No. 94-602

IN THE SUPREME COURT OF THE STATE OF MONTANA

1996

Defendant and Appellant.

APPEAL FROM: District Court of the Eighth Judicial District,

In and for the County of Cascade,

The Honorable Thomas McKittrick, Judge presiding.

COUNSEL OF RECORD:

For Appellant:

Dennis McCafferty, James, Gray & McCafferty,

Great Falls, Montana (argued)

For Respondent:

Kenneth R. Olson, Attorney at Law,

Great Falls, Montana (argued)

Filed:

Heard: October 17, 1995

Submitted: October 17, 1995

Decided: February 26, 1996
Justice James C. Nelson delivered the Opinion of the Court.

The State of Montana (State) and its Department of Revenue

(DOR) appeal from the final judgment entered by the Montana Eighth

Judicial District Court, Cascade County, following a jury trial

finding that Shannon Wadsworth (Wadsworth) was wrongfully

terminated from his employment with DOR; finding said wrongful

termination was the proximate cause of the damages suffered by

Wadsworth; and awarding Wadsworth $85,000 in damages. We affirm.

ISSUES

The following are issues on appeal:

1 . Did the District Court err in not granting the State's

motion for summary judgment based on Wadsworth's failure to appeal

his petition for judicial review?

2 . Does Wadsworth have a fundamental constitutional right to

the opportunity to pursue employment and, if so, did the State

provide a compelling interest for infringing upon that right?

3 . Did the District Court err in allowing irrelevant and

prejudicial evidence of treatment which Wadsworth claimed he

received prior to the termination of his employment?

4 . Did the District Court err in allowing irrelevant and

prejudicial evidence of treatment which other DOR employees claimed

they received from DOR?

5 . Did the District Court err in allowing improper opinion,

speculation, and legal conclusion testimony?

BACKGROUND

Wadsworth began working as a real estate appraiser for DOR in

1974. On September 14, 1981, DOR enacted conflict-of-interest rule

81-2 precluding DOR appraisers from engaging in independent fee

appraisals, real estate sales, or brokerage activities during their

off-duty hours. Conflict-of-interest rule 81-2 provides:

2
The very nature of this Division's work requires

that our employees attain a high level of credibility and

objectivity as viewed by the taxpaying public. When

situations arise, such as conflicts of interest, that

jeopardize either requirement, the integrity of the

Department as well as the respective appraisal and

assessor offices is detrimentally affected. Examples of

conflicts of interest include, but are not limited to,

fee appraising, selling real estate (excluding the sale

of one's personal residence or property), and operating

or working for a real estate firm.

In such undertakings, the actual risk of and/or

appearance of impropriety that occurs cannot be

tolerated. Engaging in such activities will bring about

immediate disciplinary action and may result in

termination.

In December of 1981, Wadsworth received a letter informing him of

the conflict-of-interest rule. He filed a grievance claiming that

the rule is discriminatory, unfair, and unconstitutional.

The DOR Grievance Committee concluded that the rule was

"unreasonable and unnecessary." However, on July 27, 1982, the

Director of DOR, Ellen Feaver, rejected the Grievance Committee's

recommendation and found the policy statement to be rational and

reasonable and thus sustained the rule's application. Wadsworth

petitioned the District Court of the Eighth Judicial District,

Cascade County, to review Ellen Feaver's decision and requested the

court enter an order stating that DOR's policy statement in rule

El-2 is unnecessary, unreasonable, and an arbitrary exercise of

police power by DOR.

On October 20, 1986, the District Court ordered a new

grievance hearing to be held because the tapes from the initial

hearing were missing. DOR subsequently held another grievance

hearing and submitted its recommendation to uphold the policy

3
statement. The Director of DOR, Jon LaFaver, adopted the Grievance

Committee's recommendation as DORIS final decision.

In its final decision, DOR denied Wadsworth's grievance and

gave Wadsworth 30 days to divest himself of all interests in fee

appraising, selling real estate, or operating or working for a real

estate firm, and that engaging in such activities would result in

disciplinary action and possible termination. The State then moved

to dismiss Wadsworth's petition for judicial review for lack of

subject matter jurisdiction. The District Court granted the

State's motion and dismissed Wadsworth's petition for judicial

review. Wadsworth did not appeal from this order.

In March of 1989, DOR directed Wadsworth to comply with the

conflict-of-interest rule within 30 days. Wadsworth commenced a

new grievance with DOR complaining of disciplinary action directed

at him for violating the conflict-of-interest rule. The hearing

examiner found that Wadsworth had to divest himself of his private

fee appraisal business or face discharge. In a letter dated

November 27, 1989, the Director of DOR adopted a final decision

wherein he accepted the decision of the hearing officer, confirmed

the policy statement in rule 81-2, sustained Wadsworth's g-day

suspension without pay, and indicated that Wadsworth had 30 days to

divest himself of his interests in fee appraising and selling real

estate. On February 16, 1990, DOR terminated Wadsworth from his

employment for refusing to give up his outside employment

activities.
In November of 1990, Wadsworth filed a wrongful discharge suit

in the District Court of the Eighth Judicial District, Cascade

county . The State moved for summary judgment arguing that as a

matter of law, Wadsworth's termination was not wrongful and

Wadsworth's contention that DOR's conflict-of-interest rule is

contrary to the United States and Montana Constitutions was barred

by his failure to appeal the dismissal of his petition for judicial

review. The District Court denied the State's motion for summary

judgment. The State then filed a motion in limine seeking to

exclude evidence regarding DORIS treatment of Wadsworth prior to

his termination. The District Court again denied the State's

motion and the case proceeded to trial. The State moved to dismiss

Wadsworth's wrongful termination claim as a matter of law at the

close of Wadsworth's case and renewed the motion at the close of

the evidence. The District Court denied the State's motions and

submitted the case to the jury.

In submitting the case to the jury, the District Judge

included instructions on fundamental rights and that fundamental

rights may not be infringed by the State without a showing of a

compelling state interest. The jury rendered a verdict in

Wadsworth's favor awarding him $85,000 in damages. DOR appeals the

final judgment rendered following the jury trial.

