Court Opinion

ID: 8941319
Source: CourtListenerOpinion
Date Created: 2022-11-27 07:58:36.895626+00
Date Added: 2024-06-11T17:09:44.740595
License: Public Domain

LAY, Chief Judge,
concurring in part and dissenting in part.
I respectfully dissent from the majority’s holding that Hogue had no property interest in his employment under Arkansas law. I also write separately to clarify what I view as the limits of the majority’s holding on the measure of Hogue’s damages.
Property interest
I have great difficulty in rationalizing that a seventeen year employment tenure with the State of Arkansas, protected by a state grievance procedure, fails to provide an employee with a sufficient expectancy of continued employment to invoke the requirements of the due process clause. There is no dispute that the existence of a property interest, or “a legitimate claim of entitlement,” Board of Regents v. Roth, 408 U.S. 564, 577, 92 S.Ct. 2701, 2709, 33 L.Ed.2d 548 (1972), in state employment is to be determined by state law. Bishop v. Wood, 426 U.S. 341, 344, 96 S.Ct. 2074, 2077, 48 L.Ed.2d 684 (1976). As the majority opinion points out, the traditional rule in Arkansas is that an employee is generally terminable at will when the term of employment is indefinite. See Griffin v. Erickson, 277 Ark. 433, 436-37, 642 S.W.2d 308, 310 (1982). Further, the majority makes clear that the Arkansas Supreme Court has never squarely declared its “employment at will” doctrine legally defunct. However, the state court has, in three recent opinions, declined to squarely apply the doctrine.1 In the most recent of these cases, the Arkansas court declared “[w]e have clearly stated that we will reexamine our doctrine when we are presented with a case in which the contract of employment provides for discharge only for cause and the employee is discharged arbitrarily or in bad faith.” Gaulden v. Emerson Electric Co., 284 Ark. 149, 152, 680 S.W.2d 92, 94 (1984) (emphasis added).2 Indeed, in Jackson v. Kinark Corp., 282 Ark. 548, 669 S.W.2d 898 (1984), the court reversed a summary judgment in favor of the employer based on the traditional rule, so that the facts could be developed on whether an employee handbook created a contract of employment giving rise to a cause of action for wrongful discharge. Given the express language in Gaulden that the *1326court will reexamine the issue, and the court’s disposition in Jackson, it would seem clear that the Arkansas Supreme Court would hold that a contract of employment prohibiting discharge except for good cause creates an enforceable contract right in the employee, and thus an enforceable property interest, that the employee will not be discharged except for cause. In matters such as this we must decide state law in the same manner as the Arkansas Supreme Court would. In the alternative, although I feel that the state certification procedure should be used rarely by a federal appellate court,3 any doubts on this issue would better be resolved by certifying the issue to the state supreme court for decision rather than by denying a seventeen year employee his livelihood by speculating about what state law might be.
Further, it seems clear that the “Policies and Procedures on Employee Grievance of the Department of Human Services” creates such a contract between Hogue and his employers. The grievance procedure states that an employee “who feels he/she has been terminated unfairly will have the right to appeal, under the following formal procedure.” This provision may be properly construed to impose substantive restraints on the decision to terminate.4 The term “unfair” in the employment context lends itself to an ordinary meaning of “without good cause.” Thus, the appeal procedure here should be interpreted to both create a contract between Hogue and his employer that he will not be terminated except for cause, and to transform a “mere procedure” into a substantive expectancy. I would therefore affirm the district court’s conclusion5 that Hogue had a property interest in his job and hold that, if pretermin-ation procedures were lacking, he is entitled to damages until such time as a proper hearing is held. The proper measure of those damages is the issue to which I now turn.
Measure of damages
