Court Opinion

ID: 3004217
Source: CourtListenerOpinion
Date Created: 2015-09-24 22:39:48.023417+00
Date Added: 2024-06-11T11:45:55.744049
License: Public Domain

In the

 United States Court of Appeals
               For the Seventh Circuit

No. 09-2953

P AUL K. O GDEN ,
                                              Plaintiff-Appellant,
                                v.

JAMES A TTERHOLT, C AROL J. M IHALIK,
and the INDIANA D EPARTMENT OF INSURANCE,
                                      Defendants-Appellees.

               Appeal from the United States District Court
       for the Southern District of Indiana, Indianapolis Division.
No. 1:08-cv-00369-JMS-DFH—Jane E. Magnus-Stinson, Magistrate Judge.

        A RGUED A PRIL 13, 2010—D ECIDED M AY 18, 2010

  Before W ILLIAMS, S YKES, and T INDER, Circuit Judges.
  S YKES, Circuit Judge. Oral argument has narrowed this
appeal to a single issue: Did the Commissioner of the
Indiana Department of Insurance and his Chief Deputy
violate Paul Ogden’s free-speech rights when they
required him to resign as manager of the Department’s
Title Insurance Division? Ogden was forced out of his
position after writing a memo to the Commissioner
2                                             No. 09-2953

criticizing the performance of his Chief Deputy and
asking that the Title Insurance Division be removed from
her control. He then sued the Commissioner, the Chief
Deputy, and the Department of Insurance claiming that
his memo was protected speech and his forced
resignation violated his rights under the First Amendment.
The district court entered summary judgment for
the defendants and Ogden appealed.
  We affirm. Ogden’s complaints about the Deputy
Commissioner and his request for a departmental
reorganization were made in the performance of his
professional duties as manager of the Title Insurance
Division. Because he was speaking as a governmental
employee and not a citizen when he wrote the memo,
under Garcetti v. Ceballos, 547 U.S. 410 (2006), the
protections of the First Amendment are not implicated.

                     I. Background
  In November 2006 Paul Ogden was hired as the
manager of the newly created Title Insurance Division
in the Indiana Department of Insurance. The Title
Insurance Division was nestled within the Department’s
Consumer Protection Unit, headed up by Chief Deputy
Commissioner Carol Mihalik. James Atterholt was the
Commissioner of Insurance and in that capacity was
responsible for the entire Department of Insurance. After
taking the reins of the Title Insurance Division, Ogden
very quickly began to resent Mihalik’s management style;
he thought she was emotionally erratic, forgetful, and
No. 09-2953                                                3

too easily distracted by trivial matters. He began working
around Mihalik by reporting directly to Atterholt on at
least some Division matters, a practice which Ogden claims
Atterholt encouraged.
  On September 14, 2007, Ogden informed Atterholt that
he was planning to submit a formal request that the
Title Insurance Division be removed from the Consumer
Protection Unit; Ogden and Atterholt had apparently
discussed this possibility previously. That same day
Ogden met with representatives of the State Personnel
Division to file a formal complaint against Mihalik. In
particular, Ogden claimed that Mihalik (1) flouted
Personnel Division regulations on hiring; (2) misused
funds directed for the Title Insurance Division; and
(3) fostered a hostile work environment. The Personnel
Division informed Ogden that an investigation would be
opened and that he should gather any relevant
information.
  Three days later Ogden wrote a lengthy memorandum
to Atterholt, which Ogden described as a “formal request
to have the Title Insurance Division removed from
the Consumer Protection Unit.” In the memo Ogden
outlined 35 reasons in support of his reorganization
request. Virtually all of these reasons involved allegations
that Mihalik was incompetent or corrupt. Ogden’s
memo repeats many of the allegations he made three
days earlier to the Personnel Division, but, importantly,
the memo never references that formal complaint or
asks that Mihalik be disciplined in any way. One of
Ogden’s final bullet points in the memo states: “If we at the
4                                               No. 09-2953

