No. 96-011 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1996 

.~~ 

KATHARINE S. BOREEN, formerly 

known as KATHARINE SELBY, 

Plaintiff and Appellant, 

GEORGE CHRISTENSEN, a/k/a GEORGE P. CHRISTENSEN, 

a/k/a "CHRIS" CHRISTENSEN, and F. GUY YOUNGBLOOD, 

acting individually and in the capacities of 

administrative officers of the DEPARTMENT OF 

MILITARY AFFAIRS, STATE OF MONTANA, 

Defendants and Respondents 

APPEAL FROM: District Court of the First Judicial District, 

In and for the County of Lewis & Clark, 

The Honorable Jeffrey Sherlock, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Peter Michael Meloy (argued); Meloy & Morrison, 

Helena, Montana 

For Respondents: 

Hon. Joseph P. Mazurek, Attorney General, 

James M. Scheier (argued), Ass't Attorney General, 

Helena, Montana 

Filed: 

Submitted: September 10, 1996 

Decided: December 30, 1996 
Justice W. William Leaphart delivered the Opinion of the Court. 

Plaintiff Katharine S. Boreen (Boreen) appeals the September 

14, 1995 Order of the First Judicial District Court, Lewis and 

Clark County, granting qualified immunity to Defendant F. Guy 

Youngblood (Youngblood) and dismissing Boreen's 42 U.S.C. § 1983 

claim as to Defendant Youngblood. We affirm. 

We consider the following issue on appeal: 

Did the District Court err in granting Defendant Youngblood 

qualified immunity on the basis that Boreen's property interest in 

her employment was not clearly established law at the time she was 

constructively discharged by the Defendants? 

Factual and Procedural Backsround 

Boreen was employed by the Montana Department of Military 

Affairs. Following her resignation from her employment in April 

1990, Boreen filed a complaint against the Department of Military 

Affairs, alleging constructive discharge under the Montana Wrongful 

Discharge From Employment Act. That action was dismissed because 

it was filed after the statute of limitations had passed. Boreen 

then filed a complaint pursuant to 42 U.S.C. 5 1983 (§ 1983) 

alleging that she was terminated from her employment with the 

Department of Military Affairs, and that she was deprived of a 

property interest in her employment without due process of law. 

Youngblood, one of the named Defendants, filed an answer to the 

complaint. Boreen then filed an amended complaint, alleging that 

2 
she was constructively discharged from her employment. Youngblood 

filed an answer to the amended complaint, raising, inter alia, the 

affirmative defense of qualified immunity. Youngblood also filed 

a motion to dismiss or for summary judgment. Youngblood made two 

primary arguments in his motion to dismiss: (1) government 

employees who are not covered by a collective bargaining agreement 

or a contract for a specific duration do not have a property 

interest in their employment; and (2) he was entitled to qualified 

immunity. Youngblood also argued that the amended complaint was 

barred by res judicata and collateral estoppel. 

Following a hearing, in a November 16, 1993 Order, the 

District Court granted Youngblood's motion to dismiss on the ground 

that Boreen had no property interest in her employment. The 

District Court rejected the argument that Boreen's complaint was 

barred by res judicata and collateral estoppel. The District Court 

declined to rule on the question of whether Youngblood was entitled 

to qualified immunity. 

Boreen submitted an interlocutory appeal of the November 16, 

1993 Order to this Court, which reversed the District Court's 

decision. Boreen v. Christensen (1994), 267 Mont. 405, 884 P.2d 

761 (Boreen I). This Court determined that Boreen, whose 

employment was subject to "just cause" requirements for 

termination, had a property interest in her employment and could 

therefore maintain an action under § 1983. The issues of qualified 
immunity, res judicata, and collateral estoppel were not before 

this Court in that initial appeal. 

The case was remanded to District Court where Youngblood 

renewed his motion to dismiss or for summary judgment upon the 

grounds of qualified immunity, i-es judicata, and collateral 

estoppel. In a September 14, 1995 Order, the District Court held 

that it had already rejected Youngblood's motion for dismissal on 

the basis of res judicata or collateral estoppel and resolved the 

case on the issue of qualified immunity. The Court granted 

Youngblood qualified immunity on the basis that he did not violate 

any of Boreen's clearly established rights of which a reasonable 

person should have known. 

Boreen obtained a Rule 54 (b), M.R.Civ.P., certification 

authorizing an interlocutory appeal of the Court's September 14, 

1995 Order since the Order effectively dismissed the case as 

against both defendants. 

Standard of Review 

The question of whether a district court properly granted 

qualified immunity involves a determination of whether the rights 

in question were clearly established at the time of their alleged 

violation, and is a question of law, reviewable, de nova. Cannon 

v. City and County of Denver (10th Cir. 1993), 998 F.2d 867; 

Williams v. Commonwealth of Kentucky (6th Cir. 1994), 24 F.3d 1526. 