DISCUSSION

1 . Did the District Court err in not granting the State's

motion for summary judgment based on Wadsworth's failure to appeal

his petition for judicial review?

5
The State argues that the District court erred in not

dismissing as a matter of law, Wadsworth's claim that his

employment was wrongfully terminated. The State claims that

Wadsworth raised his constitutional arguments when he challenged

the application of the conflict-of-interest rule in his petition

for judicial review and therefore the doctrine of res judicata bars

him from raising them again in this matter. Conversely, Wadsworth

argues that he brought the instant case under the Wrongful

Discharge from Employment Act (WDFEA) and thus raises a different

subject matter and different issues from those in his petition for

judicial review. We review a district court's ruling on a motion

for summary judgment de nova. Mead v. M.S.B., Inc. (1994), 264

Mont. 465, 470, 872 P.2d 782, 705.

The State relies on our decision in Matter of Estate of Pegg

(1984), 209 Mont. 71, 680 P.2d 316, as the sole authority for its

argument. In Estate of Pesq, Walter Pegg was killed in a

helicopter crash and died intestate. Pegg's third wife, Virginia,

sought appointment as the personal representative of his estate.

Pegg's ex-wives filed petitions requesting that Virginia be removed

as personal representative of Pegg's estate. The District Court

concluded that there was no evidence to support removal of Virginia

as personal representative and denied the petitions. The ex-wives

again filed a petition for removal of Virginia as personal

representative asserting new grounds for the removal. Estate of

Pecrcr, 680 P.2d at 317-318. The district court orally denied these

petitions. We held that the district court's first order refusing

6
to revoke Virginia's status as administrator of Pegg's estate was

final and therefore appealable. The second petitions merely raised

new grounds for removal and "had all the appearances of unjustified

delaying tactic." Therefore, we did not reach the merits of the

arguments in support of removing Virginia as personal

representative. Estate of Peqg, 680 P.Zd at 320.

In the recent case, City of Bozeman v. AIU Ins. Company

(1995), 900 P.Zd 929, 52 St.Rep. 823, we discussed the doctrine of

res judicata more thoroughly. The doctrine of res judicata

includes the following four elements:

(I) the subject matter of each action must be the same;

(2) the parties or their privies of each action must be

the same;

(3) the issues must be the same and relate to the same

subject matter;

(4) the capacities of the persons must be the same and

relate to the same subject matter and the issues between

them.

Citv of Bozeman, 900 P.2d at 932 (citing State ex rel. Harlem Irr.

Dist. v. Judicial Dist. Court (1995), 271Mont. 129, 894 P.2d 943.)

Wadsworth's present action does not meet the four criteria set

forth in Citv of Bozeman. Wadsworth's WDFEA claim involves a

different subject matter from his petition for judicial review,

different issues from his petition for judicial review, and the

capacities of the parties had changed i.n relation to the subject

matter and the issues between them. Initially, Wadsworth and two

other DOR employees sought judicial review of the Director of DOR's

decision to reverse a three-person panel's conclusion that the

conflict-of-interest policy was unreasonable and sought review of

her subsequent decision to re-implement the policy. In the instant

7
case, after his termination, Wadsworth brought a WDFEA claim

against the State. Although it involves the same parties and some

of the same issues, it is a distinct and separate proceeding not

subject to res judicata.

Wadsworth's WDFEA claim is also distinguishable from Estate of

Pega in that it did not involve an unjustified delaying action nor

was it a second action requesting the same relief relying on new

grounds. Accordingly, as a matter of law, the District Court

correctly denied the State's motion for summary judgment.

2 . Whether Wadsworth has a fundamental constitutional right

to the opportunity to pursue employment and, if so, whether the

State provided a compelling interest for infringing upon that

right?

The State argues that the District Court incorrectly referred

questions of law to the jury to determine. The State further

argues that there are no questions of fact implicit in the analysis

of whether the conflict-of-interest rule unconstitutionally

infringed upon the right asserted by Wadsworth, only a question of

law for the judge to determine.

Sections 26-l-201 and 26-l-202, MCA, delineate the province of

the court and the jury. These sections provide as follows:

26-l-201. Questions of law. Except as provided in

Article II, section 7, of the Montana constitution, all

questions of law, including the admissibility of

testimony, the facts preliminary to such admission, the

construction of statutes and other writings, and other

rules of evidence, must be decided by the court.

26-l-202. Questions of fact. If a trial is by jury, all

questions of fact other than those mentioned in 26-l-201

must be decided by the jury, and all evidence thereon

must be addressed to them, except as otherwise provided

by law. If the trial of a question of fact is not by

8
jury, all evidence thereon must be addressed to the trial

court, which shall decide such question.

Sections 25-7-102 and 25-7-103, MCA, similarly set forth issues of

law to be decided by courts and issues of fact to be decided by

juries. Section 26-l-201, MCA, states that it is the province of

the court to construe statutes and other writings. Montana's

constitution clearly constitutes an "other writing," the

interpretation of which is appropriately within the province of the

judge not the jury.

For example, in State v. Poncelet (19801, 187 Mont. 528, 610

P.2d 698, we upheld a trial court's ruling not to allow a witness

to testify about the constitutionality of a law because

[tlhe interpretation and application of the United States

Constitution was a question of law and not a fact in

issue. It was a determination to be made by the trial

judge within his statutory powers.

Similarly, we have held a defendant's attack on the

constitutionality of Montana's compulsory automobile liability

insurance statutes presented only questions of law. State v. Turk

(19821, 197 Mont. 311, 317, 643 P.2d 224, 228. A determination of

the constitutionality of the statutes required an analysis of what

rights were involved and the corresponding level of scrutiny to

apply to the liability insurance statutes. Because the liability

insurance statutes burdened a constitutional right but not a

fundamental constitutional right, the State only had to show that

the statutes were rationally related to a legitimate governmental

objective. -ITurk 643 P.2d at 227. We held that this analysis

exclusively presented questions of law for the judge's

9
determination. Turk -1 643 P.2d at 228; see also People v. Zinn (Co.

