McIntire v. State

• Decision Date: 07 August 1990
• Docket Number: No. C6-89-2265,C6-89-2265
• Citation: 458 N.W.2d 714
• Parties: Marcie McINTIRE, Appellant, v. The STATE of Minnesota, Minnesota Housing Finance Agency, James Solem, Individually and in his Official Capacities as its Executive Director; Henry Wesley, Individually and in his Official Capacities as its Personnel Director; and Michael Haley, Individually and in his Official Capacities as Director of Home Mortgage Program, Respondents.
• Court: Minnesota Court of Appeals

Page 714

458 N.W.2d 714

Marcie McINTIRE, Appellant, v. The STATE of Minnesota, Minnesota Housing Finance Agency James Solem, Individually and in his Official Capacities as its Executive Director; Henry Wesley, Individually and in his Official Capacities as its Personnel Director; and Michael Haley, Individually and in his Official Capacities as Director of Home Mortgage Program, Respondents.

No. C6-89-2265.

Court of Appeals of Minnesota.

Aug. 7, 1990.

Review Denied Sept. 28, 1990.

Syllabus by the Court

1. In action seeking damages for alleged violation of free speech rights under 42 U.S.C. Sec. 1983, the trial court correctly determined that agency's executive director, personnel director, and supervisor had a qualified immunity from liability for conduct which did not violate clearly established constitutional rights.

2. Claims alleging liberty and due process violations under 42 U.S.C. Sec. 1983 were properly dismissed because claimant failed to show a protectible property interest in continued employment or a violation of liberty interest that could withstand summary judgment.

3. Absence of evidence of discrimination forecloses federal and state discrimination claims.

4. On the remaining state law claims of wrongful discharge, defamation and breach of contract, trial court properly granted summary judgment as a matter of law.

Stephen C. Fiebiger, Minneapolis, for appellant.

Hubert H. Humphrey, III, Atty. Gen., Sara H. Jones, Sp. Asst. Atty. Gen., St. Paul, for respondents.

Considered and decided by LANSING, P.J., and SCHUMACHER and SHORT, JJ.

OPINION

LANSING, Judge.

Marcie McIntire seeks damages under 42 U.S.C. Sec. 1983 for alleged violations of her civil rights and liberties and for various state law claims arising from discharge from her employment with the Minnesota Housing Finance Agency. Three of the defendants, all government officials, unsuccessfully moved for summary judgment claiming a qualified immunity from liability on the free speech allegations. On appeal from the denial of their motion we reversed and remanded, directing the trial court to reconsider its decision in light of Harlow v. Fitzgerald, 457 U.S. 800, 102 S.Ct. 2727, 73 L.Ed.2d 396 (1982). See McIntire v. State, 419 N.W.2d 799 (Minn.App.1988), pet. for rev. denied, (Minn. Apr. 20, 1988) ("McIntire I" ).

On remand, the trial court in two successive rulings granted summary judgment against McIntire on all claims. McIntire now appeals the adverse judgment on the alleged violations of free speech, liberty, and due process and on her claims of discrimination defamation, breach of contract and wrongful discharge.

FACTS

Marcie McIntire was employed from July 1984 to February, 1985, as the Indian Housing Coordinator for the home mortgage division of the Minnesota Housing Finance Agency. Her duties included overseeing the administration of funds to several Indian housing programs and working with the administrators of those programs and the Indian communities which they serve. McIntire's supervisor, Michael Haley, had ultimate responsibility for approving program budgets.

Prior to McIntire's hiring, the agency had begun an investigation of one of the programs, the St. Paul Intertribal Housing Board. When McIntire was hired she was informed of the reports that the board had misused agency funds by making unauthorized loans and salary increases and that measures were underway to correct any misappropriations.

Two months into the position McIntire made several public statements which her supervisors viewed as inappropriate. At a tribal meeting she indicated that the state auditor had a conflict of interest in auditing one of the Indian programs. At a public meeting with the Urban Indian Advisory Council, McIntire implied that board members were sophisticated embezzlers. McIntire also contradicted her supervisor at a Housing Finance Agency board meeting.

Six months after McIntire was hired, Haley intercepted an outgoing envelope addressed to "Senate Council" and discovered a nine-page memorandum addressed to him from McIntire. Although the memorandum was dated three days earlier, Haley had not seen it. The memo outlined in detail how expenditures by the board had exceeded their approved budget and stated that McIntire opposed continued funding to the board.

Haley directed McIntire not to distribute the memo. Despite Haley's order and without informing him of her action, McIntire mailed copies of the memo to six individuals outside the agency, including a union representative and members of the Indian community.