Title Division are required to continue under Ms.
Mihalik’s supervision, the short term impact will be a
marked decline in morale and productivity of the Division.
The long term impact will be that employees of the
Division will leave and the Division may have to be
disbanded.”
   A few hours after Atterholt received Ogden’s memo,
he summoned Ogden to a meeting. Mihalik was present
with Atterholt at this meeting, and Ogden was informed
that he had two choices: he could either resign or be
fired. Ogden was told that he had been “out of line,” but no
other explanation for the resign-or-be-fired order was
offered. Ogden was given no opportunity to defend
himself against the charge that his memo had been “out
of line.” He chose resignation over termination and signed
a “voluntary” resignation letter so that he could keep
his accrued vacation time and avoid being placed on
Indiana’s “do not hire” list.
  Ogden then sued Atterholt, Mihalik, and the Department
of Insurance in Indiana state court, raising a host of
state claims (including “whistle-blowing,” unjust
termination, and intentional infliction of emotional
distress), as well as a claim under 42 U.S.C. § 1983 for
violation of his First Amendment right to free speech. He
also asserted a due-process claim, the precise nature of
which has been the source of a fair amount of confusion
during this litigation and requires further comment.
  Ogden advanced his § 1983 claim in Count VII of his
complaint, which alleged a free-speech violation but
said nothing of due process. Ogden’s due-process
No. 09-2953                                                  5

allegations were lodged exclusively in Count VIII of
his complaint, but that count is not entirely clear as
to whether the due-process claim sounds in state
or federal law (or both). In relevant part, Count VIII
states: “The due process provided to Ogden falls short
of meeting even the reduced standard required for
at will employees under Indiana law, the Governor’s
Executive Order, and the Indiana and Federal
Constitutions.” But Count VIII makes no mention of § 1983.
  The defendants removed the case to federal court,
observing in their notice of removal that Ogden
was bringing both a First Amendment claim and
a federal due-process claim under § 1983. The magistrate
judge assigned to handle this case apparently read Ogden’s
complaint in the same way during the course of the
proceedings below. 1 So when the magistrate judge ruled on
the defendants’ motion for summary judgment, she
addressed two questions: whether Atterholt and
Mihalik had violated either Ogden’s free-speech rights
or his due-process rights under the Federal Constitution.
The judge granted summary judgment for the defendants
on both grounds and remanded the remaining state claims
back to the Indiana court.
  Ogden then filed this appeal. Based on the proceedings
in the district court, his appeal initially appeared to

1
  In accordance with the provisions of 28 U.S.C. § 636(c) and
Rule 73 of the Federal Rules of Civil Procedure, the parties
consented to have a magistrate judge conduct all proceedings in
the case.
6                                                No. 09-2953

encompass federal free-speech and due-process issues. But
in his reply brief, and again at oral argument, Ogden
told us that his due-process claim arose exclusively
under Indiana law. Accordingly, the only issue for us
is whether the magistrate judge properly granted
summary judgment for the defendants on Ogden’s First
Amendment claim.

                      II. Discussion
  We review a grant of summary judgment de
novo, construing all facts in the light most favorable to
Ogden and drawing all reasonable inferences in his favor.
Reget v. City of La Crosse, 595 F.3d 691, 695 (7th Cir. 2010).
To establish a prima facie case that his First Amendment
free-speech rights were violated, Ogden must first
show that he engaged in constitutionally protected speech
and that this speech was a motivating factor in
his dismissal. Valentino v. Vill. of S. Chi. Heights, 575 F.3d
664, 670 (7th Cir. 2009).
  The Supreme Court’s decision in Garcetti governs the
analysis of whether Ogden’s memo is constitutionally
protected speech. The Supreme Court reiterated in
Garcetti that public employers, like private employers,
are permitted to exercise a significant degree of control
over their employees’ words and actions. 547 U.S. at 418-
19. Nonetheless, public employees remain citizens, and
as such “[t]he First Amendment limits the ability
of a public employer to leverage the employment
relationship to restrict, incidentally or intentionally,
No. 09-2953                                           7