In Montana, the standard of review of a district court's 

conclusions of law is whether the court's interpretation of the law 

4 
is correct. Carbon County v. Union Reserve Coal Co., Inc. (1995), 

271 Mont. 459, 469, 898 P.2d 680, 686. 

ISSUE 

Was the District Court correct in holding that Boreen's 

property interest in her employment was not clearly established law 

at the time she was constructively discharged from her employment, 

thereby rendering Youngblood immune from suit? 

The District Court dismissed Boreen's 5 1983 claim against 

Youngblood on the grounds that Youngblood is entitled to qualified 

immunity. Because § 1983 is a federal remedy, qualified immunity 

from a 5 1983 suit is a matter of federal law. Finch v. Wemlinger 

(Minn. 1981), 310 N.W.Zd 66, 69-70; Cooperman v. University Surg. 

Assoc., Inc. (Ohio 1987), 513 N.E.2d 288, 296 (superseded by state 

statute in 1990). 

The purpose of granting qualified immunity to public officers 

is not to protect them from the consequences of their wrongful acts 

but to facilitate the proper operation of government by protecting 

public officers in the discharge of their duties where they act 

honestly and in good faith. Rickard v. Paradis (1975), 167 Mont. 

450, 539 P.2d 718. The good faith requirement has since been 

modified as set forth below. 

The theory of qualified immunity first arose as a defense for 

police officers in Pierson v. Ray (1967), 386 U.S. 547, 87 S.Ct. 

1213, 18 L.Ed.Zd 288. The United States Supreme Court in Scheuer 

v. Rhodes (1974), 416 U.S. 232, 94 S.Ct. 1683, 40 L.Ed.2d 90, 

expanded the defense to apply to a broader group of executive 

branch officers. Rhodes arose out of the shootings at Kent State 

5 
University in 1970. The plaintiffs alleged that Rhodes, then 

Governor of the State of Ohio, recklessly deployed the National 

Guard to the Kent State campus. Rhodes, 416 U.S. at 232. The 

Supreme Court found that a qualified immunity should be available 

to officers of the executive branch of government because of the 

wide range of discretion that officers of the executive branch are 

called upon to exercise. Rhodes, 416 U.S. at 247. The Court found 

that: 

It is the existence of reasonable grounds for the belief 

formed at the time and in light of all the circumstances, 

coupled with good-faith belief, that affords a basis for 

qualified immunity of executive officers for acts 

performed in the course of official conduct. 

Rhodes, 416 U.S. at 247-48. The Court explored the contours of the 

doctrine of qualified immunity through subsequent decisions that 

discussed an "objective" versus a "subjective" test of good faith. 

See Wood v. Stricklund (19751, 420 U.S. 308, 95 S.Ct. 992, 43 

L.Ed.2d 214. An official's subjective good faith belief as to 

whether he or she violated the plaintiff's constitutional rights 

was no longer relevant after Harlow v. Fitzgerald (1982), 457 U.S. 

800, 102 S.Ct. 2727, 73 L.Ed.Zd 396. The standard for granting 

qualified immunity was reformed in this matter: 

We therefore hold that government officials performing 

discretionary functions generally are shielded from 

liability for civil damages insofar as their conduct does 

not violate clearly established statutory or 

constitutional rights of which a reasonable person would 

have known. 

. 

On summary judgment, the judge appropriately may 

determine, not only the currently applicable law, but 

whether that law was clearly established at the time an 

6 
action occurred. If the law at that time was not clearly 

established, an official could not reasonably be expected 

to anticipate subsequent legal developments, nor could he 

fairly be said to "know" that the law forbade conduct not 

previously identified as unlawful . the defense would 

turn primarily on objective factors. 

Harlow, 457 U.S. at 818-19. 

Harlow and its progeny make clear that the qualified immunity 

inquiry is an objective one. a, e.g., Davis v. Scherer (19841, 

468 U.S. 183, 104 S.Ct. 3012, 82 L.Ed.2d 139. The qualified 

immunity inquiry focuses on whether a defendant, faced with 

circumstances similar to those of the defendant before the court 

and in light of the legal authorities extant at the time the 

defendant acted, reasonably should have known that his or her 

conduct was unlawful. Qualified immunity "gives ample room for 

mistaken judgments by protecting all but the plainly incompetent or 

those who knowingly violate the law." Hunter v. Bryant (1991), 502 

U.S. 224, 229, 112 S.Ct. 534, 537, 116 L.Ed.2d 589, 596 (quoting 

Malley v. Briggs (1986), 475 U.S. 335, 343, 106 S.Ct. 1092, 1097, 

89 L.Ed.2d 271, 280). 

Harlow presents a two-pronged test to determine whether an 

official will be granted qualified immunity. The court must first 

consider whether a clearly established right has been violated and 

second, the court must determine whether a reasonable person or 

official would have known that his conduct violated that right. 

