Court Opinion

ID: 158084
Source: CourtListenerOpinion
Date Created: 2010-08-14 05:12:24+00
Date Added: 2024-06-11T09:41:19.345788
License: Public Domain

F I L E D
                                                               United States Court of Appeals
                                                                       Tenth Circuit

                                                                       JUN 15 1999
                                    PUBLISH
                                             PATRICK FISHER
                 UNITED STATES COURT OF APPEALS   Clerk
                          TENTH CIRCUIT

 DAVID PRAGER, III,

          Plaintiff-Appellee,

 v.
                                                         No. 98-3116
 JOHN D. LaFAVER, Secretary of the
 Kansas Department of Revenue, In His
 Personal Capacity,

          Defendant-Appellant,

                     Appeal from the United States District Court
                              for the District of Kansas
                            (D.C. No. 97-CV-4216-DES)

Thomas V. Murray (Cheryl L. Jackson and Terence E. Leibold, with him on the
briefs) of Barber, Emerson, Springer, Zinn & Murray, L.C., Lawrence, Kansas,
for Defendant-Appellant.

Alan V. Johnson of Sloan, Listrom, Eisenbarth, Sloan & Glassman, L.L.C.,
Topeka, Kansas, for Plaintiff-Appellee.

Before SEYMOUR, Chief Judge, MAGILL, * and EBEL, Circuit Judges.

SEYMOUR, Chief Judge.

      *
       The Honorable Frank J. Magill, Senior United States Circuit Judge,
United States Court of Appeals for the Eighth Circuit, sitting by designation.
      John LaFaver, the Secretary of the Kansas Department of Revenue, fired

David Prager, III, a former attorney with that organization, after Mr. Prager wrote

several letters critical of the Department to Governor William Graves. Mr. Prager

sued Mr. LaFaver for depriving him of his First and Fourteenth Amendment rights

in violation of 42 U.S.C. § 1983. Mr. LaFaver filed a motion to dismiss based on

qualified immunity and attached several documents thereto, including a letter

from Mr. Prager to the Governor and several letters from Mr. LaFaver to Mr.

Prager. The district court refused to consider the additional materials and treated

defendant’s motion as a motion to dismiss under Fed.R.Civ.P. 12(b)(6). It denied

the motion as to the First Amendment claim and granted the motion with leave to

amend as to the Fourteenth Amendment claim. Mr. LaFaver appeals, claiming

that the district court erred by refusing to consider the materials appended to his

motion to dismiss, and by denying him qualified immunity. We affirm.

                                          I.

      Mr. Prager was employed as senior tax attorney with the Kansas

Department of Revenue. 1 In that capacity, he believed that the Department of

      1
        Because this appeal arises from a motion to dismiss pursuant to rule
12(b)(6), we accept all well-pleaded factual allegations in the complaint as true,
and view them in the light most favorable to the nonmoving party. GFF Corp. v.

                                         -2-
Revenue was erroneously interpreting a Kansas statute, resulting in a significant

illegal tax abatement to a corporation. On October 31, 1996, he wrote a

memorandum to his supervisor, Richard Oxendale, General Counsel for the

Department of Revenue, analyzing the legal issue, explaining the mistake, and

requesting a meeting with Mr. Oxendale and Mr. LaFaver to discuss the matter.

Mr. Oxendale never arranged the requested meeting.

      On December 18, 1996, Mr. Prager sent a letter to Governor Graves

discussing several problems within the Department of Revenue. He asserted that

a tax abatement in a well-publicized case involving La Siesta Foods, Inc. was

illegal. 2 He also addressed the role of political influence in the Department of

Revenue’s administrative process. Finally, he discussed the public’s negative

perception of the Department.

      Because of this letter, Mr. LaFaver wrote to Mr. Prager on January 8, 1997,

suspending him from his employment with pay. Mr. LaFaver opened by saying, “I

am in receipt of your unfortunate correspondence to the Governor regarding an

array of tax issues at the Department of Revenue.” Aplt. App. at 3. He

continued, “That you chose to send such a letter to the Governor without

discussing it with the General Counsel or me reflects poorly upon your judgment

Associated Wholesale Grocers, Inc., 130 F.3d 1381, 1384 (10th Cir. 1997).
      2
        Mr. Prager’s October memorandum to Mr. Oxendale did not pertain to
the La Siesta Food abatement.

                                         -3-
and your willingness and ability to work as member of this team.” Id. Mr. Prager

appealed his suspension, claiming that Mr. LaFaver retaliated against him for

reporting the illegal tax abatement, thereby violating Kan. Stat. Ann.§ 75-2973

(West 1996 Supp.), the Kansas whistle-blower statute.

      In March 1997, Mr. Prager wrote another letter to Governor Graves

expressing the concerns voiced in the October 1996 memorandum to Mr.