the liberties employees enjoy in their capacities as
private citizens.” Id. at 419. Accordingly, “[s]o long
as employees are speaking as citizens about matters
of public concern, they must face only those speech
restrictions that are necessary for their employers to
operate efficiently and effectively.” Id. But the Court
held that “when public employees make statements
pursuant to their official duties, the employees are not
speaking as citizens for First Amendment purposes, and
the Constitution does not insulate their communications
from employer discipline.” Id. at 421. As the Court
explained: “Underlying our cases has been the premise
that while the First Amendment invests public
employees with certain rights, it does not empower them
to constitutionalize the employee grievance.” Id. at 420
(quotation marks omitted).
  Ogden wrote his memo to Atterholt in his capacity as
the manager of the Title Insurance Division and pursuant
to his official duties in that position—not as a private
citizen. The stated purpose of the memo was to serve
as a “formal request [to the Commissioner] to have the
Title Insurance Division removed from the Consumer
Protection Unit and to operate as a direct report
or under a different Chief Deputy.” In other words,
Ogden was attempting to convince his ultimate
superior, Commissioner Atterholt, that his immediate
supervisor, Deputy Commissioner Mihalik, was unfit
to oversee his division. To be sure, Ogden made many
wide-ranging allegations in the five-page memo, but all
of them were directed toward substantiating his
8                                                No. 09-2953

proposal that the Title Insurance Division be relocated
within the Department of Insurance.
  The memo speaks for itself. It was an effort to
establish—rightly or wrongly—that Mihalik was incapable
of properly supervising the Title Insurance Division,
which Ogden was charged with directly administering.
Ogden pulled no punches and listed 35 separate reasons
why he thought Mihalik was unfit to exercise
supervisory control over the Division. For instance, he
stated that “Ms. Mihalik regularly displays erratic
personal behavior that manifests itself in wide mood
swings, forgetfulness, insecurity, and an inability to
focus on tasks.” Ogden also asserted that “Ms. Mihalik
has caused and continues to cause numerous problems
throughout the Department. Complaints about her
behavior, from low level clerical staff to Chief Deputies, are
an everyday feature of working at the Department of
Insurance.” The litany of grievances continued in this vein.
Nor was Ogden shy about connecting the dots for
Atterholt. At one point he proclaimed that “the future
success of the Title Insurance Division will be impossible
under Ms. Mihalik’s supervision.” Ogden also warned
that “[i]f we at the Title Division are required to continue
under Ms. Mihalik’s supervision, the short term impact
will be a marked decline in morale and productivity of
the Division. The long term impact will be that employees
of the Division will leave and the Division may have to be
disbanded.”
 Ogden’s memo reflects exactly the sort of localized
employment-related speech Garcetti held was not entitled
No. 09-2953                                                9

to First Amendment protection. Ogden’s request to have
the Title Insurance Division transferred plainly falls
within the scope of his official responsibilities as manager
of the Division, and Ogden concedes as much. He insists,
however, that his memo must be viewed as more than
a reorganization request; he maintains that it was also a
complaint about Mihalik’s improper—and possibly
unethical—behavior, which he argues is a matter of general
public concern. For instance, he points to one of the
35 complaints he lodged against Mihalik: that she
improperly directed funds intended for the Title Insurance
Division to other pursuits. His memo also asserted that
Mihalik repeatedly flouted state personnel rules in the
hiring of employees.
  Ogden thus suggests that we divorce the
reorganization request from the charges of official
misconduct—particularly the allegation that Mihalik
misused Division funds. His argument is that although
the reorganization request was made in the course of
his official responsibilities, the reporting of the misuse
of funds was not. He notes that Mihalik confirmed in
her deposition that Ogden’s official job description did
not task him with the responsibility of monitoring
the (mis)management of the Title Insurance Division
Fund. These particular misconduct allegations, Ogden
maintains, reflect the concerns of a private citizen rather
than a public employee. For support he cites Valentino v.
Village of South Chicago Heights, 575 F.3d at 671-72; we held
there that “[i]t is by now well-established that speech
protesting government waste addresses a matter of public
10                                             No. 09-2953