19931, 843 P.Zd 1351, 1354 (whether challenged legislation bears a

reasonable relationship to legitimate government interests is a

question of law); State v. Holmes (Wis. 1982), 315 N.W.2d 703, 708

n.7 (constitutional questions are questions of law); Racine Steel

Castings v. Hardy (Wis. 1988), 426 N.W.2d 33, 35 (constitutionality

of a statute is a question of law); Valdez v. Gunter (10th Cir.

1993), 988 F.2d 91, 93, cert. denied 114 S.Ct. 151, 126 L.Ed.2d 113

(1993) (whether asserted right is a fundamental right is a question

of law)

Moreover, in State v. Pastos (1994), 269 Mont. 43, 47, 887

P.2d 199, 202, we recognized that "when the government intrudes

upon a fundamental right, any compelling state interest for doing

so must be closely tailored to effectuate only that compelling

interest." We concluded that the compelling state interest

analysis is a question of law. Pastos, 887 P.2d at 202. In

Pastos, the legal question was whether there was a compelling state

interest which justified a routine, administrative inventory search

of the personal property on, or in the possession of, the arrestee

at the station house following a lawful arrest. Pastos, 887 P.2d

at 202.

The Fifth Circuit Court of Appeals has also held that the

application of the strict scrutiny test is a question of law.

Woodland v. City of Houston (5th Cir. 1991), 940 F.2d 134, 138. In

Woodland, the circuit court stated that the question of whether the

city police department's interest in pre-employment polygraph

10
testing outweighed the applicant's privacy interest was a question

of law and should not have been submitted to the jury. Woodland,

940 F.2d at 138; see also Evans v. Romer (Co. 1993), 854 P.2d 1270,

cert. denied 114 S.Ct. 419, 126 L.Ed.2d 365 (1993) (holding that

the question of whether an existing constitutional right is

infringed is strictly a question of law) (citing Lafferty v. Cook

(10th Cir. 19911, 949 F.2d 1546, 1550, cert. denied, 504 U.S. 911

(1992)); Thompson v. Keohane (1995), 116 S.Ct. 457, 460 (noting the

declaration that "in custody" question is one of law may guide

police, unify precedent, and stabilize the law).

In the instant case, Wadsworth claimed that the conflict-ofinterest rule unconstitutionally infringed upon his fundamental

right to the opportunity to pursue employment. Wadsworth presented

a question of law--i.e. whether he had a fundamental constitutional

right and whether the State showed a compelling interest for

infringing upon that right. Thus, the question before the District

Court was a legal issue containing no implicit questions of fact.

Accordingly, we review as a conclusion of law, the District

Court's determination of whether the right Wadsworth asserted was

a constitutionally protected right, and if constitutionally

protected, whether it was a fundamental right, and if it was a

fundamental right, whether the State provided a compelling interest

for infringing upon it. We review questions of law de nova to

determine whether the court's interpretation of the law is correct.

Carbon County v. Union Reserve Coal Co., Inc. (1995), 271 Mont.

11
459, 469, 898 P.2d 680, 686; Steer, Inc. v. Department of Revenue

(1990), 245 Mont. 410, 474-75, 803 P.2d 601, 603.

Here, the District Court interpreted the law in its

instructions to the jury as follows:

Instruction number 15: All persons have as an

inalienable right the opportunity of pursuing life's

basic necessities. The right to terminate an employee is

not absolute but subject to exercise in accordance with

constitutional provisions.

Instruction number 9: You are instructed that the

right: to pursue life's basic necessities; to acquire,

possess and protect property; to individual privacy are

fundamental rights. Said rights shall not be infringed

by the State without the showing of compelling State

interest.

However, the District Court erred in submitting to the jury,

questions of law that the court itself should have determined. We

hold this to be harmless error, in that, as we shall point out, the

jury came to the correct conclusion. Accordingly, we review the

jury instructions de nova, as the statements of the law applicable

to this case.

Wadsworth asserts that Article II, section 3 of the 1972

Montana Constitution establishes the inalienable right to pursue

life's basic necessities which right necessarily includes the

opportunity to earn a living, and that DOR wrongfully terminated

him because he asserted this constitutionally protected right.

Article II of Montana's constitution, entitled Declaration of

Rights, enumerates various rights, among which are certain

"inalienable rights" set forth at section 3. That section

provides:

12
All persons are born free and have certain

inalienable rights. They include the right to a clean

and healthful environment and the rights of pursuing

life's basic necessities, enjoying and defending their

lives and liberties, acquiring, possessing and protecting

property, and seeking their safety, health and happiness

in all lawful ways. In enjoying these rights, all

persons recognize corresponding responsibilities.

While section 3 does not refer to "fundamental rights" per se,

nevertheless, we have held a right may be "fundamental" under

Montana's constitution if the right is either found in the

Declaration of Rights or is a right "without which other

constitutionally guaranteed rights would have little meaning."

Butte v. Community Union (19861, 219 Mont. 426, 430, 712 P.2d 1309,

1311-13 (holding that Montana's constitution does not create a

right to welfare). The inalienable right to pursue life's basic

necessities is stated in the Declaration of Rights and is therefore

a fundamental right.

While not specifically enumerated in the terms of Article II,

section 3 of Montana's constitution, the opportunity to pursue

employment is, nonetheless, necessary to enjoy the right to pursue

life's basic necessities. See Globe Newspaper Co. v. Superior

Court for Norfolk County (1982), 457 U.S. 596, 604, 102 S.Ct. 2613,

2618-19, 73 L.Ed.2d 248, 255 (First Amendment encompasses those

rights that, while not specifically enumerated in the very terms of

the Amendment, are nonetheless necessary to enjoyment of other

First Amendment rights). As a practical matter, employment serves

not only to provide income for the most basic of life's

necessities, such as food, clothing, and shelter for the worker and

the worker's family, but for many, if not most, employment also

13
provides their only means to secure other essentials of modern

life, including health and medical insurance, retirement, and day

care. We conclude that without the right to the opportunity to

pursue employment, the right to pursue life's basic necessities

would have little meaning, because it is primarily through work and

employment that one exercises and enjoys this latter fundamental

constitutional right. Accordingly, we hold that the opportunity to

pursue employment, while not specifically enumerated as a

fundamental constitutional right under Article II, section 3 of

Montana's constitution is, notwithstanding, necessarily encompassed

within it and is itself a fundamental right because it is a right

"without which other constitutionally guaranteed rights would have

little meaning." Butte, 712 P.Zd at 1311. We also hold that the

District Court correctly interpreted the law in its Instructions

number I5 and 9.