Oxendale. He sent copies to Mr. LaFaver and Mr. Oxendale. Mr. LaFaver

responded on May 9 advising Mr. Prager that he would be terminated from his

employment with the Department of Revenue effective May 16. After his

termination, Mr. Prager filed this action.

                                             II.

      We must first address whether the district court is required to consider

materials that a defendant attaches to his motion to dismiss. Mr. LaFaver

attached Mr. Prager’s December 18 letter to Governor Graves and Mr. LaFaver’s

January 8, May 9, May 16, and July 30 letters to Mr. Prager. Mr. LaFaver did not

attach Mr. Prager’s October 31 memorandum to Mr. Oxendale nor his March 17

letter to the Governor. The district court refused to consider any of the attached

materials, deciding the motion on the basis of the complaint and answer.

                                         -4-
      Mr. LaFaver asserts that the court was required to consider the documents

attached to its rule 12(b)(6) motion, and that its failure to do so constitutes

reversible error. Specifically, he argues that because Mr. Prager referred to and

quoted from several of the letters in the complaint, those material should be

considered part of the pleadings. Mr. LaFaver recognizes that some of the

attached letters were not referenced in Mr. Prager’s complaint but contends that

those materials are necessary to “complete the entire documentation surrounding

the termination.” Aplt. Br. at 12 n.8.

      Mr. LaFaver primarily relies on GFF Corp. v. Associated Wholesale

Grocers, Inc., 130 F.3d 1381 (10th Cir. 1997), to support this argument. In GFF

Corp., this court upheld the district’s court consideration of a letter that the

plaintiff alleged satisfied the statute of frauds but did not attach to its amended

complaint. Id. at 1385. We noted that, in general, a motion to dismiss should be

converted to a summary judgment motion if a party submits, and the district court

considers, materials outside the pleadings. Id. at 1384. 3 We then continued:

      3
          In fact, Fed.R.Civ.P. 12(b) specifically provides:
               If, on a motion asserting the defense numbered (6) to
               dismiss for failure of the pleading to state a claim upon
               which relief can be granted, matters outside the pleading
               are presented to and not excluded by the court, the
               motion shall be treated as one for summary judgment
               and disposed of as provided in Rule 56, and all parties
               shall be given reasonable opportunity to present all
               material made pertinent to such a motion by Rule 56.

                                          -5-
      Notwithstanding these general principles, if a plaintiff does not
      incorporate by reference or attach a document to its complaint, but
      the document is referred to in the complaint and is central to the
      plaintiff’s claim, a defendant may submit an indisputably authentic
      copy to the court to be considered on a motion to dismiss.

Id.; see also Wright v. Associated Ins. Cos. Inc., 29 F.3d 1244, 1248 (7th Cir.

1994) (noting that documents are not “outside the pleadings” if they are “referred

to in the plaintiff’s complaint and are central to his claim”).

      We find nothing in GFF Corp. that requires the district court to consider

the materials Mr. LaFaver attached to his motion. We agree that GFF Corp.

supports the proposition that the district court could have considered those

documents Mr. Prager referred to in his complaint which were central to his claim

without converting Mr. LaFaver’s motion into one for summary judgment.

Nevertheless, GFF Corp. did not purport to decide whether consideration of

materials appended to a motion to dismiss is mandatory or discretionary.

Numerous other circuits use language indicating district court’s have discretion in

deciding whether to consider such materials. See, e.g., Brooks v. Blue Cross and

Blue Shield of Florida, 116 F.3d 1364, 1369 (11th Cir. 1997) (“[W]here the

plaintiff refers to certain documents in the complaint and those documents are

central to the plaintiff’s claim, then the Court may consider the documents part of

the pleadings for purposes of Rule 12(b)(6) dismissal . . . .”) (emphasis added);

Wright, 29 F.3d at 1248 (“[D]ocuments attached to a motion to dismiss [that] are

                                          -6-
referred to in the plaintiff’s complaint and . . . central to his claim . . . may be

considered by a district court ruling on the motion to dismiss.”) (emphasis added);

Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994) (“[W]e hold that documents

whose contents are alleged in a complaint and whose authenticity no party

questions, but which are not physically attached to the pleading, may be

considered in ruling on a 12(b)(6) motion to dismiss.”) (emphasis added); Pension

Benefit Guar. Corp. v. White Consol. Indus. Inc., 998 F.2d 1192, 1196 (3d Cir.

