Merrell v. Bay County Metropolitan Transp. Auth.

• Decision Date: 15 February 1989
• Docket Number: No. 87-CV-40124-FL.,87-CV-40124-FL.
• Parties: Herb MERRELL, Plaintiff, v. BAY COUNTY METROPOLITAN TRANSPORTATION AUTHORITY and Michael Stoner, Defendants.
• Court: U.S. District Court — Western District of Michigan

707 F. Supp. 289

Herb MERRELL, Plaintiff, v. BAY COUNTY METROPOLITAN TRANSPORTATION AUTHORITY and Michael Stoner, Defendants.

No. 87-CV-40124-FL.

United States District Court, E.D. Michigan, S.D.

February 15, 1989.

Glen Lenhoff, Flint, Mich., for plaintiff.

James S. Miner, II, Bay City, Mich., for defendants.

MEMORANDUM OPINION

CHURCHILL, District Judge.

This case, which involves a procedural due process claim, requires the Court to determine whether a public employee can assert a property interest in his job based upon a Toussaint contract. See Toussaint v. Blue Cross & Blue Shield of Michigan, 408 Mich. 579, 292 N.W.2d 880 (1980). Because the Court finds that Plaintiff Merrell can claim a property interest in his job based on his Toussaint contract, the Court must also decide whether Merrell is entitled to partial summary judgment concerning liability on his procedural due process claim. Finally, the Court must consider whether Defendant Michael Stoner is entitled to qualified immunity due to the unsettled nature of Toussaint law as it applies to procedural due process claims.

I. The Factual Setting

To a large extent, the facts supporting Plaintiff Herb Merrell's procedural due process claim are not in dispute. On September 9, 1985, Defendant Bay County Metropolitan Transportation Authority ("Bay Metro") hired Plaintiff Merrell. See, e.g., Complaint & Answer, ¶ 8. During Merrell's tenure as a Bay Metro employee, the parties agree that Bay Metro had the necessary state nexus to support a 42 U.S. C. § 1983 action.¹See generally Adams v. Vandemark, 855 F.2d 312 (6th Cir.1988). Further, neither side disputes the facts that Plaintiff Merrell did not have a written employment contract, yet he did receive assurances of job security sufficient to create a Toussaint contract. Compare Walker v. Consumers Power Co., 824 F.2d 499, 503 (6th Cir.1987) (Toussaint contract may be based on assurance that "as long as I performed adequately ... I would not be fired.") with Plaintiff's Brief, Exhibit 9 (Bay Metro's Michigan Employment Security Commission statement that Merrell's "employment was expected to last indefinitely provided, however, that Mr. Merrell could do the work efficiently and effectively."). Thus, Plaintiff Merrell asserts that his tenure as a Bay Metro employee was governed by a Toussaint contract "just cause" limitation regarding discharge. See Toussaint, 408 Mich. at 618-19, 292 N.W. 2d 880.

The parties also agree that Plaintiff Merrell, in his capacity as manager of Bay Metro's transportation-operations department, was charged with the responsibility of supervising Bay Metro's bus drivers. In December of 1985, after Plaintiff Merrell had served as a Bay Metro employee for four months, he proposed a plan to restructure "the washing, fueling, and parking of the buses" at Bay Metro. See, e.g., Plaintiff's Brief, Exhibit 4 (page 56 of Defendant Stoner's deposition). When this plan was implemented on January 7, 1986, the results were less than impressive. Merrell attempted to fire drivers who refused to remain on their buses because they had to use the washroom facilities, the bus line blocked a gate to a Chevrolet plant causing traffic congestion, and the police eventually were called to the scene. See, e.g., Defendant Bay Metro's Answer to Interrogatory 25; see also Plaintiff's Brief, Exhibit 4 (pages 56-62 of Defendant Stoner's deposition). Responding to complaints from bus drivers and a member of the Bay Metro supervisory board, see Plaintiff's Brief, Exhibit 4 (page 60 of Stoner deposition), and based upon his own personal observation of the events that occurred on January 7, 1986, Bay Metro General Manager Michael Stoner conducted a meeting with some of the Bay Metro employees to ascertain precisely what transpired during the January 7 "safety lane incident." Defendant Stoner then met with Plaintiff Merrell on January 13, 1986 for a protracted discussion of the "safety lane incident" and Plaintiff Merrell's allegedly dictatorial style of management. At the conclusion of the face-to-face meeting between Plaintiff Merrell and Defendant Stoner on January 13, 1986, Defendant Stoner apparently decided to give Merrell a second chance. See, e.g., Plaintiff's Brief, Exhibit 13 (Stoner memo summarizing "safety lane incident" and subsequent meeting of January 13, 1986).

