Court Opinion

ID: 9541754
Source: CourtListenerOpinion
Date Created: 2023-08-07 16:28:23.144889+00
Date Added: 2024-06-11T15:04:36.630620
License: Public Domain

BISTLINE, Justice,
dissenting.
I.
The district court at one time ruled on a Rule 12(b)(6) motion that the plaintiffs had in some particulars failed to state a claim upon which relief could be granted, and as to their equal protection claim rule on it as a summary judgment motion. As the majority correctly points out, a complaint cannot be dismissed on a 12(b)(6) unless the “plaintiffs can prove no set of facts which would entitle them to relief” under their pleading, and such a dismissal is not to be lightly entered, with all doubt resolved against the movant. The district court’s denial is contained in a scholarly and thorough memorandum decision.
An initial problem with the district court’s decision in this case, however, is that it purports to be, and is upheld for, what it is not. As rule 12(b) states:
“If on a motion asserting the defense number (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 [summary judgments], and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.”
The district court, and this Court in turn, appear to have ruled not on the basis of plaintiffs’ pleading, but on the basis of affidavits filed by the State which are said to “contain a history of the basis for appellant’s claim” and which are utilized as the basis for the dismissal. Unfortunately, such are not properly considered on a 12(b)(6) motion. The district court memorandum decision will be seen as closely paralleling the affidavit of Willard Abbott, R., pp. 33-34:
“Willard Abbott, being first duly sworn, deposes and states:
“1. That he is the acting Personnel Director, Idaho Department of Health and Welfare. He has been employed in the bureau for three years.
“2. That the Department Personnel Policies and Procedures Manual (hereafter, Manual) is not promulgated as a rule under the Administration Procedures Act nor is it represented to be a rule. Changes in the Manual are accomplished by simply deleting, adding or substituting sections upon the approval of the Director.
“3. The Manual constitutes the Department’s internal policies interpreting the Idaho Personnel Commission rules. It makes no attempt to set forth rights and procedures available to the public outside the agency. It’s intended use is to provide guidelines to the various organization units within the Department so that relatively uniform personnel policies will be followed.
“4. A majority of the individual policies contained in the Manual are not required by Idaho Personnel Commission rules. Only those individual policies listed in Idaho Personnel Commission Rules 7, 14, and 20 are required to be filed and/or approved by the Idaho Personnel Commission. With regard to reductions in force, only the layoff formula is required to be filed and approved by the Idaho Personnel Commission. Former sections 13AA and 13BB were not part of the layoff formula.”
*763Also filed and apparently considered by the district court was an affidavit by Thomas Puree, Director of the Department, outlining the reasons for the reorganization and giving his explanation as to why the policies had been changed and how the change was made. Appended to his affidavit was a copy of a memorandum dated May 21, 1981, which he had sent to Department heads outlining the new policy, which was made effective immediately.1 As is provided in Rule 12(b)(6), where such affidavits are considered, the motion shall be treated as one for summary judgment, and here appear to have been improperly considered. Giving consideration to this evidence, the district court nevertheless denied the plaintiffs an opportunity to obtain evidence supporting their own case. When the plaintiffs submitted written interrogatories to the State, they were met with a motion for a protective order. The plaintiffs also filed a motion to compel answers to interrogatories, request for sanctions, and notice of hearing, serving a subpoena duces tecum on Mr. Puree. Following hearing on pending motions, the court refused to compel any discovery, thus precluding the plaintiffs from developing their case. On a summary judgment ruling, which in totality was what occurred, both parties are entitled to have the opportunity to obtain affidavits, take depositions, and all other evidence they can muster in support of their position. Here, however, the court entered its summary judgment ruling after having denied the plaintiffs the opportunity to support their claims. It is to be kept in mind that Idaho has adopted notice pleading. Accordingly, discovery should not be so hampered. I do not say, nor am I called upon, to even suggest that the plaintiffs are entitled to prevail on the claims stated in their complaint but only that they should have the opportunity to fortify their pleadings, especially where it appears that they may have been disadvantaged, and the defendants were not.
II.
The majority finds that the Department’s employee Manual “does not have the force and effect of law, [and that] no cause of action can be based on its alleged violation, and [therefore] the trial court was correct in dismissing appellant’s cause of action based on a violation of the manual.” The majority fails to consider this Court’s unanimous decision in Loebeck v. Idaho State Board of Education, 96 Idaho 459, 530 P.2d 1149 (1975), cited in appellant’s brief, in which this Court remanded to the trial court to determine whether an employee handbook vested any rights in the plaintiff as part of her employment contract. The employee handbook in that instance did not have the force and effect of law but nevertheless was considered by this Court as capable of vesting rights in employees: “[T]he trial court made no finding of fact regarding the applicability of the 1967 Faculty and Staff Handbook to the contract rights of the appellant. The case will be remanded to the trial court for such a finding of fact.” Id. at 463, 530 P.2d 1149. That case suggests that a handbook need not have the force and effect of law in order to vest rights in employees. Whether the Department Manual did so would seem to be a question of fact to be determined by the trier of fact, not by the district court on a 12(b)(6) motion.