Sacco v. High Country Indep. Press (19951, 271 Mont. 209, 216, 896 

P.2d 411, 415. 

The first prong of the Harlow qualified immunity test depends 

on whether the constitutional right allegedly violated was clearly 

7 
established at the time of the official conduct giving rise to the 

litigation. See Finkelstein v. Bergna (9th Cir. 1991), 924 F.2.d 

1449; Burgess v. Pierce County (9th Cir. 1990), 918 F.Zd 104. 

The plaintiff has the burden of proving that the right which 

the defendants allegedly violated was clearly established at the 

time of the alleged misconduct. Baker v. Racansky (9th Cir. 1989), 

887 F.Zd 183, 186. 

A defendant need not have actual knowledge of a decision which 

the plaintiff claims clearly established the law. Neither should 

the defendant be required to have actual knowledge of a decision 

upon which he relies to show that the law was not clearly 

established. a, e.9., Mitchell v. Forsyth (1985), 472 U.S. 511, 

105 s.ct. 2806, 86 L.Ed.Zd 411; Anderson v. Creighton (1987), 483 

U.S. 635, 107 S.Ct. 3034, 97 L.Ed.Zd 523. 

In the present case, Boreen alleges that she had a clearly 

established protected property interest in her employment with the 

Department of Military Affairs when she was constructively 

discharged from her job by Youngblood in April of 1990. 

Youngblood is raising the qualified immunity defense on the 

basis that Boreen's protected property interest in her employment 

was not a clearly established right at the time she was 

constructively discharged. Although this Court held that Boreen 

did have a protected property interest in her employment in Boreen 

I, we must ask whether this property interest was a clearly 

established right in 1990 when Boreen was constructively 

discharged. 

8 
The United States Supreme Court has not established the 

requisite hierarchy of law from which to determine whether a right 

is clearly established. See, e.g., Harlow, 457 U.S. at 818 n.32 

(expressly leaving this question open). Whether a United States 

Supreme Court decision is necessary, whether circuit courts may 

look to lower federal court decisions, and whether state decisional 

law plays a role are questions disputed among circuit courts. See 

Richard B. Saphire, Qualified Immunity in Section 1983 Cases and 

the Role of State Decisional Law, 35 Ariz. L. Rev. 621, 633 (1993). 

Circuit courts are in agreement that the determination of whether 

the right in question is clearly established begins with a relevant 

United States Supreme Court decision if available. -I See e&L, 

Thomas v. Whalen (6th Cir. 1995), 51 F.3d 1285. 

The United States Supreme Court's seminal case establishing an 

employee's property interest in employment is Cleveland Board of 

Education v. Loudermill (1985), 470 U.S. 532, 105 S.Ct. 1487, 84 

L.Ed.2d 494. In Loudermill, the Court held that an Ohio statute 

which protected a public employee's employment during "good 

behavior and efficient service" and prohibited dismissal "except 

for misfeasance or nonfeasance in office" created a property 

interest in continued employment which could not be taken away 

without appropriate procedural safeguards. The Court concluded in 

Loudermill that the "just cause" provision in the Ohio statute 

created such a property interest. 

The Court in Loudermill did not hold that all employees whose 

employment is subject to "just cause" or "for cause" protection 

9 
have a property interest in their employment. Rather, the Supreme 

Court held that the language in the Ohio statute, which provided 

that an employee could not be fired except for specific listed 

reasons, gave the plaintiff a property interest in his job under 

Ohio law. Loudermill, 470 U.S. at 538-39. The Ohio laws expressly 

provided that employees were classified civil servants who were 

entitled to hold positions of employment, and that they were 

entitled to hold their positions during good behavior and efficient 

service. The Ohio employees' pay could not be reduced, nor could 

they be suspended, or removed from their positions, except for 

specific statutory violations. Loudermill, 470 U.S. at 538. 

The Supreme Court decision in Loudermill emphasized that 

property interests "are not created by the Constitution, they are 

created and their dimensions are defined by existing rules or 

understandings that stem from an independent source such as state 

law." Loudermill, 470 U.S. at 538 (quoting Board of Regents v. 

Roth (1972), 408 U.S. 564, 577). Thus the question of whether a 

property interest exists must be examined by reference to state 

law. Bishop v. Wood (1976), 426 U.S. 341, 344, 96 S.Ct. 2074, 

2077, 48 L.Ed.2d 684, 690. The Loudermill decision, therefore, did 

not answer the question of whether a public employee in Montana has 

a property interest in his or her employment. 

