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S t a t e s C our t of Appe al s for the Thir d C ir c uit

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# F ult z v . Dunn

P r e c e de n t i al or N on-P r e c e de n t i al :

D ock e t 97-7378

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### R e c omme nde d C it a t ion

" F ultz v . Dunn " (1998). 1998 D e cisio n s

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. e du/thir dc ir c uit_1998/281Filed December 21, 1998

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

Nos. 97-7378 and 97-7503

KENNETH W. FULTZ

v.

JOHN S. DUNN, JR.; DENNIS L. FARLEY; DEPARTMENT OF ENVIRONMENTAL RESOURCES,
COMMONWEALTH OF PENNSYLVANIA; JAMES M. SEIF

John S. Dunn, Jr.; Dennis L. Farley,

Appellants in No. 97-7378

KENNETH W. FULTZ

Appellant in No. 97-7503

v.

JOHN S. DUNN, JR.; DENNIS FARLEY; DEPARTMENT OF ENVIRONMENTAL RESOURCES, COMMONWEALTH OF PENNSYLVANIA; JAMES M. SEIF

On Appeal from the United States District Court for the Middle District of Pennsylvania (D.C. Civ. No. 94-01914)

Argued November 19, 1998

BEFORE: GREENBERG, ALITO, and GODBOLD,* Circuit Judges

___________________________________________________ ______________

*Honorable John C. Godbold, Senior Judge of the Uni ted States Court of Appeals for the Eleventh Circuit, sitting by design ation.(Filed: December 21, 1998)

D. Michael Fisher Attorney General John G. Knorr, III (argued) Chief Deputy Attorney General Chief, Appellate Litigation
Section
Calvin R. Koons Senior Deputy Attorney General Gwendolyn T. Mosley Senior Deputy Attorney General 15th Floor, Strawberry Square Harrisburg, PA 17120

Attorneys for John S. Dunn and Dennis L. Farley

Cletus P. Lyman (argued)
Michael S. Fettner Lyman & Ash
1612 Latimer Street Philadelphia, PA 19103

Attorneys for Kenneth W. Fultz

OPINION OF THE COURT

GREENBERG, Circuit Judge.

I. INTRODUCTION

Appellants John S. Dunn, Jr. and Dennis Farley, off icers of the Pennsylvania Department of Conservation and Natural Resources, appeal from a final judgment ent ered on a jury verdict against them in favor of appellee Ke nneth W. Fultz, a Department employee. Fultz asserted a Firs t
Amendment retaliation claim in this action under 42 U.S.C. S 1983, the alleged retaliation being in response t o his conduct in having brought an action entitled Fultz v. Davis, D.C. Civ. No. 90-00779 ("Davis"), in the United Sta tes District Court for the Middle District of Pennsylva nia. In

2Davis, Fultz successfully challenged his dismissal in 1988

by the Department of Environmental Resources, the predecessor to the Department of Conservation and N atural Resources. As a matter of convenience, we refer to both Departments interchangeably as Department. In parti cular, in this case Fultz charged that upon his reemployme nt, as a result of Davis Dunn, the Department's Chief of E mployee Relations and Training, deprived him of his seniori ty, thus causing him to lose a later promotion to a position as Park Operations Manager I. Fultz asserted that Dunn took this action on behalf of himself and Farley, the Directo r of the Department's Bureau of Personnel, and thus we do no t differentiate between the appellants in this opinio n. The appellants denied that Dunn acted to retaliate agai nst Fultz, and at and after the trial unsuccessfully so ught a judgment as a matter of law pursuant to Fed. R. Civ . P. 50(b).

On this appeal the appellants assert that they are entitled to a judgment as a matter of law, or, alte rnatively, to a new trial pursuant to Fed. R. Civ. P. 59. Inas much as Dunn reemployed Fultz in accordance with a civil se rvice
rule which afforded him no discretion to make a dec ision that would have preserved Fultz's seniority, we hol d that, as a matter of law, Dunn, and thus Farley, did not retaliate against Fultz. Consequently, we will reverse the ju dgment of the district court as well as all orders and jud gments granting Fultz monetary damages or equitable relief and
will remand the case to the district court to vacat e all such orders and judgments. Moreover, the district court on the remand should enter a judgment as a matter of law i n favor of Dunn and Farley. Our disposition of the appeal m akes it unnecessary for us to consider the appellants' requ est for a
new trial.