1993) (“We now hold that a court may consider an undisputedly authentic

document that a defendant attaches as an exhibit to a motion to dismiss if the

plaintiff’s claims are based on that document.”) (emphasis added); Cortec Indus.,

Inc. v. Sum Holding L.P., 949 F.2d 42, 48 (2d Cir. 1991) (“[T]hough the district

court . . . declined to consider these exhibits, it could have viewed them on the

motion to dismiss because there was undisputed notice to plaintiffs of their

contents and they were integral to plaintiff’s claim.”) (emphasis added). We

agree with our sister circuits that if a defendant attaches to a 12(b)(6) motion

materials referred to by the plaintiff and central to his claim, the court has

discretion to consider such materials.

      Here, the district court acted well within its discretion in declining to

consider the documents attached to Mr. LaFaver’s motion to dismiss. The

attachments were both over-inclusive and under-inclusive. While Mr. LaFaver

                                           -7-
appended several documents referenced in Mr. Prager’s complaint, he excluded

two others, namely the October 31 memorandum to Mr. Oxendale and the March

17 letter to Governor Graves. In addition, Mr. LaFaver attached two documents,

the letters of May 16 and July 30, that Mr. Prager did not refer to in his

complaint. Given that state of the record, it was reasonable for the district court

to decide the motion without consideration of any of the appended materials.

                                         III.

      We now turn to the merits of Mr. LaFaver’s motion to dismiss on the basis

of qualified immunity. We review a district court’s decision to grant or deny a

motion to dismiss de novo. See GFF Corp., 130 F.3d at 1384. A defendant may

immediately appeal the denial of a 12(b)(6) motion based on qualified immunity

to the extent that denial turns on an issue of law. See Behrens v. Pelletier, 516

U.S. 299, 307 (1996). 4

      “Under the doctrine of qualified immunity, ‘government officials

performing discretionary functions generally are shielded from liability for civil

      4
        Mr. Prager contends we lack subject matter jurisdiction over the qualified
immunity appeal because the district court merely held there were fact issues
precluding a dismissal. See Johnson v. Jones, 515 U.S. 304, 313-14 (1995). We
disagree. For the reasons set out infra, this appeal involves issues of law.

                                          -8-
damages insofar as their conduct does not violate clearly established statutory or

constitutional rights of which a reasonable person would have known.’” Ramirez

v. Oklahoma Dept. of Mental Health, 41 F.3d 584, 592-93 (10th Cir. 1994)

(quoting Harlow v. Fitzgerald, 457 U.S. 800, 818 (1994)); see also Workman v.

Jordan, 958 F.2d 332, 336 (10th Cir. 1992) (“If [defendants’] actions are those

that a reasonable person could have believed were lawful, defendants are entitled

to dismissal before discovery.”). Qualified immunity protects government

officials from being subjected to the burdens of discovery and trial in meritless

cases. See Harlow, 457 U.S. at 818.

      Mr. LaFaver contends the law did not clearly establish that the First

Amendment protected Mr. Prager’s speech. Pickering v. Board of Educ., 391

U.S. 563 (1968), and its progeny set forth the applicable framework for

determining the First Amendment rights of public employees like Mr. Prager. See

Moore v. City of Wynnewood, 57 F.3d 924, 931 (10th Cir. 1995). Under this

framework, we must first decide whether the employee’s speech may be “fairly

characterized as constituting speech on a matter of public concern.” Connick v.

Myers, 461 U.S. 138, 146 (1983). We determine this “by the content, form, and

context of a given statement, as revealed by the whole record.” Id. at 147-48. If

the speech addressed a matter of public concern, we must next balance the

employee’s “interest in making [his] statement against ‘the interest of the State,

                                         -9-
as an employer, in promoting the efficiency of the public services it performs

through it employees.’” Rankin v. McPherson, 483 U.S. 378, 388 (1987) (quoting

Pickering, 391 U.S. at 568). These two steps in the inquiry present legal issues

to be resolved by the court. See Gardetto v. Mason, 100 F.3d 803, 811 (10th Cir.

1996). 5

       We first address whether Mr. Prager’s speech touched on matters of public

concern. “Speech which discloses any evidence of corruption, impropriety, or

other malfeasance on the part of [public] officials, in terms of content, clearly

concerns matter of public import.” Conaway v. Smith, 853 F.2d 789, 796 (10th

Cir. 1988); see also Considine v. Board of County Comm’rs, 910 F.2d 695, 700

(10th Cir. 1990) (discussing Tenth Circuit cases in which whistle blowing activity

was held to touch on matters of public concern); cf. Ramirez, 41 F.3d at 595. We

must discern “whether the speech was calculated to disclose misconduct or dealt

with only personal disputes and grievances with no relevance to the public

interests.” Conaway, 853 F.2d at 796.

       Mr. Prager’s letters discussed illegal tax abatements, the pervasive effect of

political influence in the state tax system, and the negative perception of the

       5
        The final two steps, whether the protected speech was a substantial or
motivating factor in the decision, and whether the employer would have reached
the same decision absent the protected conduct, present questions of fact to be
resolved by the jury, Gardetto, 100 F.3d at 811, and we do not consider them
here.