The "just cause" provision analyzed in Loudermill was 

contained in an Ohio statute whereas the "just cause" provision 

Boreen claims protection under is found in a Montana administrative 

rule. Rule 2.21.6509, ARM. In addition, Montana has an "at will" 

10 
employment statute, § 39-Z-503, MCA, which has been construed as 

providing no property interest in employment absent a "specified 

term" of employment. Reiter v. Yellowstone County (1981), 192 

Mont. 194, 627 P.2d 845. Loudermill did not address, nor did it 

resolve, the issue of whether a "just cause" regulation converts an 

employment "at will" to employment for a specified term. It is 

necessary then to examine Montana law as expressed by this Court 

and the federal courts interpreting Montana law to determine if 

Boreen had a property interest in her employment in 1990. 

This Court described the issue of whether a public employee in 

Montana had a property right in employment as one of "first 

impression" in Boreen I. Boreen I, 884 P.2d at 763. The Court 

confirmed that "a close reading of our prior cases clarifies that 

we have not heretofore decided the issue presented in the instant 

case . .'I Boreen I, 884 P.2.d at 769. While the nonexistence 

of a decision specifically addressing the alleged right is a 

"significant consideration" in determining whether the right is 

clearly established, Fortner v. Thomas (11th Cir. 1993), 983 F.2d 

1024, 1028, the plaintiff need not produce a case directly on point 

to show that a right was clearly established. Ostlund v. Bobb (9th 

Cir. 1987), 825 F.2d 1371, 1374. Nonetheless, the contours of the 

right allegedly violated must be sufficiently clear that a 

reasonable official would understand that what he is doing violates 

that right. Anderson, 483 U.S. at 640. 

Montana has an "at will" employment statute providing that an 

employment with "no specified term" may be terminated by either 

11 
party on notice to the other. Section 39-2-503, MCA. Under that 

law, as construed by this Court prior to April 1990, such "at will" 

employees not covered by any written contract or collective 

bargaining agreement had no property interest in their employment. 

Reiter, 627 P.2d at 849. In Reiter this Court considered the case 

of a county custodian whose employment was terminated after 

eighteen years of service. In rejecting Reiter's argument that he 

had a property interest in his employment, this Court stated: 

It is clear . . that property interests are created and 

defined by state law. The Montana statute [§ 39-2-503, 

MCA] creates no property interest in employment if there 

is no specified term. 

Reiter, 627 P.2d at 849. Reiter had argued that his longevity of 

service, by implication, created a property interest. The Court 

rejected that argument, and the Court's pronouncements provided a 

firm basis for the conclusion that state employees with no 

specified term of employment likewise had no property interest in 

their employment: 

Even though appellant may have had an implied contract 

with the county by virtue of his longevity of service, it 

would be a contradiction in terms to say that he had an 

"implied specified" period of employment. A specified 

term is one which the parties expressed, and there was no 

expression here concerning the length of employment. 

Section 39-2-503, MCA, operates to fill the gap left by 

the parties by defining the relationship as an "at-will" 

employment. 

Reiter, 627 P.2d at 849. The Court did not answer the question of 

whether an administrative regulation containing a "just cause" 

termination provision creates a "specified period" of employment 

and thus a property interest in that employment. 

12 
The underlying administrative regulation which this Court 

considered in conjunction with Laudermill as giving rise to a 

property interest in Boreen I, was first discussed in Nye v. 

Department of Livestock (1982), 196 Mont. 222, 639 P.2d 498. The 

Court initially determined that Nye had completed her probationary 

period of state employment and hence "had permanent status" in her 

public employment, and then held that there was no showing of "just 

cause" for removing her from her position. EYS, 639 P.2d at 502. 

In considering the question of whether Nye was entitled to 

judicial review of the decision following her grievance, the Court 

explained that the answer depended on whether her grievance was a 

contested case under the Montana Administrative Procedure Act 

(MAPA). &'e, 639 P.2d at 500-501. 

The Court noted that whether a person was entitled to a 

contested case hearing depended not only on statutory rights 

providing for due process but also on whether a hearing is required 

as a matter of constitutional law. WC, 639 P.2d at 501. Nye had 

not cited any statutory or constitutional authority which indicated 

that a person in Nye's position was "required by law" to be given 

an opportunity for hearing prior to a determination of her rights 

or privileges. NYe, 639 P.2d at 501. The Court indicated that its 

own research had likewise not revealed any such authority. 

Therefore, the Court concluded that Nye's grievance procedure did 

not qualify as a contested case under MAPA and consequently, Nye 

was not entitled to judicial review. EYe, 639 P.2d at 501. 

Although the Court held that Nye had "permanent status" in her 

13 
employment, it did not find that such "permanent status" was a 

"specified term” that would defeat the "at will" nature of Nye's 

employment, giving her a constitutional right to a hearing. 