Fultz appeals from orders which stayed execution on the judgment without requiring the appellants to post a supersedeas bond, and which deferred an award of attorney's fees pending disposition of the appellan ts' appeal. We have consolidated the two appeals. In vi ew of our disposition of the appellants' appeal, we will dismiss Fultz's appeal, which clearly is moot as he no long er has a judgment in his favor and cannot recover attorney's fees

3under 42 U.S.C. S 1988, as he is not a prevailing p arty. See

U.S. Bancorp Mortgage Co. v. Bonner Mall Partnershi p, 513 U.S. 18, 21, 115 S.Ct. 386, 389 (1994).

II. BACKGROUND

A. Factual History

In 1988, the Department fired Fultz from his positi on as a state park manager after 24 years of employment, in part for running a boat storage business without the Department's knowledge. In various fora, Fultz argu ed that the Department fired him without procedural due pro cess and, in 1990, he filed the Davis action in the dist rict court against the Department and two of its officials, ot her than Dunn or Farley, challenging his termination. In Dav is, the district court granted the defendants summary judgm ent, but on appeal on July 15, 1991, we reversed, as we held that Fultz had not received the pre-termination hea ring required by Cleveland Bd. of Ed. v. Loudermill, 470 U.S. 532, 105 S.Ct. 1487 (1985). Thus, we ordered the defendants to reinstate Fultz to his position. We f urther provided that the district court could consider add itional relief on remand. Significantly, however, we permit ted the Department to refile charges against Fultz on the b asis of a constitutionally adequate hearing. See Fultz v. D avis, Nos. 90-6039 and 91-5058, slip op. at 14 (3d Cir. July 1 5, 1991). Thus, our opinion was a procedural victory f or Fultz but in no way exonerated him from the Department's misconduct allegations against him.

On May 29, 1992, Fultz and the Department reached a settlement agreement before trial on the remand in Davis. The agreement stated that Fultz acknowledged his er ror in engaging in the boat storage business and that he r egretted his activity. On the other hand, the Department agr eed not to re-file charges against him and, as particularly germane here, the Department agreed to "re-employ Fultz in the capacity of Park Superintendent IV with re-employme nt to commence June 15, 1992," "to provide [Fultz] with 4 0 days annual leave and 135 days of sick leave," and to pa y $75,000 to Fultz "in settlement of his claims." The agreement further provided that the defendants woul d

4"purge [Fultz's personnel] file with respect to mat ters

investigated or charged in 1988." Significantly, th e agreement did not mention seniority.

Dunn, who was not a party in Davis, was responsible for implementing the settlement agreement. The Departme nt reemployed Fultz in the Bureau of State Parks in Harrisburg at an appropriate rank and pay level. To comply with the settlement agreement provision requiring t he purging of Fultz's personnel file, Dunn deleted the word "terminated" from Fultz's computer personnel record and substituted the benign term "voluntary resignation" to describe the break in Fultz's work history from 198 8-1992. It is undisputed that upon his reemployment the Department did not credit him with seniority for hi s employment prior to his 1988 termination, or for 19 88- 1992. In effect, the Department treated Fultz as a newly hired employee with seniority accruing from the dat e it
rehired him in 1992.

In November 1992, Fultz applied for a promotion to either of two Department positions at higher levels in ran k and with higher salaries than his position at that time . When the Department awarded the positions to other appli cants, Fultz learned that he had not recaptured his senior ity upon his reemployment, and had been viewed as an employe e with five months rather than 24 years of seniority. Fultz attributes his failure to obtain a position as Park Manager I to his loss of seniority for his service prior to his 1988
termination.

B. Procedural History

On November 22, 1994, Fultz filed this suit against the appellants, advancing two arguments: (1) Dunn had miscalculated his seniority to retaliate against hi m for having successfully brought the 1990 Davis action, and (2) he otherwise would have received one of the promoti ons. We focus on the first argument because our disposit ion of it is determinative of this appeal. The court submi tted the case to the jury on written interrogatories. Thefir st question was "Do you find that [Fultz's] exercise o f the First Amendment rights was a substantial or motivating fa ctor in Defendant Dunn's calculation of his seniority?" The court

5told the jury that if it answered that question "No " it was to

return to the courtroom, thus recognizing that unle ss Fultz was successful on that question he would lose the c ase. On this appeal, Fultz does not contend that the court was wrong on this point.