III.
The majority determines that the Department’s Manual did not constitute a rule pursuant to I.C. § 67-5203 which provides that “No rule hereafter adopted is valid unless adopted in substantial compliance with this section.” The majority states that “The record is clear that the policies and procedures manual of the Department, which appellant alleges was violated by the Step D Policy, was not promulgated pursuant to the procedural requirements of I.C. § 67-5203.” How the record can be said to be that clear on a 12(b)(6) motion is difficult to comprehend, although admittedly I may be here missing the theme of the majority *764opinion. This seems to be a factual determination, where properly that which ought to be considered in passing such a motion is whether the complaint, under any reading, sets out a claim upon which relief can be granted. Whether the manual was promulgated pursuant to I.C. § 67-5203, constitutes a question of fact. When read most favorably to the plaintiffs, it should be considered that the Manual does constitute a rule and then the inquiry is whether under any set of facts, plaintiffs could possibly prevail in an action for violation thereof — not forgetting, of course, that the plaintiffs were denied the discovery which they were pursuing as a proper expansion of the pleadings, the State having not been so precluded.
The majority, having determined that the Manual was not promulgated pursuant to the Administrative Procedures Act, then makes the quantum leap (borrowing from the recent language of another Notice) in logic to declare that, not being a rule, “the procedures and policies manual provides only guidelines for the internal management of the Department ‘not affecting private rights or procedures available to the public.’ ” If this is the error I believe it to be, and perhaps even if it is not, it is compounded by the holding that, because it is not a rule it cannot be said to affect private rights or procedures available to the public. I.C. § 67-5201 excepts from the definition of rules “statements concerning only the internal management of any agency and not affecting private rights or procedures available to the public.” This is not a provision that something which is not a rule, because of improper promulgation, necessarily falls within this entirely separate exception to the definition of rule. Whether or not this is a rule, which determination should be made by the trier of fact, it seems evident that the Manual does indeed affect the private rights of the Department employees.
IV.
I am also troubled by what appears to be a finding, made at this level, that because of a declared failure of exhaustion of administrative remedies, an action in the district court cannot be brought. This issue was not raised in the State’s answer to the complaint, the answer alleging but three specific defenses; (1) failure to state a claim; (2) good faith action which precludes judgment rendered against Mr. Puree in his individual capacity; and (3) reorganization was mandated by the legislature. On a reading of plaintiffs’ complaint most strongly in favor of plaintiffs, the district court properly would not have considered that the plaintiffs could not come to court without having exhausted their administrative remedies, that is, unless it is clearly a question of jurisdiction which cannot be waived. As is most often the case, it is the attorneys and the district court who will invariably have a far better understanding of the controversy than an appellate court the members of which do not always find the time to peruse each and every brief as closely as might be desired. This Court, then, may be going awry, and in particular might pause to consider the following statement in appellant’s brief:
“What is especially ironic about the District Court’s decision in this regard is that Mr. Ackerman did exhaust his administrative remedies. Even in the fact of the obvious futility of trying to resolve this matter through a grievance, Mr. Ackerman filed a grievance with the Department of Health and Welfare and processed it to its unsuccessful conclusion. This is undoubtedly why the Defendants did not raise the issue. Had it been raised by the Court at oral argument or by the Defendants, Plaintiffs could have responded. However, because the issue was never raised before the issuance of the decision, Plaintiffs never met the issue and there is nothing in the record concerning Mr. Ackerman’s exhaustion.”
Appellant’s Brief, pp. 32-33.
In sum, if the Court is to affirm the disposition made below, it would be better done on the basis of adopting the district court’s memorandum decision — but even then only if we can find ourselves per*765suaded that the denial of discovery to the plaintiffs could not in any way prejudice the plaintiffs on the defendant’s motions. Dismissal without trial are generally not favored. I do not readily recollect a case from this Court upholding a dismissal where the plaintiff was denied the opportunity to, at his own expense, expand his complaint — a notice pleading only.
APPENDIX
County of Ada ) ) ss State of Idaho )
CASE NO. 76043
AFFIDAVIT OF THOMAS L. PURCE
COMES NOW Thomas L. Puree, being first duly sworn, deposes and states;
1. That he is the Director, Idaho Department of Health and Welfare.
2. That he made the final decision regarding the reorganization of the Department of Health and Welfare which occurred in May and June, 1981.