concern and is therefore entitled to constitutional
protection.”
  Ogden’s strained attempt to recast his memo as an
exercise in whistle-blowing is unpersuasive. Ogden
explicitly described his memo as a “formal request to
have the Title Insurance Division removed from the
Consumer Protection Unit and to operate as a direct
report or under a different Chief Deputy.” The specific
“whistle-blowing” allegations that Ogden now relies on
to fit himself within Garcetti’s requirement of private-
citizen speech were part and parcel of the rationale
he offered “in support of this request” for departmental
reorganization. That is, everything in the memo was
calculated to achieve the stated objective of removing
the Title Insurance Division from the Consumer
Protection Unit. It is true that three days before
sending his memo, Ogden met with officials in the
State Personnel Division in order to file a formal
complaint regarding Mihalik’s alleged hiring violations
and misuse of the title insurance fund. But his memo
neither references the disciplinary complaint against
Mihalik nor recommends that she be disciplined
or reprimanded in any other way. His memo was an
official request by a division manager, acting in that
capacity, asking for a departmental reorganization—no
more, no less. “Garcetti made clear that public employees
speaking pursuant to their official duties are speaking
as employees, not citizens, and thus are not protected
by the First Amendment regardless of the content of
their speech.” Spiegla v. Hull, 481 F.3d 961, 965 (7th Cir.
No. 09-2953                                                    11

2007) (quotation marks omitted). Ogden’s memo was the
act of a public employee acting as a public employee, not
a concerned citizen.2
  Finally, Valentino is of no help to Ogden. The municipal
employee in Valentino confided in a member of the public
about her concerns that the local mayor was rewarding
friends and family with suspect jobs in her department.
We held that this speech—which led to a FOIA request
and a complaint from a public-interest group—was
constitutionally protected. 575 F.3d at 671-72. Ogden’s
situation is completely different. His memo was an
internal, formal request to his ultimate supervisor asking
that his department be reorganized. It did not purport
to expose or remedy injustices of public importance; its
aim was to persuade Atterholt that Mihalik was an
unsuitable supervisor of Ogden’s division and convince
him to remove the division from her control. Accordingly,

2
  In arguing that at least portions of his memo must be consid-
ered protected speech, Ogden focuses on Mihalik’s tacit admis-
sion that some of the accusations leveled in the memo involved
areas outside Ogden’s stated job description. While a formal job
description may be of some use in discerning when a public
employee is speaking pursuant to his official duties, it is hardly
dispositive. An employee’s “official responsibilities” can easily
extend well beyond “core” job functions. See Spiegla, 481 F.3d
at 966. The “official responsibility” inquiry requires a more
commonsense, contextual analysis of the role the public em-
ployee assumed in making the speech at issue in the case. See
Garcetti, 547 U.S. at 424-45.
12                                               No. 09-2953

Ogden’s speech was not constitutionally protected, and
summary judgment dismissing the First Amendment
claim was appropriate.
  We are left with one final housekeeping item. On appeal
Ogden has expressed a concern that the magistrate judge’s
resolution of the due-process claim in favor of the
defendants might foreclose litigation of that claim in
the Indiana courts. As we have noted, Ogden clarified
in his reply brief and at oral argument that his due-
process claim is based entirely on state law; as such, once
the federal free-speech claim was resolved against him,
the due-process claim should have been included in the
order remanding the state claims to the Indiana court.
The magistrate judge should not have taken up and
resolved the due-process claim as if it arose under
federal law—though it was understandable why she
did so given the confusion in the pleadings. That claim
now returns to state court along with Ogden’s other state
claims.
   With this clarification, the judgment of the district court
is A FFIRMED.

                            5-18-10