After the January 13, 1986 meeting, Plaintiff Merrell continued in his capacity as operations manager without event through January 28, 1986. On January 29, 1986, Plaintiff Merrell left his position to go on sick leave. Merrell remained on sick leave until February 28, 1986; he called Bay Metro on February 28 to inform his employer that he intended to return to his job on March 3, 1986. Later that day, Defendant Stoner discharged Merrell as of March 3, 1986 and memorialized his decision in a letter to Plaintiff Merrell. See Plaintiff's Brief, Exhibit 16. Both Merrell and the defendants agree, therefore, that no meeting occurred after the January 13, 1986 tête-a-tête at which Stoner offered Merrell the opportunity to atone for the "safety lane incident."

Based on the undisputed lack of a meeting between January 13, 1986 and the discharge in early March of 1986, Plaintiff Merrell has requested summary judgment on liability concerning his procedural due process claim. In Merrell's view, he received no pretermination hearing despite the clear mandate of Cleveland Bd. of Education v. Loudermill, 470 U.S. 532, 105 S.Ct. 1487, 84 L.Ed.2d 494 (1985), that public employees must be accorded certain specific pretermination process. Plaintiff Merrell's right to the process outlined in Loudermill, however, depends upon his possession of "a property right in continued employment." Loudermill, 470 U.S. at 538, 105 S.Ct. at 1491 (footnote and citations omitted); accord Cremeans v. City of Roseville, 861 F.2d 878, 880 (6th Cir.1988) (quoting Loudermill). Thus, the Court's initial inquiry must focus on whether Merrell, a public employee in Michigan, can assert a property interest in his job based on a Toussaint contract. See Matulin v. Village of Lodi, 862 F.2d 609, 615 (6th Cir.1988).

II. Toussaint as a Basis for a Property Right in Public Employment

Plaintiff Merrell's property right in his Bay Metro job hinges on the contours of a Toussaint implied contract for employment under Michigan law. See Toussaint, 408 Mich. 579, 292 N.W.2d 880. In Toussaint, the Michigan Supreme Court held that "the right to continued employment absent cause for termination may, thus, because of stated employer policies and established procedures, be enforceable in contract." Id. at 618-19, 292 N.W.2d 880. Since the Michigan Supreme Court handed down Toussaint, however, it has offered few opinions illuminating the parameters of the doctrine that it approved in Toussaint. Cf. Boynton v. TRW, Inc., 858 F.2d 1178, 1180 (6th Cir.1988) (en banc); see also id. at 1188 (Lively, J., concurring) ("I believe that it is essential for the Michigan Supreme Court to clarify this body of law."). Because of the peculiarly hybrid nature of procedural due process claims, the Court must examine two somewhat unsettled areas of state Toussaint law to determine whether Plaintiff Merrell can assert a constitutionally protected interest in his job. See Board of Regents v. Roth, 408 U.S. 564, 577, 92 S.Ct. 2701, 2709, 33 L.Ed. 2d 548 (1972) ("Property interests, of course, are not created by the Constitution. Rather, they are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law."); accord Cremeans, 861 F.2d at 880-81; Matulin, 862 F.2d at 615. First, the Court must consider whether a public employee can ever assert a right to a Toussaint contract. Second, the Court must evaluate the power, if any, of an employer to unilaterally alter or abrogate a Toussaint contract. Neither of these issues has been directly addressed by the Michigan Supreme Court, so the Court must look to Michigan Court of Appeals decisions in an effort to anticipate the Michigan Supreme Court's positions on these two pivotal questions of state law.²See Bailey v. V & O Press Co., Inc., 770 F.2d 601, 604 (6th Cir.1985).

A. Toussaint in the Public Sector

Plaintiff Merrell undoubtedly had no property interest in his Bay Metro job if he had no Toussaint contract. As a public sector employee, Merrell cannot simply assume the application of a Toussaint contract even though Bay Metro offered him unequivocal assurances of job security. In 1984, the Michigan Court of Appeals observed that "no case has yet established that Toussaint applies to public employees." Engquist v. Livingston County, 139 Mich.App. 280, 284 n. 1, 361 N.W.2d 794 (1984). During the following year, another panel of the state appellate court implicitly held that a public employee can acquire the protection of a Toussaint implied contract. See Rasch v. City of East Jordan, 141 Mich.App. 336, 367 N.W.2d 856 (1985). The Rasch holding concerning Toussaint's public sector application is only implicit, however, because the Rasch court merely evaluated jury instructions without acknowledging that it was breaking new ground. Indeed, the Sixth Circuit characterized the public sector role of Toussaint as unsettled more than a year after Rasch. See Averitt v. Cloon, 796 F.2d 195, 200 n. 2 (6th Cir.1986). Precedent, therefore, provides no clear answer to the question of Toussaint's application in the public sector. See, e.g., Matulewicz v. Governor, 174 Mich.App. 295, 304, 435 N.W.2d 785 (1989) (conceptualizing Toussaint as private sector analogue to procedural due process, but failing to recognize that no property right exists absent public sector application of Toussaint concept).

The most logical place to examine the scope of Toussaint, namely the text of the opinion itself, offers the most logical explanation of Toussaint's reach. The genesis of the implied contract, as the Michigan Supreme...