This interpretation of Montana's constitution is supported by

the decisions of other jurisdictions which have held their state

constitutions to encompass a fundamental right to the opportunity

to pursue employment. For example, the right to pursue any proper

vocation under the personal liberty clause of Indiana's state

constitution is a fundamental right. Kirtley v. State (Ind. 1949),

84 N.E.2d 712, 714 (holding that a statute regarding the sale of

tickets interfered with the liberties and the personal and property

rights of a ticket owner). In Kirtlev, the Indiana Supreme Court

construed Indiana's personal liberty clause to confer not only

freedom from servitude and restraint, but also "the right of

14
everyone to be free in the use of their powers in the pursuit of

happiness in such calling as they may choose subject only to the

restraints necessary to secure the common welfare."

Similarly, in Florida, V [tl he right to work, earn a living and

acquire and possess property from the fruits of one's labor is an

inalienable right." Lee v. Delmar (Fla. 1953), 66 So.2d 252, 255.

In Lee, the Florida Supreme Court held that a resolution

prohibiting a real estate salesperson from operating part-time was

invalid as depriving the salesperson of his inalienable right to

work and earn a living and as an excess of power granted to the

Real Estate Commission. Lee, 66 So.2d at 255. In Town of Milton

v. Civil Service Commission (Mass. 19741, 312 N.E.2d 188, 192,

citing Truax v. Raich (19151, 239 U.S. 33, 41, 36 S.Ct. 7, 10, 60

L.Ed. 131, 135, the Supreme Court of Massachusetts stated that

I'[ilt is certainly true that the opportunity to earn a living is a

fundamental right in our society." But the court also clarified

that 'I [ilt is an equally basic axiom that there is no right to

public employment." Milton, 312 N.E.2d at 192 (discussing

durational residency requirements).

Likewise, we distinguish the right to a particular job or

employment from the right to pursue life's basic necessities

through employment. "While the legislature may elect not to confer

a property interest in [public] employment, it may not

constitutionally authorize the deprivation of such an interest,

once conferred, without appropriate procedural safeguards." Boreen

v. Christensen (1994), 267 Mont. 405, 410, 884 P.2d 761, 764

15
(quoting Cleveland Board of Education v. Loudermill (1985), 478

U.S. 532, 541, 105 S.Ct. 1487, 1493, 84 L.Ed.2d 494, 503). 1n

essence, absent a contract, policy, regulation, or statute

providing a specified term of employment, an employee does not have

a property interest in a particular job. Boreen, 884 P.2d at 770.

The Oregon Supreme Court made this germane distinction in Minielly

v. State (Or. 1966), 411 P.2d 69, 73, by stating:

The conclusion to be drawn . . would appear that while

a person does not have a constitutional right to be

employed by the public, the government is not free to

place unconstitutional prerequisites upon the securing of

public employment nor does it have the right to ignore

the constitution if it desires to terminate such

employment.

Accordingly, while Article II, section 3 of Montana's constitution

encompasses the right to the opportunity to pursue employment

generally as a necessary incident of the fundamental right to

pursue life's basic necessities, that provision of our constitution

does not, without more, grant a right or property interest in any

particular job or employment.

Wadsworth makes no claim to the contrary. Wadsworth does not

claim a constitutional right to his state job, but instead claims

that by pursuing employment in addition to his job with the State,

he has the constitutional right to pursue life's basic necessities,

to acquire property, and to be free from the State's interference

with his lawful activities. Wadsworth claims that the State has

infringed these fundamental rights, not that it deprived him of a

right to a specific job.

16
The State argues that because cities or counties may restrict

employees' ability to work in outside jobs by placing restrictions

on the residency of their employees, DOR may similarly restrict

Wadsworth's ability to pursue employment by placing restrictions on

the type of outside employment he may pursue. It is true that

cities may place police officers in a separate category and impose

residence requirements on the officers because the duties and

interests protected by police are of a sufficiently distinct

character from those of other governmental employees. Brenckle v.

Township of Shaler (Pa. 1971), 281 A.2d 920, 922 (a moonlighting

case decided on right to travel grounds). However, cases

discussing residency requirements have no application to the

instant case because they hinge on the right to travel and do not

discuss the right to life's basic necessities or the right to the

opportunity to pursue employment. See Shapiro v. Thompson (19651,

394 U.S. 618, 89 S.Ct. 1322, 22 L.Ed.2d 600; Memorial Hospital v.

Maricopa County (1974), 415 U.S. 250, 94 S.Ct. 1076, 39 L.Ed.2d

306; Cole v. Housing Authority of City of Newport (1st Cir. 1970),

435 F.2d 807; Krzewinski v. Kugler (D.N.J. 1972), 338 F.Supp. 492

(compelling state interest existed in requiring police officers to

reside in the municipality).

The State also cites a California Court of Appeals case in

which an employee challenged a rule limiting the number of hours

she could work in outside employment on the basis that the rule

constituted an irrebuttable presumption. Baity v. Los Angeles

County Civil Service Commission (19801, 162 Cal.Rptr. 812, 813.

17
The court in &&y did not analyze the rule in terms of its

infringement upon the opportunity to pursue employment, but,

instead, analyzed the rule in terms of an allegedly unlawful

irrebuttable presumption. Moreover, the court did not acknowledge

that any rights were involved in the opportunity to pursue

employment and therefore found the county's ability to restrict

employment to be nearly unfettered.

Having concluded that the opportunity to pursue employment is

a fundamental right as a necessary incident to the fundamental

right to pursue life's basic necessities, we must next determine

the level of scrutiny to apply to the infringement of that right.

In determining what level of scrutiny to apply to legislation or to

a rule in question, we first determine what rights are involved.

