Onderik v. Morgan

• Citation: 897 F.2d 204
• Decision Date: 10 October 1989
• Docket Number: 88-2000,Nos. 88-1904,s. 88-1904
• Parties: Ernest ONDERIK, et al., Plaintiffs-Appellants, v. Joe P. MORGAN, et al., Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

Page 204

897 F.2d 204

Ernest ONDERIK, et al., Plaintiffs-Appellants, v. Joe P. MORGAN, et al., Defendants-Appellees.

Nos. 88-1904, 88-2000.

United States Court of Appeals, Sixth Circuit.

Argued Aug. 17, 1989.

Decided Oct. 10, 1989.

Charles Gottlieb, Joan Odorowski, Thomas R. Eckhardt (argued), Gottlieb & Goren, Detroit, Mich., for plaintiffs-appellants.

Karl R. Overman, Asst. U.S. Atty. (argued), Detroit, Mich., for defendants-appellees.

Before KEITH and MARTIN, Circuit Judges, and GIBBONS, District Judge. ^*

KEITH, Circuit Judge.

Plaintiffs Ernest Onderik ("Onderik") and Dale Richardson ("Richardson"), former employees of defense contractor AM General, brought this wrongful discharge action against defendants General Joe P. Morgan ("General Morgan"), Karl Kabeiseman ("Kabeiseman"), William H. Carroll ("Carroll"), and Frederick J. Condon ("Condon"), all officials of the Defense Logistics Agency ("DLA"). ¹ Plaintiffs complained that defendants caused them to be terminated, without notice or hearing, from their employment with AM General, and thus, violated their rights to due process. Finding venue improper and personal jurisdiction lacking, the district court dismissed defendants Carroll and Kabeiseman. After finding proper venue and personal jurisdiction with respect to defendants Condon and General Morgan, the district court also dismissed them, invoking the doctrine of qualified immunity. For the following reasons, we AFFIRM.

I.

A.

Onderik was previously employed as a Quality Assurance Specialist by the DLA. On May 22, 1984, in the United States District Court for the Eastern District of Michigan, Onderik pled guilty to the federal criminal charge of receipt and acceptance of gratuities by a public official. See United States v. Onderik, No. 84-2051, slip op. (E.D.Mich. May 22, 1984); 18 U.S.C. Sec. 201(g) (Public officials convicted of bribery "shall be fined not more than $10,000 or imprisoned for not more than two years, or both."). Due to Onderik's conviction for acceptance of gratuities from defense contractors, the DLA initiated debarment proceedings against him. The debarment was signed on August 27, 1984 by defendant Kabeiseman, DLA General Counsel:

[B]ased on the administrative record and the findings herein, Ernest Onderik is hereby debarred effective this date and continuing through 20 June 1987. The debarment is effective throughout the executive branch of the Government unless the head of the agency taking the procurement action or a designee states in writing the compelling reason for continued business dealings between the agency and Mr. Onderik.

Joint Appendix at 13 (quoting Memorandum of Decision on the Proposed Debarment of Ernest Onderik, Defense Logistics Agency (Aug. 27, 1984)).

After his debarment and the termination of his employment at DLA, Onderik was hired to be a Supplier Quality Assurance Specialist by AM General, a division of LTV Corporation ("LTV"), at its South Bend, Indiana facility. Because AM General deals almost exclusively in defense contracts, Onderik's job duties at AM General were much like the duties he performed at DLA. Richardson, an AM General Line Supervisor, was a strong advocate for Onderik during the hiring process. James Armour, the AM General Corporate Director of Quality Assurance, approved the hiring of Onderik only after receiving assurances from Richardson that Onderik's debarment arose from a single offense pertaining to $50 placed in a Christmas card.

In October, 1985, AM General, LTV, and DLA representatives attended a meeting, held in a Detroit, Michigan hotel by the Tank Automatic Command ("TACOM"), to discuss a military vehicle project known as the HMMV ("Hummer"). At lunch, General Morgan, the DLA Executive Director of Quality Assurance, informed an LTV representative that because AM General had hired a previously debarred, former DLA employee, DLA was preparing to initiate debarment actions against AM General. After lunch, General Morgan was approached by Zembrzuski, an LTV Vice President, who apologetically explained that he was previously unaware of AM General's hiring of the debarred individual. Zembrzuski thanked General Morgan for bringing the problem to his attention and promised to resolve it.

