### No. 96-011 INTHESUPREME

COURTOFTHESTATEOFMONTANA 1996 .~~ KATHARINES.BOREEN,formerly knownasKATHARINESELBY,

Plaintiff andAppellant,

GEORGECHRISTENSEN,a/k/a GEORGEP.CHRISTENSEN, a/k/a "CHRIS" CHRISTENSEN,andF.GUYYOUNGBLOOD, acting individually andin the capacities of administrative officers of the DEPARTMENT OF MILITARYAFFAIRS, STATEOFMONTANA,

Defendants andRespondents

APPEALFROM: District Court of the First Judicial District,

In andfor the County of Lewis &Clark, TheHonorable Jeffrey Sherlock, Judgepresiding.

COUNSELOFRECORD:

ForAppellant: Peter Michael Meloy (argued); Meloy &Morrison, Helena, Montana For Respondents: Hon. Joseph P.Mazurek, Attorney General, JamesM.Scheier (argued), Ass't Attorney General, Helena, Montana

Filed: Submitted: September 10, 1996 Decided: December30, 1996Justice 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 42U.S.C. §1983 claim asto Defendant Youngblood. Weaffirm. Weconsider the following issue onappeal: Did the District Court err in granting Defendant Youngblood qualified immunity onthe basis that Boreen's property interest in her employment was not clearly established law at the time she was constructively discharged bythe 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 acomplaint against the Department of Military Affairs, alleging constructive discharge under the Montana Wrongful Discharge From Employment Act. That action wasdismissed 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 ananswer to the complaint. Boreen then filed anamended complaint, alleging that 2shewasconstructively discharged from her employment. Youngblood

filed ananswer to the amended complaint, raising, 

### inter alia, the affirmative defense of qualified immunity. Youngblood also filed

amotion to dismiss or for summary judgment. Youngblood madetwo primary arguments in his motion to dismiss: (1) government employees whoare not covered byacollective bargaining agreement

or a contract for a specific duration do not have a property interest in their employment; and (2) hewasentitled 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 onthe ground that Boreen had no property interest in her employment. The District Court rejected the argument that Boreen's complaint was barred by

### resjudicata andcollateral estoppel. TheDistrict Court declined to rule onthe question of whether Youngblood wasentitled to qualified immunity. Boreen submitted aninterlocutory 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 aproperty interest in her employment and could therefore maintain anaction under §1983. The issues of qualifiedimmunity, 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 aSeptember 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 onthe basis that hedid not violate any of Boreen's clearly established rights of which areasonable 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 adistrict court properly granted qualified immunity involves adetermination of whether the rights in question were clearly established at the time of their alleged violation, and is aquestion 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), 24F.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

4is 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 wasnot clearly established law at the time shewas constructively discharged from her employment, thereby rendering Youngblood immune from suit? The District Court dismissed Boreen's 51983 claim against Youngblood onthe grounds that Youngblood is entitled to qualified immunity. Because §1983 is afederal remedy, qualified immunity from a51983 suit is amatter of federal law. Finch v. Wemlinger (Minn. 1981), 310 N.W.Zd 66, 69-70; Cooperman v. University Surg. Assoc., Inc. (Ohio 1987), 513N.E.2d 288, 296 (superseded bystate statute in 1990). Thepurpose 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 byprotecting public officers in the discharge of their duties where they act honestly and in good faith. Rickard v. Paradis (1975), 167Mont. 450, 539 P.2d 718. The good faith requirement has since been modified asset forth below. Thetheory of qualified immunity first arose asadefense for police officers in Pierson v. Ray (1967), 386 U.S. 547, 87S.Ct. 1213, 18L.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 5University 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 aqualified immunity should beavailable 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, 416U.S. at 247. The Court found that: It is the existence of reasonable grounds for the belief formed at the time andin light of all the circumstances, coupled with good-faith belief, that affords abasis for qualified immunity of executive officers for acts performed in the course of official conduct. Rhodes, 416U.S. at 247-48. TheCourt 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

wasno longer relevant after Harlow v. Fitzgerald (1982), 457 U.S. 800, 102 S.Ct. 2727, 73L.Ed.Zd 396. The standard for granting qualified immunity was reformed in this matter: Wetherefore hold that government officials performing discretionary functions generally are shielded from liability for civil damages insofar astheir conduct does not violate clearly established statutory or constitutional rights of which areasonable person would have known.