The jury, however, answered "Yes" and went on to an swer the remaining interrogatories in Fultz's favor and to award him substantial damages. In addition, the court gra nted Fultz equitable relief which, in view of our dispos ition, we need not describe at length. On January 16, 1997, t he district court denied the appellants' motions for a judgment as a matter of law or for a new trial, finding the motions untimely filed, but stating that there was sufficie nt evidence in the record to support the jury's verdict. In a s ubsequent opinion, however, the court acknowledged that the p osttrial motion leading to the January 16, 1997 order was timely and Fultz does not contend that the appellan ts have not preserved the right to contend on this appeal t hat they were entitled to a judgment as a matter of law.

III. DISCUSSION

Our standard of review on this appeal is well estab lished. We exercise plenary review and will overturn a jury verdict "only if, viewing the evidence in the light most fa vorable to the nonmovant and giving it the advantage of every fair and reasonable inference, there is insufficient evidenc e from which a jury reasonably could find liability." Ligh tning Lube, Inc. v. Witco Corp., 4 F.3d 1153, 1166 (3d Cir. 199 3).

Because Fultz alleges that his conduct in having br ought the Davis case led the appellants to retaliate agai nst him by wrongly calculating his seniority, the case is gove rned by the three-prong analysis enunciated by the Supreme Court in Mount Healthy City Sch. Dist. Bd. of Ed. v. Doyl e, 429 U.S. 274, 97 S.Ct. 568 (1977). A public employee al leging an adverse employment action because he engaged in protected First Amendment activity must show that ( 1) he engaged in protected activity, and (2) the protecte d activity was a substantial or motivating factor for the adve rse action. See Swineford v. Snyder County, 15 F.3d 125 8, 1270 (3d Cir. 1994) (applying Mt. Healthy test). If the

6plaintiff satisfies the first two prongs, the defen dant can

escape liability by showing that (3) he would have taken the same action absent the protected activity. See Pro v. Donatucci, 81 F.3d 1283, 1287-88 (3d Cir. 1996).

Fultz argues that the protected activity was the successful 1990 Davis suit, and that the adverse ac tion was the miscalculation of seniority.1 While the app ellants acknowledge that Fultz's Davis action was protected First Amendment activity, they counter that no reasonable jury
could have found that Dunn calculated Fultz's senio rity to retaliate against him for having brought that case, because civil service rules governed Dunn's calculation, an d because Fultz did not bargain for recapture of his seniorit y in the settlement agreement.2 Thus, the appellants contend that Fultz did not show that the protected activity was a substantial or motivating factor in Dunn's conduct, and that in any case, they demonstrated that the senior ity
determination would have been the same absent Fultz 's protected activity.3

Inasmuch as appellants acknowledge that Fultz's Dav is suit was protected First Amendment activity, the is sue on this appeal is whether that activity was a substant ial or motivating factor in Dunn's calculation of seniorit y. The district court in a post-trial opinion denying appe llants a judgment as a matter of law determined that "the re cord contains sufficient evidence from which the jury co uld

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1. The jury was instructed that the calculation of seniority, and not the Department's denying Fultz a promotion, was the adv erse action. Fultz argued at trial and in his briefs that the loss of promotion stemmed from the calculation of seniority, but in view of our re sult we need not describe at length the basis for that argument.

2. It is not clear that Dunn actually made a notati on that Fultz did not have seniority for his employment prior to his 1988 termination. The seniority had been eliminated under the applicable civil service rule prior to 1992 and it simply was not restored at that time . Nevertheless, we sometimes will refer to Dunn as having determined F ultz's seniority.

3. Of course, it is difficult to understand how the third Mt. Healthy v. Doyle prong could be implicated in this case, for, if Fultz had not engaged in the protected activity by filing the Dav is case, there is no reason to believe that the Department would have re employed him and thus have had a reason to make decisions affecting his seniority.