Because of McIntire's public statements, but without knowledge of her distributing the memo, the agency withheld certification of McIntire's permanent employment and extended her probationary period. The agency notified McIntire by written memorandum how her conduct should be corrected in order to gain permanent employment.

Haley received calls from members of the Indian community who told him that McIntire's memo had been "widely distributed." The agency concluded that McIntire's actions were insubordinate and that the working relationship had completely broken down and terminated McIntire's employment.

After exhausting grievance procedures under her collective bargaining agreement, McIntire brought this action against the State of Minnesota, the Housing Finance Agency, agency executive director James Solem, agency personnel director Henry Wesley and Haley. ¹

ISSUES

1. Does the qualified immunity doctrine apply to the conduct of individual government officials?

2. Was McIntire deprived of property or liberty without due process of law in violation of the fourteenth amendment?

3. Is there any evidence to support the claims of discrimination?

4. Are there material issues of fact on the remaining state law claims of defamation, breach of contract and discharge in violation of public policy?

ANALYSIS

I. First Amendment Claims

The federal standard of qualified immunity applies in actions under 42 U.S.C. Sec. 1983 brought in Minnesota courts. Finch v. Wemlinger, 310 N.W.2d 66, 70 (Minn.1981). Under this doctrine, government officials are not liable for civil damages if "their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known." Harlow v. Fitzgerald, 457 U.S. at 818, 102 S.Ct. at 2738. McIntire contends that Solem, Wesley and Haley violated her clearly established first amendment rights when McIntire was discharged in 1985. ² This is a question of law, although it obviously turns on factual predicates. McIntire I, 419 N.W.2d at 802.

More than twenty years ago, the Supreme Court ruled that public employees do not abandon their constitutionally protected freedom of speech when they enter the work place. Pickering v. Board of Education, 391 U.S. 563, 568, 88 S.Ct. 1731, 1734, 20 L.Ed.2d 811 (1968). Countering this right, the Court recognized that public employers would lose their ability to function effectively if they could not control employee expression to some degree. To mediate these competing rights Pickering requires the use of a balancing test. Id.

The threshold question on the employee's side of the balance is whether the employee's statements may be "fairly characterized as constituting speech on a matter of public concern." Rankin v. McPherson, 483 U.S. 378, 107 S.Ct. 2891, 2897, 97 L.Ed.2d 315 (1987) (citing Connick v. Myers, 461 U.S. 138, 146, 103 S.Ct. 1684, 1689, 75 L.Ed.2d 708 (1983)). This analysis includes an examination of the content, form and context of the statements. Connick, 461 U.S. at 147-48, 103 S.Ct. at 1690.

McIntire's memorandum addressed the unauthorized, possibly fraudulent, expenditures of public funds and discrepancies in financial records. Irrespective of the accuracy of the statements, the subject matter, breach of public trust, is a matter of public interest. See Roth v. Veteran's Administration, 856 F.2d 1401, 1406 (9th Cir.1988); Czurlanis v. Albanese, 721 F.2d 98, 104 (3d Cir.1983). That a legislative audit raising similar concerns was issued just prior to the distribution of McIntire's memo substantiates the public interest.

We do not overlook that McIntire had a personal stake in drafting the memo and that this motivation detracts from the first amendment implications. See Connick, 461 U.S. at 147-48, 103 S.Ct. at 1690. McIntire had confided to a union official her fears of being held liable for the funding abuses. The official advised her to write a memorandum detailing her disagreements with the agency's position. Although motivation behind a statement may affect the ultimate balance, subject matter is the predominant factor in this threshold analysis. Yoggerst v. Hedges, 739 F.2d 293, 296 (7th Cir.1984). McIntire's statements charged serious improprieties which were a matter of public concern.

Having determined that the employee's speech is of public concern, we turn to the employer's side of the fulcrum. In determining the state's interest, we must consider:

(1) the need for harmony in the office or work place; (2) whether the government's responsibilities require a close working relationship to exist between the plaintiff and co-workers when the speech in question has caused or could cause the relationship to deteriorate; (3) the time, manner, and place of the speech; (4) the context in which the dispute arose; (5) the degree of public interest in the speech; and (6) whether the speech impeded the employee's ability to perform his or her duties.

Lewis v. Harrison School District No. 1, 805 F.2d 310, 315 (8th Cir.1986); cert. denied, 482 U.S. 905, 107 S.Ct. 2481, 96 L.Ed.2d 374 (1987).

We note initially that McIntire's position in the agency was one of high profile. She was an agency spokesperson. Employees with this type of responsibility carry a corresponding duty of caution with respect to the words that they speak. Rankin, 107 S.Ct. at 2900. McIntire's public confrontation with the...