. On summary judgment, the judge appropriately may determine, not only the currently applicable law, but whether that law wasclearly established at the time an 6action occurred. If the law at that time wasnot clearly

established, anofficial could not reasonably beexpected to anticipate subsequent legal developments, nor could he fairly besaid to "know" that the law forbade conduct not previously identified asunlawful

.the defense would turn primarily onobjective factors. Harlow, 457 U.S. at 818-19. Harlow and its progeny make clear that the qualified immunity inquiry is anobjective 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 byprotecting all but the plainly incompetent or those whoknowingly 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), 475U.S. 335, 343, 106S.Ct. 1092, 1097, 89L.Ed.2d 271, 280). Harlow presents atwo-pronged test to determine whether an official will begranted qualified immunity. The court must first consider whether aclearly 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, 271Mont. 209, 216, 896 P.2d 411, 415. The first prong of the Harlow qualified immunity test depends

onwhether the constitutional right allegedly violated was clearly 7established 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. Adefendant need not have actual knowledge of adecision which the plaintiff claims clearly established the law. Neither should the defendant be required to have actual knowledge of adecision upon which he relies to show that the law was not clearly established. a, e.9., Mitchell v. Forsyth (1985), 472U.S. 511, 105s.ct. 2806, 86L.Ed.Zd 411; Anderson v. Creighton (1987), 483 U.S. 635, 107 S.Ct. 3034, 97L.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 byYoungblood 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 aprotected 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.

8The United States Supreme Court has not established the

requisite hierarchy of law from which to determine whether aright is clearly established. See, e.g., Harlow, 457 U.S. at 818 n.32 (expressly leaving this question open). Whether aUnited States Supreme Court decision is necessary, whether circuit courts may look to lower federal court decisions, andwhether state decisional law plays arole are questions disputed amongcircuit courts. See Richard B. Saphire, Qualified Immunity in Section 1983 Cases and the Role of State Decisional Law, 35Ariz. L. Rev. 621, 633 (1993). Circuit courts are in agreement that the determination of whether the right in question is clearly established begins with arelevant United States Supreme Court decision if available. -I e&L, See Thomas v. Whalen (6th Cir. 1995), 51F.3d 1285. TheUnited 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 anOhio 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 aproperty interest. The Court in Loudermill did not hold that all employees whose employment is subject to "just cause" or "for cause" protection 9have aproperty 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 aproperty interest in his job under Ohio law. Loudermill, 470U.S. at 538-39. TheOhio 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 andefficient 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, 470U.S. at 538.

The Supreme Court decision in Loudermill emphasized that property interests "are not created bythe Constitution, they are created and their dimensions are defined by existing rules or understandings that stem from an independent source such asstate 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, 48L.Ed.2d 684, 690. TheLoudermill decision, therefore, did not answer the question of whether apublic employee in Montana has

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

10employment 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 aspecified 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 aproperty interest in her employment in 1990. This Court described the issue ofwhether apublic 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

wehave 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 acase directly onpoint to showthat aright wasclearly 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 heis 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

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

law, asconstrued bythis Court prior to April 1990, such "at will" employees not covered by any written contract or collective bargaining agreement hadnoproperty 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 aproperty 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 noproperty 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 aproperty 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 noproperty interest in their employment: Even though appellant may have had an implied contract with the county byvirtue of his longevity of service, it would beacontradiction in terms to say that hehad an "implied specified" period of employment. Aspecified term is onewhich the parties expressed, andthere wasno expression here concerning the length of employment. Section 39-2-503, MCA, operates to fill the gap left by the parties bydefining the relationship asan "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 aproperty interest in that employment.