After the TACOM meeting, Zembrzuski questioned Armour to verify the truth of General Morgan's statement that a debarred individual had been hired by AM General. After Armour admitted that he had hired Onderik, Zembrzuski strongly suggested that Armour had exercised poor judgment in making that decision. After Richardson showed Armour a document indicating that Onderik, as a DLA employee, had accepted gratuities on four occasions, Armour terminated Onderik's employment with AM General on October 22, 1985. In an effort to resolve the Onderik matter, Richardson telephoned several DLA attorneys and officials in Detroit, Michigan; Cleveland, Ohio; Arlington, Virginia; and Washington, D.C. Because Richardson had grossly overstepped his bounds as an AM General Line Supervisor by making these unauthorized contacts with DLA personnel, Armour terminated Richardson on October 23, 1985.

B.

Plaintiffs filed a complaint against the DLA on February 5, 1987. After finding that sovereign immunity bars suits for damages against the United States arising directly from constitutional violations, the district court entered an order dismissing plaintiffs' complaint against the DLA on April 6, 1988. Plaintiffs then filed, on April 22, 1988, an amended complaint against individual defendants General Morgan, Kabeiseman, Carroll, and Condon. Plaintiffs alleged that defendants violated their rights to due process because plaintiffs' wrongful discharge--without notice, cause, hearing or proper investigation--resulted from defendants' pressure and threats of debarment against AM General.

On May 13, 1988, defendants moved to dismiss plaintiffs' amended complaint. On July 26, 1988, the district court entered an order dismissing plaintiffs' amended complaint, finding: first, that personal jurisdiction and venue in the Eastern District of Michigan were proper as to defendants Condon and General Morgan; second, that personal jurisdiction and venue were improper as to defendants Carroll and Kabeiseman; and third, that defendants Condon and General Morgan were protected by the doctrine of qualified immunity.

Plaintiffs filed a notice of appeal on August 24, 1988. Plaintiffs did not, however, appeal the dismissal of defendants Kabeiseman and Carroll. On September 26, 1988, defendants Condon and General Morgan filed a cross appeal, alleging that the district court erred by not dismissing them for lack of personal jurisdiction and improper venue.

II.

A.

In their cross appeal, defendants argue that the district court erred in finding venue proper in the Eastern District of Michigan. We disagree. Given that plaintiffs' claim arose in the Eastern District of Michigan and that the weight of defendants' contacts were made in that forum, the district court made a proper finding of venue.

Venue is proper in the judicial district "in which the claim arose." 28 U.S.C. Sec. 1391(b). More specifically, venue is appropriate in "any district in which a substantial part of the acts, events or omissions occurred that gave rise to the claim for relief." Sutain v. Shapiro and Lieberman, 678 F.2d 115, 117 (9th Cir.1982) (citations omitted). In Leroy v. Great Western United Corp., 443 U.S. 173, 99 S.Ct. 2710, 61 L.Ed.2d 464 (1979), the Supreme Court posited a "weight of the contacts" test to determine the propriety of a finding of venue:

[A] plaintiff may choose between those two (or conceivably even more) districts that with approximately equal plausibility--in terms of the availability of witnesses, the accessibility of other relevant evidence, and the convenience of the defendant (but not of the plaintiff)--may be assigned as the locus of the claim.

Leroy, 443 U.S. at 185, 99 S.Ct. at 2717.

The unique facts of the present case clearly indicate that plaintiffs' claim arose in the Eastern District of Michigan. Plaintiffs argue that their employment with AM General was terminated due to General Morgan's discussions with LTV officials at the TACOM meeting in Detroit, Michigan. Plaintiffs' allegation is supported by AM General Vice President Zembrzuski's October 22, 1985, letter to General Morgan. Writing from his office in Livonia, Michigan, Zembrzuski stated that AM General had taken "prompt action" to resolve the personnel problem. Zembrzuski's "prompt action" was to initiate the termination of both Onderik and Richardson, who were employed by the AM General Division of LTV, in Detroit, Michigan. In addition, defendant Condon, DLA's counsel in Cleveland, Ohio, had been previously notified of Onderik's employment with AM General by Michael O'Meara, Chief of Quality for Defense Contract Administration Services. O'Meara also works in Detroit, Michigan. Because Condon received several documents discussing Onderik from O'Meara, the facts justified a rejection of defendants' improper venue argument with respect to Condon and General Morgan. Thus, because plaintiffs' claim arose in the forum and the weight of defendants' contacts were made in the forum, we are persuaded that the district court properly found venue in the Eastern District of Michigan.

B.

In their cross appeal, defendants also argue that the district court erred by exercising personal jurisdiction over them. We disagree. The order of the district court was clearly justified by the conduct of the defendants and their connection with the forum state of Michigan.

Where plaintiffs bring an action pursuant to a federal law that does not provide for service of process, service on nonresident defendants is governed by the state statute. See Handley v. Indiana & Michigan Electric Co., 732 F.2d 1265, 1268 (6th Cir.1984). In Michigan, defendants are subject to personal jurisdiction if they: first, conduct "any business within the...