Court Opinion

ID: 2753108
Source: CourtListenerOpinion
Date Created: 2014-11-19 18:00:37.620203+00
Date Added: 2024-06-11T10:18:55.767038
License: Public Domain

NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                            FOR THE THIRD CIRCUIT
                                 ___________

                                       No. 14-1013
                                       ___________

                              CURTIS M. HERMAN;
                         AUSTIN JAMES ASSOCIATES, INC.,
                                                                    Appellants,

                                             v.

                        STEVEN J. HARMAN;
  UNDERGROUND STORAGE TANK INDEMNIFICATION BOARD MEMBERS;
             KERRY L. YOUNDT; ICF INCORPORATED, LLC;
         MICHAEL F. CONSEDINE; E. CHRISTOPHER ABRUZZO;
      W. MICHAEL SMITH; E. BRUCE SHELLER; J. STEPHEN HIEBER;
    LARRY T. MORTON; NANCY MARICONDI; STEPHANIE C. WISSMAN
                ____________________________________

                     On Appeal from the United States District Court
                         for the Middle District of Pennsylvania
                         (D.C. Civil Action No. 3-13-cv-01118)
                      District Judge: Honorable James M. Munley
                      ____________________________________

                       Submitted under Third Circuit LAR 34.1(a)
                                   October 31, 2014

   Before: MCKEE, Chief Judge, GREENAWAY, JR. and KRAUSE, Circuit Judges

                               (Filed: November 19, 2014)

                                        OPINION*

       *
        This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7
does not constitute binding precedent.
KRAUSE, Circuit Judge.

       During the period relevant to this appeal, Curtis M. Herman and Austin James

Associates, Inc. (collectively “Appellants”) were government contractors who evaluated

claims, provided litigation support, developed strategy on major projects, and provided

expert opinions on technical and budgetary questions for Pennsylvania’s Underground

Storage Tank Indemnification Fund (the “Tank Fund”), a state agency that provides

payments to owners of underground storage tanks to remediate releases of hazardous

substances.1 Appellants challenge the dismissal of their First Amendment retaliation

claim, which stems from the non-renewal of their contract by the Tank Fund. We affirm

because the speech at issue did not address a matter of public concern and thus was not

constitutionally protected.2

       The controversy here emanates from gasoline leaks at a station run by Leroy and

Mary Musser. In September 2003, the Mussers contracted with Appellants to remediate

the site of a 1997 fuel leak. Later that month, the Mussers and the Tank Fund reached a

final settlement and release agreement that included a $1.208 million payment to fund

       1
          Appellants were technically subcontractors hired by ICF, Inc., the Tank Fund’s
third party administrator responsible for investigating all Tank Fund claims. The Tank
Fund authorized ICF, Inc. to hire firms like Appellants’ to investigate claims and provide
technical services. The contractor/subcontractor distinction, however, is not pertinent to
our analysis. For ease of reference, we refer to Appellants as “government contractors”
who contracted directly with the Tank Fund.
        2
          We have jurisdiction to hear the appeal under 28 U.S.C § 1291. Our review of a
district court’s decision to grant a motion to dismiss is plenary. Spruill v. Gillis, 372 F.3d
218, 226 (3d Cir. 2004). Because we write for the parties, we recite only those facts
necessary to our conclusion.
                                               2
remediation; the Mussers distributed this payment to Appellants. Eight years later, the

Mussers filed another claim with the Tank Fund, ostensibly for a 1999 leak at their

station, with an estimated additional remediation cost of approximately $1 million. The

Tank Fund denied the new claim, finding that it was included in the 2003 release. The

Mussers appealed.

       While the Mussers technically filed the claim and appeal, Appellants actually

funded and prosecuted them after determining that fully remediating the Mussers’ site

was going to be significantly more expensive than provided for in their 2003 contract.

Appellants pursued the claim despite a conflict-of-interest provision in their contract with

the Tank Fund, which prohibited Appellants from “representation of a client in regard to

a claim against [the Tank Fund] on a release.”3 As a result, the Tank Fund did not renew

Appellants’ contract.

       “In order to plead a retaliation claim under the First Amendment, a plaintiff must

allege: (1) constitutionally protected conduct, (2) retaliatory action sufficient to deter a

person of ordinary firmness from exercising his constitutional rights, and (3) a causal link

between the constitutionally protected conduct and the retaliatory action.”4 This

protection shields government contractors from adverse employment actions that result

       3
        App. 182a.
       4
        Thomas v. Independence Twp., 463 F.3d 285, 296 (3d Cir. 2006) (citing Mitchell
v. Horn, 318 F.3d 523, 530 (3d Cir. 2003)).
                                            3
from speech on matters of public concern.5 We use a three-part test to determine whether

speech by government contractors is constitutionally protected: (1) whether they were

speaking as citizens rather than as public contractors discharging their contractual duties;

(2) whether their speech “address[ed] a matter of public concern as opposed to a personal

interest;” and (3) whether the state had “an adequate justification for treating [them]

differently from any other member of the general public as a result of” their speech.6

       Appellants fail the second and third parts of our test. Speech is of public concern

when it is “fairly considered as relating to any matter of political, social, or other concern

to the community.”7 While there is, of course, a public interest in the ability of

businesses to apply to and then appeal the decision of a state agency without

repercussion, it is of no public concern that a contractor of that agency—whom the

agency relies upon for litigation support and other expertise—funds and prosecutes a

million-dollar claim against the agency on behalf of its private client. Here, the Mussers

could have pursued their claim without Appellants prosecuting it for them, and

       5
          Bd. of Cnty. Comm’rs, Wabaunsee Cnty., Kan. v. Umbehr, 518 U.S. 668, 674-75,
684-85 (1996).
        6
          Montone v. City of Jersey City, 709 F.3d 181, 193 (3d Cir. 2013) (internal
quotation marks omitted).
        7
          Connick v. Myers, 461 U.S. 138, 146, 148 (1983) (no matter of public concern
against District Attorney when employee’s complaints “did not seek to inform the public
that the District Attorney’s office was not discharging its governmental responsibilities”
and did not “seek to bring to light actual or potential wrongdoing or breach of public trust
on the part of [the District Attorney] and others”); Gorum v. Sessoms, 561 F.3d 179, 187
(3d Cir. 2009) (“[Appellant’s] assistance . . . did not involve a matter of public concern.
Instead, his ‘speech’ during [a] disciplinary hearing related to the personal grievance of
one student.”).
                                               4
Appellants pleaded nothing that suggests that their speech exposed the Tank Fund as

being run contrary to the public interest. Moreover, the Tank Fund, a state agency that

provides seven-figure claim payments and relies on expert opinions to make decisions

about those claims, had ample justification for treating Appellants differently than

members of the public by hewing to a strong conflict-of-interest policy.8

       In sum, we conclude that while Appellants’ speech “manage[d] to brush ever so

gently against a matter of public concern,”9 it was the private contractual concern of a

business, which violated a sensible conflict-of-interest policy. Accordingly, the District

Court properly dismissed the First Amendment claim.

       8
         See Garcetti v. Ceballos, 547 U.S. 410, 419 (2006) (state employers may restrict
speech if such restriction allows them “to operate efficiently and effectively”); see also
Piscottano v. Murphy, 511 F.3d 247, 277 (2d Cir. 2007) (holding that avoiding actual or
perceived conflict of interest constitutes legitimate governmental interest).
       9
         Miller v. Clinton Cnty., 544 F.3d 542, 551 (3d Cir. 2008).
                                               5