Eastman v. Atlantic Richfield Co. (1989), 237 Mont. 332, 337, 777

P.2d 862, 865. "The extent to which the Court's scrutiny is

heightened depends both on the nature of the interest and the

degree to which it is infringed." Memorial Hosoital, 415 U.S. at

254-56 (holding that a classification unconstitutionally penalized

persons who exercised their right to interstate migration);

Laurence H. Tribe, American Constitutional Law 5 16-33, at 1610 (2d

ed. 1987). Thus the nature of the individual interest affected

dictates which standard of review to apply. Matter of C.H. (1984),

210 Mont. 184, 198, 683 P.2d 931, 938. The most stringent

standard, strict scrutiny, is imposed when the action complained of

interferes with the exercise of a fundamental right or

discriminates against a suspect class. Gulbrandson v. Carey

18
(1995), 901 P.2d 573, 579, 52 St.Rep. 843, 846 (citing Eastman, 772

P.2d at 865). Strict scrutiny of a statute is required only when

the classification impermissibly interferes with the exercise of a

fundamental right. Arneson v. State, By Dept. of Admin. (1993)‘

262 Mont. 269, 272, 864 P.2d 1245, 1247.

Strict scrutiny of a legislative act requires the government

to show a compelling state interest for its action. Shauiro, 394

U.S. at 634. When the government intrudes upon a fundamental

right, any compelling state interest for doing so must be closely

tailored to effectuate only that compelling state interest.

Pastos, 887 P.2d at 202 (citing Zablocki v. Redhail (1978), 434

U.S. 374, 98 S.Ct. 673, 54 L.Ed.Zd 618). In addition to the

necessity that the State show a compelling state interest for

invasion of a fundamental right, the State, to sustain the validity

of such invasion, must also show that the choice of legislative

action is the least onerous path that can be taken to achieve the

state objective. Pfost v. State (1985), 219 Mont. 206, 216, 713

P.2d 495, 505.

In Robinson, et al. V. Cahill (N.J. 1973), 303 A.2d 273, 282,

New Jersey Supreme Court Chief Justice Weintraub notes that it is

difficult to define "fundamental right" and that

if a right is somehow found to be 'fundamental,' there

remains the question as to what State interest is

'compelling' and there, too, we find little, if any,

light. Mechanical approaches to the delicate problem of

judicial intervention under either the equal protection

or the due process clauses may only divert a court from

the meritorious issue or delay consideration of it.

Ultimately, a court must weigh the nature of the

restraint or the denial against the apparent public

justification, and decide whether the State action is

19
arbitrary. 1n that process, if the circumstances

sensibly so require, the court may call upon the State to

demonstrate the existence of a sufficient public need for

the restraint or the denial.

In the instant case, while DORIS conflict-of-interest policy

or rule is at issue rather than a statute, we, nevertheless, apply

strict scrutiny analysis since the operation of that rule

implicates Wadsworth's fundamental right to the opportunity to

pursue employment. The constitutionality of the conflict-ofinterest rule itself is not the issue, but rather whether the State

has infringed Wadsworth's fundamental right without providing a

compelling interest for doing so.

As we have held, employment is a necessary means to pursue

life's basic necessities, without which the latter fundamental

constitutional right could not be enjoyed. As such, the right to

the opportunity to pursue employment is itself a fundamental right

and is encompassed within the right to pursue life's basic

necessitites as declared under Article II, section 3 of Montana's

constitution. Because the opportunity to work and to make a living

is a fundamental right, it is incumbent upon the state to

demonstrate a compelling interest before it may constitutionally

infringe upon that right. Necessarily, demonstrating a compelling

interest entails something more than simply saying it is so.

Based on the record established in the trial court, we

conclude that, as a matter of law, the State failed to demonstrate

a compelling interest for the conflict-of-interest rule restricting

Wadsworth's ability to pursue employment opportunities and thus

pursue life's basic necessities. Simply because the State alleges

20
a compelling interest, does not obviate the necessity that the

State prove the compelling interest by competent evidence.

Here, the State adopted the conflict-of-interest rule for the

singular purpose of avoiding the appearance of impropriety of real

estate appraisers. The evidence at trial established that there

were no complaints about any appearance of impropriety when State

appraisers appraised property outside of their DOR employment. Mr.

Groepper, the Administrator of the Property Assessment Division,

stated that none of the grievants nor anyone else had been or was

being accused of any actual wrongdoing. The only semblance of a

complaint consisted of a letter that Paul Pistoria wrote DOR

stating that Wadsworth handed out his private business card while

working for the Department. DOR presented no case in which an

appearance of impropriety arose; DOR could not demonstrate that

Wadsworth jeopardized the integrity of or detrimentally affected

DOR or the appraisal or assessor offices in any way. In fact, no

one ever expressed a lack of confidence in the integrity of the

Property Tax Division or expressed a belief that outside employment

activities undermined public confidence. Even Ellen Feaver, the

Director of DOR who rejected the Grievance Committee's

recommendation that the conflict-of-interest rule was unreasonable

and sustained the rule's application, testified that she was aware

of no incident of a DOR appraiser compromising the public trust on

account of outside employment activities. She also testified that

she had not considered the rule's impact on individual appraisers

nor did she consider 5 2-15-112(f), MCA, which limits the

21
rulemaking powers of the department heads to "statements concerning

only the internal management of the agency and not affecting

private rights or procedures available to the public."

Dennis Burr, the DOR Administrator of the Property Tax

Division, issued the conflict-of-interest rule but never enforced

it. Nick Lazanas, the Director of the Cascade County Appraiser

Office also chose not to enforce the rule; he did not believe in it

nor did he see a reason for it. Additionally, the State's expert

witness, Gaylord Aldinger, a member of the International Order of

Assessing Officers, admitted that his organization's code of ethics

did not preclude outside employment activities, and that in his

state, he was not aware of any abuse of official duties by the

activities in question. Moreover, the record is ambivalent as to

whether the State considered the relevant constitutional provision

before it applied the conflict-of-interest policy.

That is not to say that the State could never demonstrate a

compelling interest for the conflict-of-interest rule or for some

other rule restricting the outside employment of its employees. In

this case, on the record here and as a matter of law, it simply did

not.