I agree with the majority’s precise holding on the damages available to Hogue if he proves that the manner of his termination deprived him of liberty. As the majority points out, under Carey v. Piphus, 435 U.S. 247, 98 S.Ct. 1042, 55 L.Ed.2d 252 (1978), an employee alleging that a discharge deprived him or her of liberty may recover only nominal damages, unless it can be shown that a pretermination hearing would have changed the result or the plaintiff can prove actual damages such as emotional distress.6 At issue in Carey was the measure of damages to be awarded two students who had been suspended from school without the benefit of presuspension procedures. The Court concurred in the court of appeals’ holding that “if [the school officials] can prove on remand that ‘[the students] would have been suspended even if a proper hearing had been held’ then [the students] will not be entitled to recover damages to compensate them for injuries caused by the suspensions.” Carey, 435 U.S. at 260, 98 S.Ct. at 1050 (quoting Piphus v. Carey, 545 F.2d 30, 32 (7th Cir.1976)). Moreover, the Court held that, absent proof of actual injury, the students could recover only nominal dam*1327ages for the violation of their due process rights per se. Carey, 435 U.S. at 262-64, 98 S.Ct. at 1051-52. The Court rejected the students’ argument analogizing the deprivation of procedural due process to defamation per se, in which the plaintiff need not produce evidence of actual injury since substantial damage is presumed to occur. Id.
As the Court also acknowledged in Carey, the proper measure of damages for a constitutional wrong must be evaluated against the nature of the particular constitutional right in question. Carey, 435 U.S. at 264-65, 98 S.Ct. at 1052-53. “[T]he elements and prerequisites for recovery of damages appropriate to compensate injuries caused by the deprivation of one constitutional right are not necessarily appropriate to compensate injuries caused by the deprivation of another.” Id. Thus, an analysis of the reach of the Carey damage rules must take into account the nature of the constitutional injury sustained by the suspended students.
The Court in Carey does not clearly state whether the interest implicated by the students’ suspensions was a liberty or property interest; school suspensions are apparently treated as a hybrid of the two. Compare Goss v. Lopez, 419 U.S. 565, 574, 95 S.Ct. 729, 736, 42 L.Ed.2d 725 (1975) (viewing suspensions as a deprivation of property) with id. at 574-75, 95 S.Ct. at 736-37 (liberty interest implicated); see Paul v. Davis, 424 U.S. 693, 710, 96 S.Ct. 1155, 1164, 47 L.Ed.2d 405 (1976). What does seem clear, though, is that the injury inflicted by a short school suspension is more in the nature of a deprivation of liberty than property; that is, more akin to an infliction of a stigma than a deprivation of a continued entitlement to a state benefit. A brief suspension, like a short illness, does little to impair the overall value of a student’s education. The principal harm to a student arising from a short suspension lies in the possibility that the student’s teachers may begin to view and treat the student as a troublemaker. Thus, the students’ attempt in Carey to analogize their damages to those applicable to defamation seems entirely appropriate.
By contrast, expulsion from school, or having the schoolhouse door barred entirely, imposes no less a stigma but also disparages a student’s fundamental entitlement to a state-provided benefit, namely, education itself. See Plyler v. Doe, 457 U.S. 202, 223, 102 S.Ct. 2382, 2397, 72 L.Ed.2d 786 (1982) (barring class of students from free public education imposes a “lifetime hardship,” “stigma of illiteracy will mark [children] for the rest of their lives”). In such a case, the full panoply of injunctive relief, including school enrollment of students by preliminary injunction pending the outcome of litigation, has properly been awarded. See Plyler v. Doe, 458 F.Supp. 569, 575 (E.D.Tex.1978).