12The 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), 196Mont. 222, 639 P.2d 498. The Court initially determined that Nye had completed her probationary period of state employment andhence "had permanent status" in her public employment, andthen held that there wasnoshowing 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 onwhether her grievance wasa 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 dueprocess but also onwhether ahearing is required

as a matter of constitutional law. WC, 639P.2d at 501. Nye had not cited any statutory or constitutional authority which indicated that aperson in Nye's position was "required by law" to begiven

anopportunity for hearing prior to adetermination of her rights

or privileges. NYe, 639P.2d at 501. TheCourt 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 acontested case under MAPAand 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

13employment, 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 aconstitutional right to ahearing. The Court next considered whether Nye could bring aclaim 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: TheDistrict 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 mayapply 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, "maybethe source of apublic 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 onapublic 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. in

157, 772P.2d 288, 291. Asnoted byJustice Morrison

14asubsequent 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 atort action onthe part of the employee, but does not convert "at will" employment to employment for aspecific term. Dare v. Montana Petroleum Mktg. Co. (1984), 212Mont. 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 aMontana employee subject to a"just cause" provision did not have a clearly established property interest in her employment subject to the protections of the DueProcess 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 anemployee. Although the Court in w held that violation of the administrative "just cause" provision may bethe basis for aclaim of wrongful discharge it did not hold that "just cause" may be the basis for a protected property interest. Subsequent case law emphasized that awrongful discharge claim did not convert an "at will" employment to a"specified term.” Although wesaid that Reiter and asubsequent Montana federal district court decision suggested our decision in Boreen I, this "suggestion" cannot fairly besaid 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. 15While the pre-1990 case law did not hold specifically that an

administrative "just cause" provision did not create aproperty 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. SeeAnderson, 483 U.S. at 640. Wetherefore hold that at the time Boreen was constructively discharged in 1990, it was not clearly established that she had aprotected 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 wasclearly 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

agovernmental (school district) employee did not have aproperty 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), 22F.3d 950, construed Montana law andspecifically the Reiter and Medicine Horse decisions, and ruled that acounty employee subject

16to "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 onthe issue of whether a Montana employee subject to a "just cause" provision had a protected property interest in her job before Boreen I. Adetermination of whether the law was clearly established requires ananalysis of the state of the law asof the date of the incident in question asopposed to areview 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 wasnot "clearly established" before

our 1994decision 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 anddue process for disciplinary action, clearly established the right upon which Boreen bases her 51983 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 asof 1990, thereby defeating Youngblood's qualified immunity claim. Boreen's argument is incorrect.

17Asimilar argument wasmadebyadischarged employee in Price

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

was deprived of his property interest in employment without procedural due process. Heclaimed that his employee handbook, which required notice and anopportunity to respond prior to any discharge, "made the contours of his procedural due process rights clear to defendants." Price -I 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. TheFifth Circuit Court ofAppeals' holding asto the employee handbook underscores the problem with Boreen's argument on the issue of whether the "just cause" provision by itself clearly established aproperty right in employment asof 1990. As of 1986, this Court had held in Bick v. State, Dept. of Justice (1986), 224Mont. 455, 457, 730P.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,

asof 1990, clearly establish aproperty right in the face of the "at will" employment statute, §39-2-503, MCA. Our decision in Boreen Iwasbased not onthe administrative "just cause" provision alone, but on the administrative "just

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

Court decision in Loudermill andour decision in u.