7conclude that the decision as to how to calculate [ Fultz']

seniority was within . . . Dunn's discretion." We d isagree. Fultz did not show that Dunn had meaningful discret ion to act other than he did in determining that Fultz did not recapture his seniority upon his reemployment. More over, Fultz did not bargain for recognition of seniority based on his terminated employment in the settlement agreeme nt. Rather, he agreed to be reemployed commencing June 15, 1992. Of course, he had good reason to accept reemployment as of that date rather than to insist on being reinstated retroactively as of 1988 when he was ter minated. After all, he acknowledged his error in engaging in the boat storage business, but the Department nevertheless a greed not to refile the charges against him which our opi nion in Davis permitted it to do. We also point out that th e parties cannot repeat the original settlement negotiations, so we have no way of knowing whether he could have negoti ated successfully to recapture his seniority.

Fultz's seniority was governed by 4 Pa. Code S 101. 714 which provides as follows:

(a) Seniority as used in this part shall be continuous service unless broken by one or more of the following: resignation; retirement; failure to report a fter notification of appointment through mandator y, preferred or optional reemployment rights; e xpiration of mandatory, preferred or optional reemploymen t rights; or failure to report after leave and accepta nce of other permanent employment while on leave of absen ce without pay. If service is broken for one of these reasons, the employe[e] shall lose accrued s eniority. If an employe[e] is returned within 1 year afte r this type of break in service, the employe[e] is entit led to credit for seniority purposes the time accrued up t o the time the break in service occurred, but is not en titled to credit for the time represented by the break in service.

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4. The briefs submitted by both sides in this case treated this regulation as the one that governed this case. However, near t he end of the oral argument, counsel for Fultz suggested for the first time that this regulation was not in effect at the relevant time. Based on his brief, we refuse to entertain that argument.

8(b) Periods of furlough and approved leave of absence

without pay shall be deemed continuous emplo yment for seniority purposes, except that the peri od of furlough or leave of absence without pay wil l not be counted toward seniority.

(c) Removal for cause shall terminate accru ed seniority. Demotion for cause shall terminat e seniority
in the class from which demoted.

Under this rule, Fultz did not have seniority when the Department reemployed him based on his service prio r to
his 1988 removal because his service was not "conti nuous." While the rule provides for recapture of seniority if service is broken for one of the enumerated reasons, this r ecapture is possible only if the "employe[e] is returned wit hin 1 year after this type of break in service." Here, of cour se, the break in service far exceeded one year. Thus, even if Dunn had treated Fultz's termination as a "resignation" or a "retirement" Fultz could not have overcome the one- year obstacle so as to obtain seniority for his service prior to his reemployment. Therefore, we have a situation which, as we recently noted in Larsen v. Senate of the Commonwea lth of Pennsylvania, 154 F.3d 82, 95 (3d Cir. 1998), could arise in
a First Amendment retaliation case:

In some circumstances, the legitimate basis for the actions might be so apparent that the plaint iff 's allegations of retaliatory motive could not alter the
conclusion that under the circumstances . . . the defendants would have been compelled to reac h the same decision even without regard for the pr otected First Amendment activity.

Thus, the protected activity was not a substantial or motivating factor in Dunn's conduct with respect to Fultz's seniority and the appellants are entitled to a judg ment as
a matter of law.

In reaching our result, we reiterate that we recogn ize that when the Department reemployed Fultz, Dunn removed the word "terminated" from his personnel record in the Department's computer system, as directed by the settlement agreement, and entered "voluntary resign ation." Fultz characterizes the change as "falsely" entered and

9retaliatory. Dunn's action was literally "false" in that Fultz

did not voluntarily resign in 1988 but had been ter minated improperly. Yet the evidence showed that inasmuch a s Dunn was directed by the settlement agreement to de lete "terminated," another term had to be entered, and n one of
the available terms characterized what had occurred more accurately.

In any event, Fultz could not rebut Dunn's testimon y that the result -- loss of seniority -- would have been the same regardless of what term he used. Dunn testifie d that he selected the term "voluntary resignation" from a set of terms or "transaction codes" used at that time by t he Department to describe various changes in employmen t status, such as transfers or leaves. While he had d iscretion in labeling the four-year break in service as a "vo luntary resignation," versus such other plausible, availabl e terms as "involuntary resignation" or even "retirement," he testified that his choice of label was in any case immaterial because, whatever the label -- "voluntary resignati on" or "involuntary resignation" or "wrongly terminated an d now
reinstated" -- under the civil service rules Fultz would have lost his seniority.