In this regard we note that Article XIII, section 4 of

Montana's constitution requires the legislature to provide a code

of ethics prohibiting conflict between public duty and private

interest for, among others, state and local employees. We also

note that the legislature has, pursuant to that constitutional

mandate, enacted standards of conduct for public officers and

22
employees, including a code of ethics, at Title 2, Chapter 2, MCA.

Neither DOR nor Wadsworth raise any issue as to the application of

either Article XIII, section 4 or those standards of conduct and

code of ethics in this appeal. Notwithstanding, in the interest of

completeness, we acknowledge both this constitutional provision and

its implementing statutes and point out that there was no

allegation made or evidence in this case that Wadsworth's conduct

was at anytime ever in violation of these statutes.

We hold that, because the State did not demonstrate a

compelling interest for applying the conflict-of-interest rule at

issue here, the State wrongfully terminated Wadsworth's employment.

In this regard, Wadsworth brought his claim under Montana's

WDFEA, asserting that the conflict-of-interest rule violated public

policy because it violated his fundamental right to pursue life's

basic necessities without a compelling state interest for doing so.

In 1987, the Montana Legislature enacted the WDFEA establishing

three elements of wrongful discharge. See 5 39-2-904, MCA.

Section 39-2-904, MCA, states that

A discharge is wrongful only if:

(1) it was in retaliation for the employee's

refusal to violate public policy or for reporting a

violation of public policy;

(2) the discharge was not for good cause and the

employee had completed the employer's probationary period

of employment; or

(3) the employer violated the express provisions of

its own written personnel policy.

Moreover, § 39-2-903(7), MCA, defines public policy as "a policy in

effect at the time of the discharge concerning the public health,

23
safety, or welfare established by constitutional provision,

statute, or administrative rule."

Wadsworth contends that DOR terminated his employment in

retaliation for his refusal to abide by a rule that was in

contravention of public policy. Wadsworth asserts that the public

policy in effect at the time of his discharge was the policy

established by constitutional provision guaranteeing each person

the right to pursue life's basic necessities by earning a living.

We agree.

Public policy is often based on constitutional provisions,

especially those which on their face, create inalienable or

fundamental rights. See Gantt v. Sentry Ins. (Cal. 1992), 824 P.2d

680, 687; see also Foley v. Interactive Data Corp. (Cal. 1988), 765

P.2d 373. For example, in Gantt the Supreme Court of California

noted that public policy "must involve a matter that affects

society at large rather than a purely personal or proprietary

interest of the plaintiff or employer; in addition, the policy must

be fundamental, substantial, and well established at the time of

discharge." Gantt, 824 P.2d at 684. In discussing the public

policy exception to wrongful discharge, the court further noted

that:

A public policy exception carefully tethered to

fundamental policies that are delineated in

constitutional or statutory provisions strikes the proper

balance among interests of employers, employees and the

public. The employer is bound, at a minimum, to know the

fundamental public policies of the state and nation as

expressed in their constitutions and statutes; so

limited, the public policy exception presents no

impediment to employers that operate within the bounds of

law. Employees are protected against employer actions

24
that contravene fundamental state policy. And society's

interests are served through a more stable job market, in

which its most important policies are safeguarded.

Gantt, 824 P.2d at 688.

Article II, section 3 of Montana's constitution explicitly

protects the right to pursue life's basic necessities as an

inalienable or fundamental right, which, as stated above, includes

the right to the opportunity to pursue employment as a necessary

incident. Accordingly, Montana's public policy in this regard is

set forth in Article II, section 3.

Since we have determined that, on the record here, there was

no demonstrated compelling interest for the State's conflict-ofinterest rule, it follows that the rule violated the public policy

in favor of the right to pursue life's basic necessities protected

under Montana's constitution. Accordingly, the State's termination

of Wadsworth in retaliation for his refusal to abide by a rule that

was in contravention of the constitution violated the WDFEA.

3 . Did the District Court err in allowing irrelevant and

prejudicial evidence of treatment which Wadsworth claimed he

received prior to the termination of his employment?

4 . Did the District Court err in allowing irrelevant and

prejudicial evidence of treatment which other DOR employees claimed

they received from the Department?

5 . Did the District Court err in allowing improper opinion,

speculation, and legal conclusion testimony?

Because we hold that the State did not provide a compelling

interest for its conflict-of-interest rule, and therefore

wrongfully terminated Wadsworth in retaliation for his refusal to

violate public policy, we need not address issues 3, 4, or 5. In

order for this Court to reverse the District Court, the State had

25
to show that the evidence complained of violated its substantial

rights. The State was not able to do so because the parties agreed

that Wadsworth was terminated for refusing to comply with the

conflict-of-interest rule and was not terminated for any reasons

pertaining to his treatment on the job prior to his termination.

In short, there were no factual disputes as to why Wadsworth was

fired. Accordingly, notwithstanding the District Court's alleged

error in admitting irrelevant evidence, such error, if any, was

harmless because it did not affect the substantial rights of the

State. See Abbey v. City of Billings Police Com'n (19941, 268

Mont. 354, 364, 886 P.2d 922, 928.

Moreover, the State made no showing of how the error may have

prejudiced the amount of damages the jury awarded. The State could

not have made such a showing because the WDFEA constrains the

extent to which damages may be awarded to lost wages, fringe

benefits, and the interest thereon,

years from the date of discharge.

there was no error that affected

State.

for a period not to exceed four

Therefore, we conclude that

the substantial rights of the

Affirmed.
21
Justice Terry N. Trieweiler specially concurring.

I concur with the majority's resolution of Issues numbered I,

3, 4, and 5. I specially concur with the majority's resolution of

Issue 2 because although I agree with the result arrived at in that

section of the Court's opinion, I disagree that the District Court

erred by submitting underlying factual issues to the jury.

The majority correctly concludes that the opportunity to

pursue employment is one of life's basic necessities, and

therefore, a fundamental right guaranteed by Article II, Section 3,

of the Montana Constitution. I also agree that before the State

can interfere with that fundamental right, it must establish a

compelling state interest for doing so and that whether a

particular interest, if proven, is "compelling" is a question of

law. However, where the very facts which form the basis for the

State's alleged interest are disputed, the resolution of that

dispute involves a question of fact.