As of April of 1990, §39-2-503, MCA, provided that an employment "having nospecified term" maybeterminated 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 anemployee, thereby creating a property interest in his or her employment. Asthe 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, weneed not reach the second prong of the Harlow test for granting qualified immunity. The second prong asks whether areasonable official under the defendant's circumstances would have known that his conduct violated the law. Because the law was not clearly established areasonable official could not have known of it and the second prong need not beaddressed. See Lucero v. Hart (9th Cir. 1990), 915F.2d 1367, 1371 (citing Harlow for the proposition that the unsettled nature of the law, onthe issue of entitlement
19

### toajob, necessarily meansthat thegovernment officials could not

haveviolated aclearly established statutory or constitutional right ofwhich areasonable person would haveknown).
wehold, therefore, that Boreen's property interest in her employment wasnot clearly established whenshewasconstructively discharged in 1990and, consequently, Youngblood is immunefrom suit. TheDistrict Court's grant ofYoungblood's motion todismiss
onthe basis of qualified immunity wastherefore correct. Because
weaffirm the District Court's dismissal onthe basis of qualified immunity wedonot reach the issues 

### of res judicata 

### andcollateral estoppel. Affirmed.

Weconcur: /Y

Justices

2021

### Justice JamesC.Nelson dissenting.

Irespectfully dissent. Except asherein set forth, Idonot disagree with the majority's explication ofthe general principles of law pertaining to qualified immunity and to an employee's property interest inher employment. Ido, 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 andimproperly confused whatis, inessence, asimple andstraightforward legal concept that hasbeenclearly established inthe lawfor morethan adecade: Anemployeewhoseemployment is subject to termination only for "just cause" or "good cause" because of a contract, statute, rule or policy has aproperty interest inheremployment andmay 

### notbedeprived ofthat interest without dueprocess of law; suchanemployee is not an"at will" employee. First, as regards this case, the majority correctly acknowledges that, inthe application ofthe doctrine of qualified immunity, whether the law at issue was "clearly established" focuses (in the words of the opinion) onthe "legal authorities extant at the time the defendant acted." What, then, wasthe law "extant" atthe time 

### Boreenwasconstructively terminated onApril 13, 1990? Obviously, in answering this question weneedlook no further than to federal lawandMontana lawasof that date. As to federal law, the U.S. Supreme Court's decision in Cleveland Board of Education v. Loudermill (1985), 470U.S. 532, 105S.Ct. 1487, 84L.Ed.2d 494, hadbeenthe law of the land for 22

### five years prior toBoreen's discharge. Wediscussed Loudermill at

length in Boreen v. Christensen (19941, 267Mont. 405, 884P.2d 761, (Boreen I), andthere is noneedto 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 andBoreen's termination that departed from that simple andstraightforward proposition. Accordingly, wemustnext look tothe State of Montana lawas of April 13, 1990. For sometwelve years prior to Boreen's discharge, her public employment wassubject to andwasprotected by State administrative regulations which (a) premised all disciplinary action, including discharge, onthere being "just cause" and(b)required "dueprocess" intheadministration of such discipline or discharge. Again, these administrative regulations
are discussed in andappendedto our decision in Boreen I. Thus, asofApril 13, 1990, apublic employer inMontanawhich hadadopted the administrative regulations aforementioned, knewor should haveknownthat thepublic employee could not beterminated absent there being just cause, asdefined in2.21.6507(6), ARM,and that the employeewasentitled to dueprocess prior totermination all as set forth anddefined in 2.21.6506, 6507and 6509, ARM. Moreover onthat date, given Loudermill, that samepublic employer kneworshould haveknownthat if state lawconditions termination

23of 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, onApril 13, 1990, the law was clearly established that an employee whose employment is subject to termination only for "just cause" under state law had aproperty interest in her employment and could not bedeprived 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 nofurther than the Administrative Rules of Montana and Loudermill to arrive at that conclusion. Notwithstanding, Respondents here goto great lengths arguing that the above settled principle of lawwasnot clearly established in April 1990--and in fact was not clearly established until our decision in Boreen I. The majority agrees. However, viewed from

anobjective 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 aproperty interest in their employment simply because they are protected by an administrative just cause requirement. Obviously, Loudermill can