3. That the above mentioned reorganization was necessitated by various enactments of the 1981 Idaho Legislature which drastically reduced personnel funding available to the agency, reduced the number of authorized employees and underfunded employee pay increases.
4. That the primary reason for the Department policy that demoted employees would not be paid at a higher step than Step D in the new pay grade is that employees performing the same work should receive the same salary as set forth in his memorandum of May 21, 1981, which is attached and incorporated by reference.
5.That the secondary reason for the above-mentioned policy was that it would save personnel funds and therefore employee jobs. Given a finite and reduced personnel budget, the Department would have been forced to lay off additional employees to fund full salary protection for those employees who took involuntary demotions. Further layoffs would have further decreased the Department’s ability to deliver its services to the citizens of Idaho.
DATED this 7th day of October, 1981.
/s/ Thomas L. Puree Thomas L. Puree
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DEPARTMENT OF HEALTH AND WELFARE
Statehouse Boise, Idaho 83720
May 21, 1981
MEMORANDUM
TO: Division Administrators, Regional Directors, Institutional Administrative Directors and All Holders of Department Personnel Policies and Procedures Manuals
FROM: Thomas L. Puree
SUBJECT: Policy Revision: Salary Treatment In Non-Disciplinary And Disciplinary Demotions
Effective immediately the Department’s policy with regard to salary treatment for employees who are demoted to a classification with a lower entrance pay grade for non-disciplinary or disciplinary reasons is being revised to reflect that employees can*766not be given salary protection exceeding Step D of the pay grade assigned.
The decision to revise our policy was not made in undue haste and comes as a result of recommendations of the Performance Evaluation Task Force.
Under Hay System philosophy, and the pay for performance statute, the seven pay steps become a yardstick of employee performance, with Step D representing the journeyman, or fully effective working level, of the classification. The Personnel Commission is conducting their salary surveys using Step D as a benchmark for conducting their surveys. Therefore, Step D can be considered the highest attainable Step a fully competent employee can aspire to, barring unforeseen budget constraints. Steps E, F and G are therefore attainable through superior work performance.
I am committed to maintaining internal pay equity through equal pay for equal work. This concept cannot be achieved nor maintained if we continue to allow employees to demote from higher paying, more responsible classifications to lower paying, less responsible classifications at salaries (Step E or higher) higher than journeyman level employees in the lower classification. While I.realize the decrease in salary is unfortunate for the employee being demoted, it would be equally unfortunate for the incumbent in the lower classification to do the same work for less pay than the demoted employee, who under our former policy, could make 10-20%' more pay for doing the same level of work.
INSTRUCTIONS TO HOLDERS OF DEPARTMENT POLICIES AND PROCEDURES MANUALS:
Remove current Page 4-6 from Chapter Four (4) of the Manual and insert attached corresponding Page 4-6.
If you have any questions contact Jerry Armstrong of Phyllis Blunck in the Bureau of Personnel.
Thomas L. Puree Thomas L. Puree Director
DH&W Personnel Policies and Procedures _ 4-6
the minimum qualifications, the employee’s salary will be reduced to the grade and step that it was immediately prior to promotion.
B. Unsatisfactory service will not count for length of service credit in determining employee performance in layoff. (See Page 3-11 for policy).
20. DEMOTIONS: NON-DISCIPLINARY AND DISCIPLINARY
(Effective 5-21-81)
Any demotion in employment status can be an unfortunate experience, but it may happen and can be made under certain circumstances. When demotions do occur, they shall be administered uniformly and consistently according to the Department’s policy. A demotion is defined as a reduction of an employee from a position he occupies in one classification to a position in another classification with a lower entrance salary in which he/she meets the minimum qualifications or has held permanent status.
POLICY
A. NON-DISCIPLINARY DEMOTION — When an employee is demoted for non-disciplinary reasons, the employee’s salary shall be adjusted to a step, up to step D maximum, (effective 5-21-81), within the lower pay grade with which it most nearly (effective 5-21-81) coincides; OR, to a lower step in the lower pay grade as agreed upon IN WRITING by the affected employee, immediate supervisor, and appropriate Division Administrator, Regional Services Manager (effective 5-18-81), or Institutional Administrative Director.
This does not apply to downgrade reclassifications as a result of a classification study (effective 5-21-81).
*767B. DISCIPLINARY DEMOTION—
When an employee is demoted for disciplinary reasons, the employee’s salary may be adjusted to a step, up to step D maximum (effective 5-21-81) within the lower pay grade depending upon the severity of the performance or action which gave rise to the disciplinary demotion.
C. In either case of demotion above, employees cannot be given salary protection to exceed step D (effective 5-21-81) for the pay grade assigned.

. Mr. Puree's affidavit is appended hereto.