Reich v. Beharry

• Decision Date: 02 December 1988
• Docket Number: No. 88-3469,88-3469
• Parties: Samuel J. REICH, Appellant, v. Patricia BEHARRY, an individual and The County of Washington. . Submitted Pursuant to Third Circuit Rule 12(6)
• Court: U.S. Court of Appeals — Third Circuit

Page 239

883 F.2d 239

Samuel J. REICH, Appellant, v. Patricia BEHARRY, an individual and The County of Washington.

No. 88-3469.

United States Court of Appeals, Third Circuit.

Submitted Pursuant to Third Circuit

Rule 12(6)

Dec. 2, 1988.

Decided Aug. 24, 1989.

Rehearing and Rehearing In Banc Denied Oct. 2, 1989.

Deborah S. Miskovich, Hess, Reich, Georgiades, Wile & Homyak, P.C., Pittsburgh, Pa., for appellant.

Robert F. Wagner and Christine A. Ward, Dickie, McCamey & Chilcote, Pittsburgh, Pa., for appellee.

Before SEITZ ^*, STAPLETON and COWEN, Circuit Judges.

OPINION OF THE COURT

STAPLETON, Circuit Judge:

Samuel J. Reich, a lawyer, was hired by the county of Washington as a special prosecutor to investigate and prosecute the county's controller, Patricia Beharry. Reich performed his assigned task, although Beharry was acquitted. He then submitted bills for payment to the county, but the subject of his investigation proved an obstacle to his compensation: To be paid, Reich had to obtain the controller's approval, an approval Beharry has refused to grant.

Reich brought an action in the United States District Court for the Western District of Pennsylvania, claiming that Beharry and the county had deprived him of property without due process of law in violation of the procedural and substantive components of the fourteenth amendment's due process clause and 42 U.S.C. Sec. 1983. Reich also appended state law claims for breach of contract and unjust enrichment against the county.

The county filed an answer, admitting most of Reich's allegations, but Beharry filed a motion to dismiss for failure to state a claim under Fed.R.Civ.P. 12(b)(6). The district court granted that motion and dismissed all of Reich's claims against both parties, 686 F.Supp. 533. ¹ We will affirm.

I.

We accept as true all of the complaint's factual allegations and all reasonable inferences that can be drawn from them. We must refrain from affirming the dismissal unless we are convinced that no relief could be granted under any provable set of facts. Ransom v. Marrazzo, 848 F.2d 398, 401 (3d Cir.1988).

On April 10, 1986, Reich entered into a written agreement with the county providing for his appointment as a special prosecutor. The agreement provided that Reich would be paid by the hour and that he was to be considered "an independent contractor for all purposes." App. at 16. Further, the agreement could be terminated "at any time by either party." App. at 14. No provision for the timing of Reich's payment was included in the agreement.

At the time this agreement was entered the county's rules governing contract payment procedures provided in part as follows:

Subject to the power and duty of the county commissioners to manage and administer the fiscal affairs of the county, the controller shall supervise the fiscal affairs of the county including the accounts ... of all officers and other persons who shall ... receive ... the public moneys of the county. The discretionary powers of the controller shall not be applicable to the management of the fiscal policies of the county commissioners, ... but the controller shall refuse to authorize any fiscal transaction which is, by law, subject to his supervision or control where it appears that such transaction is not authorized by law, or has not been undertaken according to law, or has not received approval according to law....

16 P.S.A. Sec. 1702(a) (emphasis supplied).

* * *

* * *

If the controller does not approve a claim, bill or demand presented to him, he shall within thirty days forward it to the county commissioners together with his notice that he has refused to approve the same and his reasons therefor. The county commissioners shall consider the claim, bill or demand and, if they consider that it should be paid by the county, they shall so notify the controller. If the controller thereafter continues to refuse his approval no payment shall be made thereon by the county except pursuant to an order of court upon proper issue thereto directing the controller to approve payment.

16 P.S.A. Sec. 1752 (emphasis supplied).

The county filed an Order of Appointment on April 10, and on the same day Reich was directed to investigate and prosecute Beharry for violations of the Pennsylvania Campaign Expense Reporting Act and the Public Officials Ethics Act.

Reich submitted bills to the county on May 12, July 3, August 12, and September 9, 1986, all of which were approved by the county and forwarded to Beharry for payment. Beharry refused to approve payment for any of the bills.