For example, in this case, the State alleged that its conflict

of interest rule served the interest of avoiding the appearance of

impropriety by real estate appraisers. Had that fact been

established by competent evidence, the determination of whether

that fact established a compelling state interest would have been

an issue of law. However Wadsworth, and numerous others who were

qualified by training and experience, testified that the conflict

of interest rule was unnecessary and bore no relationship to public

confidence in real estate appraisers. Therefore, whether there was

any relationship between the conflict of interest rule and public

28
confidence raised an issue of fact which must necessarily be

decided by the finder of fact--in this case, the jury. As pointed

out by the majority, 5 26-l-202, MCA, provides as follows:

If a trial is by jury, all questions of fact other than

those mentioned in 26-l-201 must be decided by the jury,

and all evidence thereon must be addressed to them,

except as otherwise provided by law. If the trial of a

question of fact is not by jury, all evidence thereon

must be addressed to the trial court, which shall decide

such question.

That underlying questions of fact were at issue is evident

from the majority's opinion. In analyzing whether proof was

offered of a compelling state interest, the majority opinion

repeatedly refers to the evidence at trial. Evidence is considered

for the sole purpose of resolving factual issues which are the

unique responsibility of juries or the district court, as the case

may be.

What the majority has, in effect, held is that in every case

involving a constitutional issue with an underlying factual

component, this Court is in the best position to resolve the

factual issue denovo on appeal. The majority's position is similar

to the position of the majority on the Second Circuit Court of

Appeals in United States v. A Motion Picture Film Entitled “I Am Curious-Yellow”

(2d Cir. 19681, 404 F.2d 196. In that case, a jury, after being

instructed on the constitutional standards for judging obscenity,

concluded that the motion picture in question was obscene. The

Second Circuit Court of Appeals concluded that:

[11n our view obscenity velnon is not an issue of fact

with respect to which the jury's finding has its usual

29
conclusive effect. It is rather an issue of constitutional law that must eventually be decided by the court.

AMotionPictureFilm, 404 F.2d at 199.

Based on its own review of the motion picture, the majority of

that court concluded that it was not obscene because it did not

satisfy the first two parts of the three-part test set forth by the

U.S. Supreme Court.

In his dissent from the majority's disregard for the jury's

fact-finding function, Chief Judge Lumbard made the following

remarks, which I believe apply to the majority's disregard for the

jury's fact-finding function in this case:

My colleagues give no satisfactory explanation why

jurors are not as qualified as they to pass upon such

questions. The conclusion is inescapable that they

really think that the issue of obscenity can be entrusted

to juries only if the judges themselves (or, as here, a

majority of them) think the matters in question go beyond

the limits allowed by law. I had not supposed that only

those who wear federal judicial robes are qualified to

decide whether a motion picture has any redeeming social

value.

. .

But the majority would take away from the jury the

power to pass on these not too difficult and complicated

questions by saying that obscenity is "an issue of

constitutional law" rather than an issue of fact with

respect to which the jury's finding has its usual

conclusive effect. To me this simply means that juries

are not to be trusted where a majority of the judges

disagree with them.

. . . There is no reason to suspect that judges are

in any better position to pass judgment on these matters

than are jurors. .

With due deference to the very considerable

intellectual attainments of my colleagues, I submit that

when it comes to a question of what goes beyond the

permissible in arousing prurient interest in sex, the

30
verdict of a jury of twelve men and women is a far better

and more accurate reflection of community standards and

social value. The jurors are drawn from all walks of

life and their less pretentious positions in the

community qualify them to answer the questions put to

them by Judge Murphy at least as well as circuit judges

in their middle sixties who celebrate in the ivory towers

of the judiciary.

A Motion Picture Film, 404 F.2d at 203-04 (Lumbard, J., dissenting)

(footnotes omitted).

Chief Judge Lumbard's dissent was cited at length and adopted

by the Supreme Court of Wisconsin in Courtv.State (1971), 188 N.W.2d

475, where that court struggled with the proper scope of review of

a jury verdict that printed material was obscene

After noting Chief Judge Lumbard's dissent, that court held

that:

We agree with Mr. Chief Judge Lumbard's dissent and

adopt the principle which he espoused. The determination

of obscenity is a factual matter to be resolved by a

finder of fact following constitutional guidelines,

subject to review by an appellant [sic1 court which seeks

to determine merely whether the evidence underpinning the

verdict was sufficient in view of the record as a whole.

Court, 188 N.W.2d at 483.

In Collier v. Civil Service Commission (Tex. Ct. App. 1989) , 764 S.W.2d

364, the Texas Court of Appeals was asked to decide whether

"nepotism" rules adopted by the Civil Service Commission for the

city of Wichita Falls violated the equal protection clause of the

Texas Constitution. The nepotism rule provided that no person

could be employed by the fire department if a member of that

person's immediate family was already employed by the department.

The city contended that the rule was necessary in order to avoid

31
impairment of one firefighter's judgment when placed in a situation

where a member of that person's family was in peril

The Texas court held that to decide the constitutional issue

raised by the petitioners, several fact issues must first be

resolved, including whether the rule advances legitimate government

objectives. (A similar rational basis test would be applied by our

Court if a fundamental interest was not at issue.) In holding that

underlying factual issues must be resolved by the finder of fact

before the constitutional issue could be resolved, the Texas court

stated as follows:

Deciding the constitutionality of a statute necessarily

involves several related fact questions. See Pine,

[Speculation and Reality: The Role of Facts in Judicial Protection of Fundamental

Rights, 136 U.Pa.L.Rev. 655 (1988)1, 666-67. For example,

Wichita Falls argues the nepotism rule will prevent a

firefighter's unavoidable impairment of judgment in a

situation where a member of his immediate family is

involved in a perilous situation. Appellants argue

strong emotional bonds exist between firefighters even if

they are not related by blood or marriage. These issues

are relevant to whether the nepotism rule will advance

the governmental objective of improving the safety of the

fire department, but this court does not have any special

knowledge of emotional ties between firefighters or the

dangers found within burning buildings. This question

involves social and emotional issues, but it is still a

question of fact. Social facts may be developed through

expert testimony, "Brandeis briefs" or requests for

judicial notice. Pine, supra at 662-63. We are unwilling

to base our decision on the unsupported generalizations

contained in the briefs.

