relationship between ... Cherryhill and ... Southern Alleghenies." Appellants sought compensatory and punitive damages. The district court had jurisdiction over appellant's complaint under 28 U.S.C. § § 1331, 1343(a), and 1367.

As we have indicated, the appellees moved to dismiss under Fed.R.Civ.P. 12(b)(6). The district court granted the motion in its memorandum and order of July 28, 1998. In its memorandum the district court set forth the background of the case and then indicated that in Elrod v. Burns, 427 U.S. 347, 96 S.Ct. 2673, 49 L.Ed.2d 547 (1976), "the Supreme Court recognized that a public employee who alleges that he was discharged or threatened with discharge solely because of his partisan political affiliation or nonaffiliation states a viable claim under [42 U.S.C.] § 1983 that his First Amendment rights have been violated." The district court then indicated that in Branti v. Finkel, 445 U.S. 507, 100 S.Ct. 1287, 63 L.Ed.2d 574 (1980), the Supreme Court confirmed the Elrod holding that patronage dismissals are unconstitutional unless political affiliation is an appropriate requirement for the effective performance of the public office involved. The district court next said that in Rutan v. Republican Party of Illinois, 497 U.S. 62, 110 S.Ct. 2729, 111 L.Ed.2d 52 (1990), the Supreme Court extended Elrod and Branti by holding that those cases applied "to promotion, transfer, recall, and hiring decisions based on party affiliation and support." Id. at 79, 110 S.Ct. at 2739.

The district court then addressed two Supreme Court cases which, like this one, involved not employees, but independent contractors, Board of County Comm'rs v. Umbehr, 518 U.S. 668, 116 S.Ct. 2342, 135 L.Ed.2d 843 (1996), and O'Hare Truck Serv., Inc. v. City of Northlake, 518 U.S. 712, 116 S.Ct. 2353, 135 L.Ed.2d 874 (1996). The district court pointed out that in Umbehr and O'Hare the Court held that a government may not terminate an independent contractor's relationship to retaliate against the contractor for the exercise of his rights to political allegiance or political association. The district court noted, however, that Umbehr and O'Hare involved situations in which there had been ongoing commercial...