Propst v. Bitzer

• Decision Date: 01 November 1994
• Docket Number: Nos. 93-3825,93-3826,s. 93-3825
• Parties: 95 Ed. Law Rep. 505 Barbara PROPST and Franklin M. Propst, Plaintiffs-Appellants, v. Donald L. BITZER, Morton W. Weir, Judith S. Liebman, and Robert M. Berdahl, Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 148

39 F.3d 148

95 Ed. Law Rep. 505

Barbara PROPST and Franklin M. Propst, Plaintiffs-Appellants, v. Donald L. BITZER, Morton W. Weir, Judith S. Liebman, and Robert M. Berdahl, Defendants-Appellees.

Nos. 93-3825, 93-3826.

United States Court of Appeals Seventh Circuit.

Argued May 13, 1994.

Decided Nov. 1, 1994.

Robert Kirchner (argued), Lerner & Kirchner, Champaign, IL, for plaintiff-appellant.

Edward L. Adelman, John W. Leskera (argued), Dunham, Boman & Leskera, East St. Louis, IL, for Donald L. Bitzer.

James C. Kearns, Bradford J. Peterson, Fred K. Heinrich, Heyl, Royster, Voelker & Allen, Urbana, IL, for Morton W. Weir.

Arnold F. Blockman, Hatch, Blockman, McPheters & Lyke, Champaign, IL, for Judith S. Liebman.

Michael M. Conway (argued), Michael Mishlove, Hopkins & Sutter, Chicago, IL, for Robert M. Berdahl.

Arthur M. Lerner, Robert Kirchner (argued), Lerner & Kirchner, Champaign, IL, for Franklin M. Propst.

Before CUDAHY, KANNE, and ROVNER, Circuit Judges.

ROVNER, Circuit Judge.

Barbara Propst, former Assistant Director of the Computer-based Education and Research Laboratory ("CERL") at the University of Illinois at Urbana-Champaign, ¹ and her husband Franklin M. Propst, former Associate Director of CERL, sued the Laboratory's Director, Donald L. Bitzer, and three university administrators. The Propsts contended that they had been transferred from their positions at CERL in retaliation for exposing Bitzer's misappropriation of university funds, in violation of the First Amendment and state law. The Propsts now appeal several of the District Court's rulings that together resulted in the dismissal of all of their claims, and we affirm.

I.

As Associate Director of CERL, Franklin's responsibilities had been primarily administrative, such as overseeing the Laboratory's finances and negotiating personnel contracts. A physicist by training, Franklin also worked closely with Director Bitzer in setting the Laboratory's research goals. As Assistant Director, Barbara Propst managed the Laboratory's business office. Franklin was Barbara's immediate supervisor, and both Propsts reported to Bitzer. The three university administrators named in the Propsts' suit included Morton W. Weir, who became Chancellor of the University on August 21, 1987 and was the chief administrative officer of the Urbana campus at the time of the Propsts' transfer. Weir coordinated the work of four Vice-Chancellors, including Vice-Chancellor of Research Judith S. Liebman and Vice-Chancellor for Academic Affairs Robert M. Berdahl, who were also named as defendants. Weir, Liebman and Berdahl together comprised a committee that oversaw all university departments and research units and was authorized to make personnel changes in order to ensure effective functioning.

In late 1986 or early 1987, the Propsts began questioning several aspects of CERL's business operations. The Propsts alleged to university officials that Bitzer had diverted university resources to benefit himself and private companies that he controlled, and that he had failed to document various expenditures as required under university regulations. During the same period, Bitzer complained to Liebman about difficulties he was experiencing in working with the Propsts. Bitzer told Liebman that the mistrust between himself and Franklin seemed unremediable, and that he doubted the three could continue working together effectively. In response, Liebman suggested that Bitzer consider removing the Propsts from their positions. In late January or early February 1987, however, Liebman, Berdahl and then-Chancellor Thomas Everhart decided that it would be inadvisable to transfer the Propsts without first investigating their allegations. An informal investigation by Associate Vice-Chancellor Jane Loeb was initiated but then discontinued in favor of a formal audit by the Office of University Audits.

The audit, which relied on interviews of CERL employees and other data from the Laboratory, began in March 1987 and lasted for six months. In an October 27, 1987 letter to Weir, Bitzer complained that the auditors' inquiry into his business practices was highly intrusive and that the auditors were treating him with impertinence. He contended that the investigation was wholly unwarranted and threatened to resign if the disruption caused by the Propsts' allegations was not brought to a rapid conclusion. (Plaintiffs' Ex. 7B.) The auditing department's Assistant Director of Investigations, James E. Moran, also testified that Bitzer had threatened to resign three times during the course of the audit. (Moran Dep. at 159, 190).