24

### hardly beread assupportive of that position. Having advanced

that argument, however, and in light of the Court's decision in Loudermill, the handwriting wasclearly onthe wall five years before Boreenwasconstructively discharged. Shewasprotected by
ajust 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 Nyev. Department of Livestock (1982), 196Mont. 222, 639P.2d498, that the samejust 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) hadviolated public policy byfailing to apply these regulations. Again, three years before Loudermill, public employers in Montana were onnotice that just cause/due process requirements inadministrative regulations would implicate
anemployee's right tonotice andanopportunity tobeheard andto the retention of her job if those regulations were not followed. Under these circumstances andgiven 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 wasnot clearly established must necessarily find justification in some other basis than asimple reading of the provisions of Montana's public policy expressed in the Administrative Rules of Montana cited aboveandinwhatthemajority concedes isthe "seminal [U.S. SupremeCourt] case" onthis subject.

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

1990, one case, Reiter v. Yellowstone Cty. (1981), 192Mont. 194, 627 P.2d 845, had discussed Montana's at will employment statute,

s39-2-503, in conjunction with anemployee's claim of aproperty interest in his employment. Weheld 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, 627P.2d at 849-50. Importantly, aswepointed out in Boreen I: Reiter did not raise, nor did weaddress, the effect on the "at will" nature of the plaintiff's employment of the parties conditioning termination onademonstration of "just cause" under anadministrative regulation adopted bythe government. In fact, wespecifically pointed out that Reiter's employment "was not covered byanywritten 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 madeunclear 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, werejected out of hand any application of Reiter (and its progeny) in Boreen Iandweshould, likewise, doso here. Montana's I'at will" employment statute and the cases interpreting that statute simply have nobearing where the employee is protected by ajust cause/due process legal requirement. In fact, the whole concept of "at will" employment is antithetical to the legal mandate that anemployee maynot bedischarged except for 26

### just causeorgoodcause. "Atwill" employment, aswehavedefined

it, is the ability of anemployer to dismiss his employee "for a goodreason, badreason or for noreason at all." Scott v. Eagle Watch Investments, Inc. (1991), 251Mont. 191, 195, 828P.2d 1346, 1349. That definition simply cannot be reconciled with alegal requirement that the employer canonly discharge his employee for just cause or goodcause--i.e., asthe corollary, that hemaynot terminate 

### his employee for abadreason ornoreason at all. The concepts of "at will" employment and"just cause" termination are purely andsimply incompatible with eachother, andourusehere of "at will" employment casesto justify our decision not only flies inthe face ofourrejection ofthe applicability ofthose cases in Boreen I, but also lends further confusion towhatwas, at least in April of 1990, aclearly established principle of law. Theissue of "at will" employment wasared herring in Boreen I; it is in this caseaswell. Boreenneverwasan"at will" employee; shewas entitled to retain her job until her employer established just
causefor hertermination andprovided herwith dueprocess before discharging her. Boreen I, 884P.2d at 766-67. That brings meto my 

### last point. Thelaw inApril 1990was clearly established. Themajority’s 

### reliance onpost-1990 casesto explain what lawwasextant at the time Boreenwasconstructively discharged is plainly improper under the doctrine of qualified immunity articulated inHarlow v. Fitzgerald (1982), 457U.S. 800, 102S.Ct. 2727, 73L.Ed.2d 396. Thefact that since 1990courts haveengrafted onto therule inLoudermill legal concepts--like "at

27will" 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 toavoid 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 acase being

one of first impression before aparticular court, that the legal principle onwhich 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 wedecided 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, onthe basis of Montana's administrative regulations and Louder-mill, that Boreen had aproperty 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. Wedid not make any new law in 1994; wesimply set forth what clearly had been the law since 1985. Our decision here cannot be justified on the basis of the

28principles 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 hada 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 wonthe battle in Boreen I; unfortunately, she has lost the war in Boreen II. Idissent.

Justice Terry N. Trieweiler and foregoing dissent. 

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

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