Vasbinder v. Ambach
| Decision Date | 28 February 1991 |
| Docket Number | 537,Nos. 531,D,s. 531 |
| Citation | 926 F.2d 1333 |
| Parties | Arnold R. VASBINDER, Plaintiff-Appellant, Cross-Appellee, v. Gordon AMBACH, Basil Y. Scott, and Richard M. Switzer, Defendants, Basil Y. Scott and Richard M. Switzer, Defendants-Appellees, Cross-Appellants. ockets 90-7299, 90-7313. |
| Court | U.S. Court of Appeals — Second Circuit |
Jules L. Smith, Rochester, N.Y. (Steven V. Modica, Blitman & King, Rochester, N.Y., on the brief), for plaintiff-appellant-cross-appellee.
Darren O'Connor, Asst. Atty. Gen., Albany, N.Y. , for defendants-appellees-cross-appellants.
Before KEARSE, MAHONEY, and McLAUGHLIN, Circuit Judges.
Plaintiff Arnold R. Vasbinder appeals from so much of a judgment entered in the United States District Court for the Northern District of New York after a jury trial before Thomas J. McAvoy, Judge, as dismissed, notwithstanding the jury's verdict, his claim under 42 U.S.C. Sec. 1983 (1988) seeking punitive damages from defendants Basil Y. Scott and Richard M. Switzer for retaliation against him for exercising his rights under the First Amendment to the Constitution. Scott and Switzer cross-appeal from so much of the judgment as awarded Vasbinder compensatory damages totaling $82,529.49, contending that the district court erred in denying their motions for a directed verdict and judgment notwithstanding the verdict ("n.o.v.") on the ground of qualified immunity or insufficiency of the evidence as to liability. For the reasons below, we affirm so much of
the judgment as awarded Vasbinder compensatory damages; we conclude that the court erred in setting aside the jury's verdict in favor of Vasbinder on the issue of punitive damages; and we remand for further proceedings on the latter issue.
The present controversy arises out of Vasbinder's employment in the New York State Department of Education's Office of Vocational Rehabilitation ("OVR"), and his reporting to the Federal Bureau of Investigation ("FBI") of his suspicions of wrongdoing in a federally funded program overseen by OVR. Scott was the Deputy Commissioner for Vocational Rehabilitation who managed the operations of OVR; Switzer, the Assistant Commissioner, was Vasbinder's immediate supervisor. As set forth in greater detail below, though Vasbinder had previously enjoyed consistently high job performance ratings, immediately following revelation of his contact with the FBI he was given low ratings and was soon demoted. The evidence adduced at trial, viewed in the light most favorable to Vasbinder, showed the following.
Vasbinder had devoted his entire professional career of 20-odd years to improving employment opportunities for handicapped persons. After working for the Buffalo City School District for several years teaching handicapped high school students, he had been hired by OVR in 1969 as a vocational rehabilitation counselor. In this position, Vasbinder counseled the handicapped and helped to place them in productive employment. He was promoted twice over the next ten years. He first became a senior vocational rehabilitation counselor; then in November 1979, he received a provisional appointment as statewide coordinator of placement services ("statewide coordinator"). His appointment as statewide coordinator was made permanent on September 23, 1982. This permanent appointment was subject, under the New York Civil Service Law, to a "flexible probationary period" lasting at least 12, but not more than 52, weeks, see N.Y.Civ.Serv.Law, Rules and Regulations Sec. 4.5(a)(2) (McKinney 1983 & 1991 Supp.); Scott informed Vasbinder that his probation would last only the minimum 12-week period.
Until November 1982, Vasbinder was consistently given high ratings on his performance as statewide coordinator. While noting room for improvement in interpersonal relations, the evaluations by Scott and Switzer rated him "highly effective" and "outstanding." In the evaluation covering the period October 1, 1981, to April 30, 1982, for example, Vasbinder's performance was rated as "outstanding," a rating defined as follows:
The employee's performance is clearly exceptional in comparison with performance standards specified in the performance program. The performance consistently exceeds the requirements for all the tasks, assignments or activities and the objectives which were to be accomplished during the evaluation period. The employee can be relied upon to perform the most difficult assignments and has made exceptional contributions to the work of the unit.