After causing considerable disruption at CERL (discussed in detail below), the audit ultimately absolved Bitzer of any wrongdoing. Believing that the Laboratory could not continue to function with the disharmony that had been produced, the administrators removed the Propsts from their posts at CERL in late November 1987. Barbara Propst was assigned to the position of Assistant Dean in the College of Applied Life Sciences, and Franklin Propst was returned to his previous position as a tenured professor of physics. Neither transfer resulted in any loss of compensation or rank, and both Barbara and Franklin received their scheduled salary increases for the 1987-88 academic year.

On November 25, 1987, Franklin sued in federal court under 42 U.S.C. Sec. 1983, alleging that he had been transferred in retaliation for his accusations regarding Bitzer, in violation of the First Amendment. Franklin also alleged that the transfer violated a state law prohibition against retaliatory discharge for exposing misuse of public funds. The district court dismissed his state law claim, and Franklin subsequently filed an amended complaint. The district court denied the defendants' motion for summary judgment based on qualified immunity, and a panel of this court rejected their belated request for leave to file an interlocutory appeal of that decision. Weir v. Propst, 915 F.2d 283 (7th Cir.1990).

On October 27, 1989, Barbara sued in state court, alleging that her removal from CERL violated both the First Amendment and state law. After Barbara's suit was removed to federal court, the defendants moved for dismissal of her state law claim and for summary judgment with respect to her First Amendment claim, again asserting the defense of qualified immunity and relying on the evidence previously developed in Franklin's case. The district court dismissed the state law claims but denied the motion for summary judgment for the same reasons it had articulated in Franklin's case. Upon the timely appeal of that decision this court reversed, finding that Weir, Liebman and Berdahl were entitled to qualified immunity. Elliott v. Thomas, 937 F.2d 338, 346 (7th Cir.1991), cert. denied, --- U.S. ----, ----, 112 S.Ct. 973, 1242, 117 L.Ed.2d 138, 475 (1992) ("Propst I "). ²

The administrators then renewed their motion for summary judgment on the basis of qualified immunity against Franklin, and the district court granted it in light of our decision in Propst I. The Propsts' First Amendment claims against Bitzer were subsequently consolidated, and Bitzer's renewed motion for summary judgment against both Propsts was granted. Franklin now appeals the district court's grant of summary judgment to Weir, Liebman and Berdahl, and both Propsts challenge the court's grant of summary judgment to Bitzer as well as its dismissal of their state law claims.

II.

A. Wier, Liebman and Berdahl

There is very little question that the district court was correct to reverse itself on the administrators' entitlement to qualified immunity in Franklin's case following our decision in Propst I, which addressed precisely the same issue in Barbara's case. The two cases were based on the same record, and depositions taken for Franklin's case had been available in Barbara's case. See 937 F.2d at 346. Indeed, the Propst I court all but formally reviewed the district court's decision in Franklin's case, as the lower court's reasoning in the former case had merely been extended without comment to Barbara's case. See id. at 343.

After Propst I issued, the district court gave Franklin an opportunity to produce new evidence of the type that we had identified as dispositive in that opinion--" 'specific, nonconclusory factual allegations' that the administrative defendants sought to punish [him] on account of speech and disregarded other considerations." (id. at 346 (citation omitted).) In response, Franklin submitted only the deposition of Dillon Mapother, a professor of physics who had acted as a liaison between the Vice-Chancellor of Research and CERL. Mapother testified that in February or March of 1987, he gradually came to believe that Jane Loeb's investigation into the Propsts' allegations had turned into an investigation of the Propsts themselves and was aimed at developing a record that would allow the administration to take action against them. (Mapother Dep. at 53-56.) Mapother did not, however, point to any specific facts or conversations that supported this theory, and he conceded that he could only speculate as to who might have given Loeb this directive. (Id. at 55-56.) In addition, as already noted, Loeb's informal probe was soon discontinued in favor of a formal investigatory audit by the University's auditing department, and Franklin was not transferred from his post until after that audit was concluded.

This testimony was clearly insufficient to save Franklin from the mandate of Propst I. The uncontroverted evidence established that Franklin was transferred only after the defendants had received numerous complaints from CERL employees concerning the destruction of working relationships in the Laboratory, and after the completion of the independent audit that absolved Bitzer of wrongdoing. Franklin has pointed to no evidence suggesting that Loeb's investigation, suspended in early 1987, played any role in...