In December 1986, the County informed Reich that it would assist him in obtaining payment by having the County Salary Board confirm his position. The Salary Board met on December 29, and all members of the board--with the exception of Beharry--approved Reich's appointment as special prosecutor. At the board meeting, Beharry stated that she would not pay Reich, referring to him as a "hired gun." Reich again submitted his bills for payment; again he was rebuffed by Beharry.

Reich filed a complaint in federal court, with federal jurisdiction premised on 28 U.S.C. Sec. 1343. Reich claimed that "[t]he unilateral and deliberate decision of ... Beharry to utilize her official position as Controller" to refuse to pay him "constituted a denial of both procedural and substantive due process of the law in violation of the Fourteenth Amendment." Complaint p 37. Reich further alleged that Beharry's decision was "irrational," Complaint p 39, and motivated by her "personal animosity toward [Reich] for having prosecuted her and a lack of impartiality towards [Reich] and as such constituted a denial of substantive due process...." Complaint p 38.

Reich also asserted that "[n]either ... [the] County nor ... Beharry provided [him] with any reasonable remedies adequate to meet the due process requirements of the Constitution and thereby rectify the legal error created by ... Beharry." Complaint p 47. His state-law claims against the county consisted of one count of breach of contract and one count claiming that "[a]s a result of [Reich's] services rendered to [the] County, [the] County has become unjustly enriched at [Reich's] expense." Complaint p 55.

In granting Beharry's 12(b)(6) motion, the district court found the case to be governed by Parratt v. Taylor, 451 U.S. 527, 101 S.Ct. 1908, 68 L.Ed.2d 420 (1981). Without discussing whether Beharry's act was "random and unauthorized," Parratt, 451 U.S. at 541, 101 S.Ct. at 1916, or whether Reich had a property interest implicating the due process clause, the district court assumed that Parratt's inquiry into the adequacy of state remedies was germane. The district judge found that, under Pennsylvania law, Reich's causes of action for breach of contract and unjust enrichment against the county provided him with "clearly adequate post-deprivation remedies." App. at 66A. Moreover, the district court concluded that a mandamus action was available to Reich for compelling Beharry to approve payment. The district court dismissed Reich's claims against both the county and Beharry, but without explanation the court stated that if the state court concluded that mandamus was not available as to Beharry, Reich could petition to reopen his claim against Beharry.

II. PROCEDURAL DUE PROCESS

It is not contested that Beharry and the county were acting under color of state law. Hence, the remaining Sec. 1983 issue is whether Reich was deprived of a constitutional right.

We read Reich's complaint and his briefs on appeal as arguing both that he should have been afforded a predeprivation hearing (that is, a hearing prior to Beharry's decision denying him payment) and that, even if he was only entitled to a postdeprivation hearing, the state law remedies afforded him are constitutionally inadequate.

A. Postdeprivation Process

As we have noted, Reich asserts that there is no state postdeprivation process available to him for "rectify[ing] the legal error created by defendant Beharry." As we read his brief, however, the only argument he makes in support of this contention is that a mandamus action may not be available to compel Beharry to approve the submitted vouchers. We assume, without deciding, that this remedy is not available to Reich. He concedes that he has a state cause of action for breach of contract and that concession is a full and sufficient answer to his complaint about inadequate postdeprivation process. If Reich's contract gives him a property interest protectible by procedural due process and if he is not entitled to predeprivation process, we perceive, and Reich suggests, no reason why he will not receive constitutionally adequate process to protect that property interest when he asserts his breach of contract claim in the state courts.

B. Predeprivation Process

Reich's principal procedural due process claim is that he was entitled to a hearing before Beharry decided what position to take in response to his submission of invoices. This claim poses two issues: (1) Whether Reich has a property interest that triggers the protection of procedural due process, and (2) if so, whether the "process due" requires a predeprivation hearing.

So far as we have been able to determine, every court of appeals that has directly confronted the issue has concluded that although state contract law can give rise to a property interest protectible by procedural due process, not every interest held by virtue of a contract implicates such process. E.g., Physicians' Serv. Med. Group v. San Bernardino Cty., 825 F.2d 1404, 1408 (9th Cir.1987); Bleeker v. Dukakis, 665 F.2d 401, 403 (1st Cir.1981); Yatvin v. Madison Metropolitan School Dist., 840 F.2d 412, 416 (7th Cir.1988); Boucvalt v. Board of Commissioners of Hosp. Service Dist., 798 F.2d 722, 730 (5th Cir.1986); S & D Maintenance Co., Inc. v. Goldin, 844 F.2d 962, 966 (2d Cir.1988). Many of these courts have observed that if every breach of...