During Vasbinder's tenure as provisional and permanent statewide coordinator, the number of OVR clients placed in employment increased significantly. Thus, the 1982-83 Annual Report of the Educational Department stated that in 1982, OVR placed 10,252 disabled persons in gainful employment, an increase of 12.5 percent over the previous year's total. These gains were made in the face of cutbacks in staffing and a nationwide trend of decreasing placements. The report also noted that "[t]he three-year trend shows a steady improvement" in successful placements. That three-year period had begun soon after Vasbinder's provisional appointment as statewide coordinator.
On May 24-25, 1982, Vasbinder represented OVR in a joint state-and-federal review of a grant given by a federally funded Vasbinder immediately showed his findings to OVR's downstate regional director Mary Brady, in whose territory ICD was located. Brady, a grade 32 employee (several grades higher than Vasbinder) who also reported to Switzer, instantly recognized the apparent improprieties. However, no corrective action was forthcoming.
program called Projects with Industry ("Project"). The review was conducted to audit the use of Project moneys given to the International Center for the Disabled ("ICD"), a rehabilitation facility that accepted client referrals from OVR. In the course of this review, Vasbinder discovered several practices that appeared to him to be improper, if not unlawful. It appeared that there were overcharges and duplicative billing and that an effort had been made to code the billing in a way that would mask the improprieties. In particular, Vasbinder testified that in many of the files he examined, there appeared three vouchers for placement of one individual; in addition, the amount of each voucher, $900 +, was higher than OVR would usually pay; and though the vouchers were coded as requests for reimbursement for training rather than for placement, one of the recipient organizations was not devoted to training the handicapped but was merely an employment agency. Vasbinder was also aware that both the founder and the director of that employment agency had long-time personal relationships with Switzer; he had heard Switzer refer to one of them frequently as his "protege."
Vasbinder was aware that some years earlier, the FBI and other law enforcement entities had investigated a kickback scheme involving OVR, resulting in the conviction and imprisonment of an OVR employee and at least one private vendor. He was also aware that another OVR employee had been disciplined for reporting improprieties at ICD. As a result, Vasbinder feared that he had "walked into a hornets' nest and that [he] was going to get stung." He testified:
I was concerned that I would be in trouble for reporting a problem of moneys that involved the bosses' [sic ] friends. I was concerned that I would be reporting a problem regarding a politically powerful rehabilitation facility. I knew that another OVR employee had been transferred after raising concerns about fee payments at ICD for other things other than placement.
Accordingly, both fearful of being personally implicated in a coverup of the apparent improprieties and concerned that his supervisors might be involved in the wrongdoing because of a relationship with the private facilities involved, in August 1982 Vasbinder contacted the FBI. The FBI thereupon commenced an investigation.
In late October 1982, one of the FBI agents assigned to the investigation instructed Vasbinder to inform Scott of the possible improprieties Vasbinder had discovered during the ICD audit. Vasbinder did so and disclosed that he had reported his discoveries to the FBI. Following this meeting, Scott ordered an OVR audit of the Project program. The OVR auditor discovered other problems with respect to rates charged and services rendered by private facilities, and these discoveries resulted in OVR's changing some of its procedures and requesting credits from several such facilities. The audit did not turn up problems of the sort found by Vasbinder; according to Vasbinder, however, the auditor failed to look at certain files, called to the auditor's attention, that would have disclosed these problems.
After Vasbinder informed Scott in late October 1982 that he had spoken to the FBI, his evaluations by Scott and Switzer deteriorated dramatically. Though all of their prior ratings of Vasbinder's job performance had been very high (the then-most recent evaluation rated his performance "exceptional," "consistently exceed[ing] the requirements for all ... tasks," making "exceptional contributions"), and though they had just promoted him to permanent statewide coordinator in September, their review dated November 22, 1982, rated his job performance as barely effective.
In December 1982, Scott and Switzer stripped Vasbinder of his duties with respect to the placement plans for the various OVR district offices, i.e., his most significant duties as statewide coordinator. In January 1983, Switzer extended...
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