The same distinction between liberty and property interests controls the remedies available to public employees who are discharged in violation of procedural due process. When, as here, insufficient predepri-vation procedures result in an alleged invasion of protected liberty interests, the Carey damage rules apply. When, however, procedural due process is violated such that an employee’s property interest in employment is invaded, Carey is inapposite and an employee should be entitled to equitable relief in the amount of backpay consistent with our holding in Wellner v. Minnesota State Junior College Board, 487 F.2d 153, 157 (8th Cir.1973). Drawing such a distinction between liberty and property interests for purposes of determining the appropriate remedy is not mere sophistical logic chopping. A name-clearing hearing and a “cause” hearing perform quite different functions and describe quite different constitutional claims. In a name-clearing case, there is generally no issue that the employee could have been discharged for any reason; rather, at issue is whether the reasons publicized for the discharge were stigmatizing and false. See generally Codd v. Velger, 429 U.S. 624, 97 S.Ct. 882, 51 L.Ed.2d 92 (1977). Thus, in any event the employee had no constitutional entitlement to the job itself, but only to the retention of his or her good name for purposes of seeking reem*1328ployment. See Roth, 408 U.S. at 573 n. 12, 92 S.Ct. at 2707 n. 12 (once name-clearing hearing is held employer may remain free to deny employment). The proper measure of damages for a name-clearing case thus focuses on proven harm to the reputation, not loss of the job. See Owen v. City of Independence, 560 F.2d 925, 939-40 (8th Cir.1977), rev’d on other grounds, 445 U.S. 622, 100 S.Ct. 1398, 63 L.Ed.2d 673 (1980). By contrast, a “cause” hearing centers on whether the employee has a continued claim to the job itself. Since an employee alleging a deprivation of property is at bottom urging his or her entitlement to continued employment, the measure of damages should thus focus on the value of the job, not the value of the employee’s reputation or other measure of actual damage.
There is language in Carey that suggests that the Court might not have recognized this distinction at the time Carey was decided. At footnote 15 of the Carey decision, the Court notes with disfavor several cases from the fourth and fifth circuits that awarded a backpay measure of damages for public employees discharged for cause but without procedural due process. Carey, 435 U.S. at 260 n. 15, 98 S.Ct. at 1050 n. 15. This language is dicta only, and seemingly is put to rest by Cleveland Board of Education v. Loudermill, 470 U.S. 532, 105 S.Ct. 1487, 84 L.Ed.2d 494 (1985).7 The unequivocal message of Loudermill is that due process “requires ‘some kind of a hearing’ prior to the discharge of an employee who has a constitutionally protected property interests in his [on her] employment.” Loudermill, 105 S.Ct. at 1493 quoting Roth, 408 U.S. at 569-70, 92 S.Ct. at 2705. This rule clearly imposes on public employers an obligation to retain an employee on the payroll until a pretermination hearing satisfying the Loudermill notice and hearing requirement is conducted.8 Significantly, the Court observed “in those situations where the employer perceives a significant hazard in keeping the employee on the job, it can avoid the problem by suspending with pay.” Loudermill, 105 S.Ct. at 1495 (footnote omitted, emphasis added).9 To effectively bar recovery of back pay damages by the application of the Carey rules would make a mockery of the requirement of a pretermination hearing since, without the deterrent of a back pay award, no incentive remains for the employer to do anything more than provide only a post-termination hearing.10
In fashioning remedies for constitutional harms, we are charged with the fundamental obligation and responsibility of protecting constitutional rights. In another context, the Court has stated that “[a] damages remedy against the offending party is a vital component of any scheme for vindi-*1329eating cherished constitutional guarantees.” Owen v. City of Independence, 445 U.S. 622, 651, 100 S.Ct. 1398, 1415, 63 L.Ed.2d 673 (1980) (municipalities not entitled to qualified immunity defense). The Court in Owen quoted with approval our decision in United States v. N.L. Industries, Inc., 479 F.2d 354 (8th Cir.1973), where we stated that the reasonably certain prospect of back pay awards “provide[s] the spur or catalyst which causes employers * * * to self-examine and to self-evaluate their employment practices.” Id. at 379, quoted in Owen, 445 U.S. at 652 n. 35, 100 S.Ct. at 1416 n. 35. Loudermill requires no less. I would thus hold that an employee who proves a property deprivation based on having been terminated without a Loudermill pretermination hearing be awarded back pay from the time of discharge until a proper hearing is held.