                                        -10-
Department of Revenue. All of these issues, and in particular Mr. Prager’s

disclosure of governmental corruption, relate to matters of “political, social or

other concern to the community.” Connick, 461 U.S. at 146; see also Conaway,

853 F.2d at 796-97. Under the clearly established law of this circuit, Mr. Prager’s

speech, as described by this record, touched on matters of public concern.

      We must next engage in the Pickering balancing test, weighing the

employee’s right to speak on matters of public concern against government-

employer’s interest in efficiency. 391 U.S. at 568. “When balancing the rights of

the employee against those of the employer, an employee’s First Amendment

interest is entitled to greater weight where he is acting as a whistle blower in

exposing government corruption.” Conaway, 853 F.2d at 797. In evaluating the

employer’s interest, courts consider “whether the statement impairs discipline by

superiors or harmony among co-workers, has a detrimental impact on close

working relationships for which personal loyalty and confidence are necessary, or

impedes the performance of the speaker’s duties or interferes with the regular

operation of the enterprise.” Rankin, 483 U.S. at 388. Nevertheless, an

employee’s speech will not be left unprotected simply because his “whistle

blowing might jeopardize the harmony of the office or tarnish the integrity of the

department.” Conaway, 853 F.2d at 798; see also Ramirez, 41 F.3d at 595.

Speculative assertions of workplace disruption are also insufficient, see Wulf, 883

                                         -11-
F.2d at 862; rather, the employer must show “‘actual disruption of services which

results from the employee[s’] speech.’” Ramirez, 41 F.3d at 594 (quoting Schalk,

906 F.2d at 496).

      On this record, we must balance Mr. Prager’s constitutional right to expose

governmental misconduct against little evidence of governmental disruption. Mr.

Prager’s whistle blowing activity is entitled to substantial weight. See Conaway,

853 F.2d at 797.    The only hint of governmental disruption comes from brief

portions of Mr. LaFaver’s letters quoted in the complaint. In the May 9

termination letter, Mr. LaFaver stated that Mr. Prager’s insubordination and

disclosure of privileged material, inter alia, “caused undue disruption of the

normal operation and proper functioning of this Department.” Aplt. App. at 5.

Given that Mr. Prager’s letters accused Mr. LaFaver of granting an illegal tax

abatement, it is unsurprising that it created office tensions; however, that in itself

does not render Mr. Prager’s speech unprotected. See Conaway, 853 F.2d at 798;

cf. Wulf, 883 F.2d at 862 (“In sum, there is simply insufficient evidence that the

letter itself interfered with effective functioning of the police department. Rather

the evidence supports the conclusion that Wulf’s letter was seeking to rectify

malfunctions already present in the department.”). Moreover, to the extent the

complaint alleges that Mr. LaFaver hid his true motivation for suspending and

terminating Mr. Prager behind the guise of promoting efficiency, we must accept

                                          -12-
that contention as true. We also note that Mr. Prager kept his speech within the

Kansas state government, and did not speak to the press or public. Cf. Conaway,

853 F.2d at 797-98. Not surprisingly, Mr. Prager’s First Amendment right

outweighs unsubstantiated claims of governmental disruption.

      We turn to the question of whether this law was clearly established when

Mr. LaFaver acted against Mr. Prager. We recognize “a rule of law determined

by a balancing of interests is inevitably difficult to clearly anticipate.” Melton v.

City of Oklahoma City, 879 F.2d 706, 729 (10th Cir. 1989), overruled on other

grounds, 928 F.2d 920 (10th Cir. 1991) (en banc). Nevertheless, “to the extent

that courts in analogous (but not necessarily factually identical) cases have struck

the necessary balance, government officials will be deemed ‘on notice.’” Id. n.36.

Our decisions in Conaway, 853 F.3d at 797, and Ramirez, 41 F.3d at 595, clearly

established that an employee’s strong interest in disclosing governmental

corruption outweighs unsubstantiated assertions of workplace disruption, and put

Mr. LaFaver on notice that the conduct alleged in Mr. Prager’s complaint would

violate the law. We therefore hold the law was clearly established in Mr. Prager’s

favor at the time Mr. LaFaver suspended and terminated him.

                                         -13-
                                      IV.

       We AFFIRM the district court’s denial of Mr. LaFaver’s motion to

dismiss. 6

       We note that Mr. LaFaver may raise the issue of qualified immunity again
       6

on a motion for summary judgment after the record is more developed. See
Ramirez v. Oklahoma Dept. of Mental Health, 41 F.3d 584, 595 (10th Cir. 1994);
Workman v. Jordan, 958 F.2d 332, 336 (10th Cir. 1992).

                                      -14-