As we have indicated, our reading of the civil serv ice rules convinces us that Dunn was correct. The appli cable civil service rule states that seniority is lost wh enever there is a break in an employee's service of more than on e year, 4 Pa. Code S 101.71 (a), whether the break is due t o "retirement," "termination" or "resignation," and o ther circumstances. Id. The only express exceptions are for employees who are furloughed or on "leave without p ay," terms which certainly did not describe the circumst ances here. Id., at (a), (b).5 Thus, in his brief Fultz c ompletely misstates what happened when the Department reemplo yed him in 1992, as he indicates that "Mr. Dunn wiped o ut over 24-years of service, by falsely entering Mr. Fultz' s 1988 termination as a `voluntary resignation.' " Br. at 11. In fact,

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5. Dunn testified that he did not use the term "lea ve without pay" to characterize the four-year break because he underst ood that Fultz had
withdrawn funds from the state retirement fund betw een 1988 and 1992 and could not or did not wish to repay them.

10it was the circumstance that Fultz's service was no t

continuous as required by the applicable civil serv ice rule which "wiped out" his seniority.

We find it highly significant that if Dunn had circumvented the Department's transaction codes and more accurately indicated that Fultz had been "wrongfull y terminated and was now reemployed" Fultz neverthele ss would not have recaptured the pre-1988 service for seniority purposes, because his service would not h ave been continuous and the break in service still woul d not
have been attributable to a circumstance under the civil service rules allowing seniority recapture. It is t hus clear that Fultz reasonably cannot charge that Dunn wrong fully deprived him of seniority.

Moreover, if Dunn attempted to invent a term to recapture Fultz's seniority for his service prior t o the 1988 termination, he would have been giving Fultz more t han he bargained for when he came to an agreement with the Department settling the Davis action. The settlemen t agreement did not mention seniority, so when Fultz was returned to work, Dunn had no directive to give Ful tz more than he had bargained for or to which he was entitl ed as, in effect, a new employee.6 The plain fact is that Fultz is misusing this First Amendment retaliation case as a vehicle
to enhance his settlement.

The only evidence Fultz presented to show that Dunn retaliated against him by "incorrectly" reinstating him without accrued seniority was his own belief that u nder the settlement agreement he would be reinstated with ac crued seniority, and his conversation with John Wilk, Exe cutive Director of the Civil Service Commission, when he d id not

___________________________________________________ ______________

6. The district court's order of September 24, 1996 , to remedy Fultz's failure to receive a promotion directed the appella nts to enter into

Fultz's personnel record the term, "[w]rongful termination and reemployment with no break in service," a term that did not exis t as a transaction code option at the time Dunn made the entry (and does no t exist today) and which would have had to have been invented by him f or the express purpose of preserving seniority. This order was an unjustified amendment of the settlement agreement to give Fultz seniority to which
he was not entitled.

11receive a promotion. Fultz asserts that Wilk had to ld him

that "the department had the right to interpret[the seniority rule] however they wanted." But that vagu e evidence cannot be permitted to overcome the unambiguous rule provisions so as to permit a concl usion
that Dunn could have circumvented the rule. The rul e is clear and leaves no room for "interpretation." More over, there was no evidence to show that Fultz had been promised the opportunity to return to work with his seniority preserved. Finally, we point out that ina smuch as Fultz apparently recognized that there was a senior ity question when the 1990 case was settled, he should have clarified that point at that time. If he had done s o, this case
could have been avoided.

In sum, it is perfectly clear that Fultz has not sh own that

Dunn would have -- or could have -- done other than view the four-year interruption as a break in service le ading to the elimination of accrued seniority, given that Fu ltz did not bargain for anything else. We find that Fultz f ailed to provide sufficient evidence to show that his protec ted activity was a substantial or motivating factor for the seniority decision. Thus, Fultz's evidence as to re taliatory conduct was insufficient to support the verdict and the appellants are entitled to a judgment as a matter o f law.

IV. CONCLUSION

For the foregoing reasons, in the appellants' appea l, No. 97-7378, we will reverse the judgment and orders in favor of Fultz granting him damages and equitable relief, and will remand the case to the district court to enter a ju dgment as a matter of law in favor of appellants Dunn and Far ley. We will dismiss Fultz's appeal in No. 97-7503 as moot.

A True Copy:

Teste:

Clerk of the United States Court of Appeals
for the Third Circuit

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