. See Gaulden v. Emerson Electric Co., 284 Ark. 149, 680 S.W.2d 92 (1984); Jackson v. Kinark Corp., 282 Ark. 548, 669 S.W.2d 898 (1984); Griffin v. Erickson, 277 Ark. 433, 642 S.W.2d 308 (1982).

. The court did not reach the issue in Gaulden, despite the plaintiffs allegation that he had ceased to be an at-will employee upon completion of a probationary period and could be discharged only for cause. The court instead concluded that even if the employee was protected from arbitrary discharge, his employer had good cause to fire him. See Gaulden, 284 Ark. at 152, 680 S.W.2d at 94. The court also did not reach the issue in Griffin. Again the court decided that the employer’s action was justified under a "good cause” standard. Griffin, 277 Ark. at 439-42, 642 S.W.2d at 311-13.

. See Hatfield v. Bishop Clarkson Memorial Hospital, 701 F.2d 1266, 1269-73 (8th Cir.1983) (Lay, C.J., dissenting).

. This construction of the grievance procedure is not inconsistent with Cato v. Collins, 539 F.2d 656, 660-61 (8th Cir.1976). The right to hearing provisions in the teacher employment law challenged in that case, triggered when a teacher is not renewed by the school board, nowhere mention perceived unfairness as a predicate to the teacher’s use of the procedures. Thus, those procedures, in contrast to the grievance procedure at issue here, did not imply that the hearing process was intended to encompass review of the substantive reasons for a teacher's termination. See Cato, 539 F.2d at 660-61 n. 6 (setting forth hearing requirements).

. The majority fails to give deference to the district court's determination of what state law would be. This violates our long standing rule that special weight should be given to the district judge’s construction of state law.

. We recognized the applicability of the Carey damage rules to discharge cases in Bishop v. Tice, 622 F.2d 349 (8th Cir.1980), an employment case alleging a deprivation of liberty. See, Bishop, 622 F.2d at 357-58 n. 17.

. In Okeson v. Tolley School District No. 25, 760 F.2d 864 (8th Cir.1985), a panel of this court, of which I was a member, did apply the Carey damage rules in an employment property interest case. See id. at 869. Although Okeson was decided one month after Loudermill, we did not cite or rely on Loudermill in reaching our decision. Had the Loudermill case been argued to us I believe our panel would have decided this issue differently in Okeson.

. The Court in Loudermill recognized that in some settings, post-deprivation hearings will satisfy due process, citing Ewing v. Mytinger & Casselberry, Inc., 339 U.S. 594, 70 S.Ct. 870, 94 L.Ed. 1088 (1950) and North American Cold Storage Co. v. Chicago, 211 U.S. 306, 29 S.Ct. 101, 53 L.Ed. 195 (1908). Cleveland Board of Education v. Loudermill, 470 U.S. 532, 105 S.Ct. 1487, 1493 n. 7, 84 L.Ed.2d 494 (1985). The cases cited by the Court in no way undermine the absolute application of the Loudermill rule to employment discharge cases. Ewing and North American Cold Storage dealt with the constitutionality of legislation permitting immediate seizure of consumer products believed to be misbranded or dangerous to the public health.

. In contrast, the immediate suspension of a student, without predeprivation notice and hearing, does not violate due process when the student’s "presence poses a continuing danger to persons or property or an ongoing threat of disrupting the academic process." Goss v. Lopez, 419 U.S. 565, 582, 95 S.Ct. 729, 740, 42 L.Ed.2d 725 (1975). This distinction again highlights the disparate constitutional interests at stake in school and employment contexts.

. The ills of this shortcoming are amply set forth in Loudermill and need no repetition here. See Loudermill, 105 S.Ct. at 1494.