The trial court did not make any specific findings

of fact; therefore, we do not consider the standard of

review for findings of fact in a case involving

constitutional rights. See generally, Louis, Allocating Adjudicative

Decision Making Authority Between the Trial and Appellate Levels: A Unified View

of the Scope of Review, The Judge/Jury Question, and Procedural Discretion, 6 4

N.C.L.Rev. 993 (1986). Appellants should have the

opportunity to introduce evidence to support their

32
challenge to the nepotism rule. Appellants' third point

of error is sustained.

Collier, 764 S.W.2d at 366 (citations omitted).

Likewise, in this case, a factual issue was raised by the

State's contention that its conflict of interest rule was necessary

in order to retain public confidence in its real estate appraisers.

Before the District Court or this Court could decide whether that

need constituted a compelling state interest, someone first had to

decide whether the allegation was true. Under our statutory system

for resolving factual issues, that responsibility belonged to the

jury. Therefore, I would conclude that the District Court did not

err when it submitted that issue to the jury based on the proper

instructions.

I otherwise agree with the majority opinion, including its

conclusion that if the District Court did err by submitting issues

regarding a compelling state interest to the jury, the error was

harmless.

JU ice

Justice William E. Hunt, Sr., joins in the foregoing concurring

opinion.

33
Justice Charles E. Erdmann specially concurring.

I join in the majority's opinion on Issues 1, 3, 4, and 5. I

write separately in order to state that my concurrence on Issue 2

is limited to the final result as I cannot agree with the Court's

reasoning and analysis with respect to the nature of the right at

issue in this case.

The State failed to present evidence that Wadsworth's

activities as a private real estate appraiser had in fact harmed

the DOR or undermined the public's confidence in the tax appraisal

system. I would therefore affirm the District Court's determination that Wadsworth's discharge was wrongful based on the fact that

the State failed to provide any evidence to support its conflict of

interest allegation. The State's speculation that a conflict of

interest existed was not sufficient reason to terminate Wadsworth's

employment and the jury's verdict was proper.

With that said, however, I do not agree with the majority's

conclusion that Wadsworth has a fundamental right to pursue a

particular job. The majority finds a fundamental right in the

right to pursue employment in order to pursue life's basic

necessities. The majority, however, fails to construe the meaning

of "life's basic necessities." In fact, there was no discussion in

the majority opinion as to whether Wadsworth's second job was

needed in order for him to obtain these basic necessities. Life's

basic necessities cannot and should not be an infinite term. One

person's necessity can be another person's luxury. The right to

34
pursue employment is fundamental to the extent that employment

provides those necessities.

In the majority's opinion, Wadsworth has successfully evaded

his responsibility of limiting his right to the basic necessities.

In fact, Wadsworth failed to produce any evidence as to the basic

necessities of which he was deprived. A more plausible right

encompassing Wadsworth's right to pursue employment would therefore

be his right to acquire property. The right to acquire, possess,

and protect property is also an inalienable right. Mont. const .

art. II, 5 3. However, the right to pursue a particular job in

order to acquire property is not fundamental.

The majority distinguishes the right to pursue employment

generally as a necessary incident of the fundamental right to

pursue life's basic necessities from a right or property interest

in any particular job or employment. Absent a specified term of

employment, this Court has held that an employee does not have a

property interest in a particular job. Boreen v. Christensen

(1994), 267 Mont. 405, 420, 884 P.2d 761, 770. Nor should a right

to acquire property impart a fundamental right to pursue employment

in a particular job. In this respect, I see no significant

difference in the right to hold a particular job and the right to

pursue a particular job.

In Cecil v. Allied Stores (1973), 162 Mont. 491, 513 P.2d 704,

nonretail sellers claimed a legislative act that denied them the

right to charge the same finance charges as retail sellers was a

violation of their constitutionally protected right to acquire
property. Similar to the present case, the plaintiffs in Cecil

argued that the act inhibited their ability to make money so that

they may acquire property. This Court held that so long as the

legislative classifications of the act are constitutional, it does

not violate the right to acquire property. Cecil, 513 P.2d at 710.

As for the right to pursue a particular job, this Court has

held that the practice of certain professions is not a fundamental

right. Petition of Morris (1978), 175 Mont. 456, 458, 575 P.2d 37,

38. In Morris, the petitioner claimed that unification of the bar

deprived him of his inalienable right to earn a living. Morris,

575 P.2d at 38. The Court held "[aIn individual has no inalienable

right to earn a living practicing law. It is neither a vested

right nor a property right. The practice of law is a privilege

burdened with conditions." Morris, 575 P.2d at 38 (citation

omitted). The practice of real estate appraising is similar to the

practice of law in that both provide a needed service that is

regulated by a professional board and is subject to certain

educational and ethical standards. See Rule 8.57.413, ARM;

Application of Montana Bar Ass'n Pres. (1974), 163 Mont. 523, 525,

518 P.2d 32, 33.

Finally, the inalienable rights set forth in our constitution's declaration of rights impart corresponding responsibilities.

Mont. Const. art. II, 5 3. Delegates to the 1971-72 Constitutional

Convention expressed concern that people were accepting rights

without recognizing that they create obligations. The convention

committee concluded that the inclusion of such a statement would

36
committee concluded that the inclusion of such a statement would

not infringe or impair the rights granted in the Declaration of

Rights but would only accord a tone of responsibility to their

exercise. Mont. Const. Conv. (1971-72) vol V, 1637. In this case,

the majority has failed to acknowledge any corresponding

responsibility on the part of Wadsworth in exercising his rights.

I would have found that Wadsworth did not have a fundamental

right in pursuing a second job as a real estate appraiser.

Therefore, the analysis of Wadsworth's pursuit of that particular

employment should not be subject to strict scrutiny but scrutiny of

a lesser degree.

a>%

Justice

37