The Court next considered whether Nye could bring a claim of 

wrongful discharge. Agreeing with the district court that Nye's 

employment was "at will" pursuant to § 39-z-503, MCA, this Court 

nevertheless found that Nye was not precluded from bringing a 

wrongful discharge claim: 

The District Court's order of dismissal [of the wrongful 

discharge claim] appears to rest upon the fact that Nye's 

employment was I' at will." Section 39-2-503, MCA. 

However, the tort of wrongful discharge may apply to an 

at will employment situation. 

EYC, 639 P.Zd at 501-502. 

The Court recognized that the administrative "just cause" 

rule, applicable to Nye, "may be the source of a public policy [the 

violation of] which would support a claim of wrongful discharge." 

@Ye, 639 P.2d at 502. Reciting the due process protections 

contained in the policy, the Court concluded that the Department of 

Livestock failed to apply these regulations to Nye and, thereby, 

violated public policy. UYe, 639 P.Zd at 502. The Court then 

remanded the case~on this issue. 

Citing m, a later decision of this Court stated that a 

wrongful discharge claim based on a public policy violation is one 

of several "exceptions11 to the right of "at will" employers to 

discharge employees. Prout v. Sears, Roebuck & Co. (1989), 236 

Mont. 152. 157, 772 P.2d 288, 291. As noted by Justice Morrison in 

14 
a subsequent concurring opinion, such a court-created exception 

does not abrogate the statutory employment "at will" rule: 

The breach of the obligation owed by the employer may 

give rise to a tort action on the part of the employee, 

but does not convert "at will" employment to employment 

for a specific term. 

Dare v. Montana Petroleum Mktg. Co. (1984), 212 Mont. 274, 286, 687 

P.2d 1015, 1022 (Morrison, J., specially concurring). 

When u is read in conjunction with Reiter and subsequent 

Montana decisions analyzing the "at will" statute, it is apparent 

that a Montana employee subject to a "just cause" provision did not 

have a clearly established property interest in her employment 

subject to the protections of the Due Process Clause. Reiter held 

that an implied employment contract did not create a "specified 

term" of employment nor did 'Ipermanent status" in the u case 

create a "specified term" that would render the "at will" statute 

inapplicable to an employee. Although the Court in w held that 

violation of the administrative "just cause" provision may be the 

basis for a claim of wrongful discharge it did not hold that "just 

cause" may be the basis for a protected property interest. 

Subsequent case law emphasized that a wrongful discharge claim did 

not convert an "at will" employment to a "specified term.” 

Although we said that Reiter and a subsequent Montana federal 

district court decision suggested our decision in Boreen I, this 

"suggestion" cannot fairly be said to have clearly established the 

law. "Government officials are not charged with predicting 

the future course of constitutional law." Ostlund, 825 F.2d at 

1374. 

15 
While the pre-1990 case law did not hold specifically that an 

administrative "just cause" provision did not create a property 

interest in employment, neither was it clear that the "just cause" 

provision affirmatively established a property interest. 

Certainly, the "contours" of an employee's right to a property 

interest in employment were not sufficiently clear such that a 

reasonable official would understand that he was violating that 

right. See Anderson, 483 U.S. at 640. We therefore hold that at 

the time Boreen was constructively discharged in 1990, it was not 

clearly established that she had a protected property interest in 

her employment. 

Although Boreen alleges that it was improper for the District 

Court to consider post-1990 decisions in its determination of 

whether her property interest in employment was clearly established 

in 1990, these decisions are relevant indicators of the state of 

the law before Boreen I. Generally courts do not look to postincident decisions in determining whether the prior law had been 

clearly established, but such cases may serve as persuasive 

authority. Baker, 887 F.2d at 187. 

The District Court noted that in 1991, this Court ruled that 

a governmental (school district) employee did not have a property 

interest in his employment. Medicine Horse v. Big Horn Cty. Sch. 

Dist. (1991), 251 Mont. 65, 823 P.2.d 230. In 1994, the Ninth 

Circuit Court of Appeals, in Hollister v. Forsythe (9th Cir. 1994), 

22 F.3d 950, construed Montana law and specifically the Reiter and 

Medicine Horse decisions, and ruled that a county employee subject 

16 
to "just cause" requirements for termination did not have a 

property interest in employment. This Court acknowledged the 

Hollister decision in Boreen I, stating "we simply do not agree" 

with the decision. Boreen I, 884 P.2d at 769. Our disagreement 

with the result in Hollister illustrates the lack of clarity on the 

issue of whether a Montana employee subject to a "just cause" 

provision had a protected property interest in her job before 

Boreen I. 

A determination of whether the law was clearly established 

requires an analysis of the state of the law as of the date of the 

incident in question as opposed to a review of legal developments 

after the incident. Nonetheless, the District Court did not err in 

noting that numerous judicial decisions after 1990 illustrate the 

fact that the question of whether an "at will" employee had a 

property right in employment was not "clearly established" before 

our 1994 decision in Boreen I. Moreover, the Court's conclusion is 

not inconsistent with our analysis of the pre-1990 authority. 

Boreen also argues that Rule 2.21.6509, ARM, the 

administrative rule which requires just cause and due process for 

disciplinary action, clearly established the right upon which 

Boreen bases her 5 1983 claim. In other words, Boreen contends 

that the administrative rule is the source of her procedural due 

process right, and that the rule created clearly established 

constitutional rights as of 1990, thereby defeating Youngblood's 

qualified immunity claim. Boreen's argument is incorrect. 

17 
A similar argument was made by a discharged employee in Price 

v. Brittain (5th Cir. 1989), 874 F.Zd 252. Price alleged that he 

was deprived of his property interest in employment without 

procedural due process. He claimed that his employee handbook, 

which required notice and an opportunity to respond prior to any 

discharge, "made the contours of his procedural due process rights 

clear to defendants." -I Price 874 F.2d at 261. Citing the Supreme 

Court's decision in Davis, the appeals court rejected the argument: 

[Elmployee handbooks cannot alone clarify established 

constitutional rights that are not themselves clear in 

light of preexisting law. 

Price, 874 F.2d at 262. The court found that the defendant was 

entitled to qualified immunity. 

The Fifth Circuit Court of Appeals' holding as to the employee 

handbook underscores the problem with Boreen's argument on the 

issue of whether the "just cause" provision by itself clearly 

established a property right in employment as of 1990. 

As of 1986, this Court had held in Bick v. State, Dept. of 

Justice (1986), 224 Mont. 455, 457, 730 P.2d 418, 420, that "it is 

axiomatic in Montana law that a statute cannot be changed by 

administrative regulation." (Citation omitted.) Accordingly, the 

"just cause" provision in Rule 2.21.6509, ARM, did not by itself, 

as of 1990, clearly establish a property right in the face of the 

"at will" employment statute, § 39-2-503, MCA. 

Our decision in Boreen I was based not on the administrative 

"just cause" provision alone, but on the administrative "just 

18 
cause" provision read in conjunction with the United States Supreme 

Court decision in Loudermill and our decision in u. 

As of April of 1990, § 39-2-503, MCA, provided that an 

employment "having no specified term" may be terminated at the will 

of either party. At that time, this Court had not held that an 

administrative rule containing a "just cause" termination provision 

constituted a "specified term" of employment which would render the 

"at will" statute inapplicable to an employee, thereby creating a 

property interest in his or her employment. 

As the dissent points out, the "at will" employment doctrine 

embodied in § 39-z-503, MCA, is "antithetical" to the "just cause" 

requirement of Rule 2.21.6509, ARM. However, contrary to the 

dissent's conclusion, the fact that the administrative rule is 

incompatible with the statute, only goes to prove that the law was 

confusing (i.e., not clearly established) until our decision in 

Boreen I. 

Because we hold that Boreen's property interest in her 

employment was not clearly established in April of 1990, we need 

not reach the second prong of the Harlow test for granting 

qualified immunity. The second prong asks whether a reasonable 

official under the defendant's circumstances would have known that 

his conduct violated the law. Because the law was not clearly 

established a reasonable official could not have known of it and 

the second prong need not be addressed. See Lucero v. Hart (9th 

Cir. 1990), 915 F.2d 1367, 1371 (citing Harlow for the proposition 

that the unsettled nature of the law, on the issue of entitlement 

19 
to a job, necessarily means that the government officials could not 

have violated a clearly established statutory or constitutional 

right of which a reasonable person would have known). 

we hold, therefore, that Boreen's property interest in her 

employment was not clearly established when she was constructively 

discharged in 1990 and, consequently, Youngblood is immune from 

suit. The District Court's grant of Youngblood's motion to dismiss 

on the basis of qualified immunity was therefore correct. Because 

we affirm the District Court's dismissal on the basis of qualified 

immunity we do not reach the issues of res judicata and collateral 

estoppel. Affirmed. 

We concur: /Y 

Justices 

20 
21 
Justice James C. Nelson dissenting. 

I respectfully dissent. Except as herein set forth, I do not 

disagree with the majority's explication of the general principles 

of law pertaining to qualified immunity and to an employee's 

property interest in her employment. I do, however, disagree with 

its application of these principles to the facts here. In that 

regard, I also believe that the courts--this Court included--have 

unnecessarily and improperly confused what is, in essence, a simple 

and straightforward legal concept that has been clearly established 

in the law for more than a decade: An employee whose employment is 

subject to termination only for "just cause" or "good cause" 

because of a contract, statute, rule or policy has a property 

interest in her employment and may not be deprived of that interest 

without due process of law; such an employee is not an "at will" 

employee. 

First, as regards this case, the majority correctly 

acknowledges that, in the application of the doctrine of qualified 

immunity, whether the law at issue was "clearly established" 

focuses (in the words of the opinion) on the "legal authorities 

extant at the time the defendant acted." What, then, was the law 

"extant" at the time Boreen was constructively terminated on April 

13, 1990? Obviously, in answering this question we need look no 

further than to federal law and Montana law as of that date. 

As to federal law, the U.S. Supreme Court's decision in 

Cleveland Board of Education v. Loudermill (1985), 470 U.S. 532, 

105 S.Ct. 1487, 84 L.Ed.2d 494, had been the law of the land for 

22 
five years prior to Boreen's discharge. We discussed Loudermill at 

length in Boreen v. Christensen (19941, 267 Mont. 405, 884 P.2d 

761, (Boreen I), and there is no need to repeat that analysis. 

Important to our discussion here, however, and again as the 

majority acknowledges, the Court concluded in Loudermill that the 

"just cause" provision in the Ohio statute at issue there created 

a property interest in Loudermill's public employment. The 

majority cites no federal case decided in the years between 

Loudermill and Boreen's termination that departed from that simple 

and straightforward proposition. 

Accordingly, we must next look to the State of Montana law as 

of April 13, 1990. For some twelve years prior to Boreen's 

discharge, her public employment was subject to and was protected 

by State administrative regulations which (a) premised all 

disciplinary action, including discharge, on there being "just 

cause" and (b) required "due process" in the administration of such 

discipline or discharge. Again, these administrative regulations 

are discussed in and appended to our decision in Boreen I. 

Thus, as of April 13, 1990, a public employer in Montana which 

had adopted the administrative regulations aforementioned, knew or 

should have known that the public employee could not be terminated 

absent there being just cause, as defined in 2.21.6507(6), ARM, and 

that the employee was entitled to due process prior to termination 

all as set forth and defined in 2.21.6506, 6507 and 6509, ARM. 

Moreover on that date, given Loudermill, that same public employer 

knew or should have known that if state law conditions termination 

23 
of public employment on "just cause"--as was the case here--then 

that law creates in the employee a property interest in her 

employment. 

In short, on April 13, 1990, the law was clearly established 

that an employee whose employment is subject to termination only 

for "just cause" under state law had a property interest in her 

employment and could not be deprived of that interest without due 

process of law. That simple and straightforward legal principle 

derived directly from the unambiguous requirements of Montana law 

and federal law "extant" on that date. On April 13, 1990, 

Youngblood needed to look no further than the Administrative Rules 

of Montana and Loudermill to arrive at that conclusion. 

Notwithstanding, Respondents here go to great lengths arguing 

that the above settled principle of law was not clearly established 

in April 1990--and in fact was not clearly established until our 

decision in Boreen I. The majority agrees. However, viewed from 

an objective standard, as the majority concedes it must, such a 

position is insupportable. 

First, as early as 1985, the principle of law articulated 

above could not have been more clear to Montana public officials. 

Through Attorney General Mike Greely, Montana participated in 

Loudermill as amicus curiae on behalf of the Cleveland Board of 

Education. See, Loudermill, 470 U.S. at 534. The State took the 

position that state employees should not have a property interest 

in their employment simply because they are protected by an 

administrative just cause requirement. Obviously, Loudermill can 

24 
hardly be read as supportive of that position. Having advanced 

that argument, however, and in light of the Court's decision in 

Loudermill, the handwriting was clearly on the wall five years 

before Boreen was constructively discharged. She was protected by 

a just cause/due process provision in Montana law; she had a 

property interest in her employment. 

Second, while not dealing with the constitutional property 

interest issue addressed in Loudermill, this Court recognized in 

Nye v. Department of Livestock (1982), 196 Mont. 222, 639 P.2d 498, 

that the same just cause/due process regulations which governed 

Boreen's employment were a source of public policy that would 

support a claim of wrongful discharge and that the State 

(Department of Livestock) had violated public policy by failing to 

apply these regulations. Again, three years before Loudermill, 

public employers in Montana were on notice that just cause/due 

process requirements in administrative regulations would implicate 

an employee's right to notice and an opportunity to be heard and to 

the retention of her job if those regulations were not followed. 

Under these circumstances and given the actual state of the 

law as of April 13, 1990, any claim that the principle of law 

establishing Boreen's property interest in her employment was not 

clearly established must necessarily find justification in some 

other basis than a simple reading of the provisions of Montana's 

public policy expressed in the Administrative Rules of Montana 

cited above and in what the majority concedes is the "seminal [U.S. 

Supreme Court] case" on this subject. 

25 
Enter the "at will" employment doctrine. As of April 13, 

1990, one case, Reiter v. Yellowstone Cty. (1981), 192 Mont. 194, 

627 P.2d 845, had discussed Montana's at will employment statute, 

s 39-2-503, in conjunction with an employee's claim of a property 

interest in his employment. We held that, "[tlhe Montana statute 

create[d] no property interest in employment if there [was1 no 

specified term" and therefore, Reiter had no constitutionally 

protected property interest in his employment. Reiter, 627 P.2d at 

849-50. Importantly, as we pointed out in Boreen I: 

Reiter did not raise, nor did we address, the effect on 

the "at will" nature of the plaintiff's employment of the 

parties conditioning termination on a demonstration of 

"just cause" under an administrative regulation adopted 

by the government. In fact, we specifically pointed out 

that Reiter's employment "was not covered by any written 

contract or collective bargaining agreement or 

ordinance." 

Boreen I, 884 P.2d at 765 (citing Reiter, 621 P.2d at 847). 

Accordingly, whatever Reiter stands for, it can hardly be 

argued that our decision in that case made unclear the unambiguous 

requirements of Montana law as expressed in the above cited 

administrative regulations and in the subsequent Loudermill 

decision, when Reiter did not even address the Loudermill issue. 

Correctly, we rejected out of hand any application of Reiter (and 

its progeny) in Boreen I and we should, likewise, do so here. 

Montana's I' at will" employment statute and the cases 

interpreting that statute simply have no bearing where the employee 

is protected by a just cause/due process legal requirement. In 

fact, the whole concept of "at will" employment is antithetical to 

the legal mandate that an employee may not be discharged except for 

26 
just cause or good cause. "At will" employment, as we have defined 

it, is the ability of an employer to dismiss his employee "for a 

good reason, bad reason or for no reason at all." Scott v. Eagle 

Watch Investments, Inc. (1991), 251 Mont. 191, 195, 828 P.2d 1346, 

1349. That definition simply cannot be reconciled with a legal 

requirement that the employer can only discharge his employee for 

just cause or good cause--i.e., as the corollary, that he may not 

terminate his employee for a bad reason or no reason at all. The 

concepts of "at will" employment and "just cause" termination are 

purely and simply incompatible with each other, and our use here of 

"at will" employment cases to justify our decision not only flies 

in the face of our rejection of the applicability of those cases in 

Boreen I, but also lends further confusion to what was, at least in 

April of 1990, a clearly established principle of law. The issue 

of "at will" employment was a red herring in Boreen I; it is in 

this case as well. Boreen never was an "at will" employee; she was 

entitled to retain her job until her employer established just 

cause for her termination and provided her with due process before 

discharging her. Boreen I, 884 P.2d at 766-67. 

That brings me to my last point. The law in April 1990 was 

clearly established. The majority’s reliance on post-1990 cases to 

explain what law was extant at the time Boreen was constructively 

discharged is plainly improper under the doctrine of qualified 

immunity articulated in Harlow v. Fitzgerald (1982), 457 U.S. 800, 

102 S.Ct. 2727, 73 L.Ed.2d 396. The fact that since 1990 courts 

have engrafted onto the rule in Loudermill legal concepts--like "at 

27 
will" employment--that plainly have no bearing on the rule 

articulated in that case speaks not to any confusion in the law in 

1990, but rather to judicial attempts to avoid what Loudermill--and 

Montana's administrative regulations--clearly require. 

Much is made by the'Respondents and by the majority of our 

statements in Boreen I that our decision was one of first 

impression. True enough. Boreen I was just such a case; this 

Court had not, prior to that case, directly addressed the 

Loudermill issue. It does not, however, follow from a case being 

one of first impression before a particular court, that the legal 

principle on which the case is decided has not been already clearly 

established in the black-letter law or in some other controlling 

body of case law. In fact, as pointed out above, that was 

precisely the situation in Boreen I. Montana's administrative 

regulations and Loudermill dictated the rule in Boreen I. 

Moreover, by the time we decided Boreen I in 1994, the courts had 

had four years to complicate and confuse what was clear in 1990. 

Notwithstanding, even with the additional four years of state and 

federal case law, this Court had no apparent difficulty in 

concluding, on the basis of Montana's administrative regulations 

and Louder-mill, that Boreen had a property interest in her public 

employment. If that simple principle of law was clear to this 

Court in 1994, it was, likewise, certainly clearly established in 

April 1990. We did not make any new law in 1994; we simply set 

forth what clearly had been the law since 1985. 

Our decision here cannot be justified on the basis of the 

28 
principles of law cited by the majority. The law was clearly 

established on April 13, 1990: because Boreen's employment was 

protected by state regulations prohibiting her from being 

discharged absent her employer demonstrating just cause, she had a 

property interest in her employment and could not be deprived of 

that property interest without due process of law. Youngblood is 

not entitled to qualified immunity from her § 1983 claims. 

Katharine Boreen won the battle in Boreen I; unfortunately, 

she has lost the war in Boreen II. I dissent. 

Justice Terry N. Trieweiler and 

foregoing dissent. 

/-- \ J+jyTJ~Q&,-&g/ / Justices 

29