McManus v . Cheshire County, NH CV-96-223-SD 11/24/97 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Patrick F. McManus

v. Civil N o . 96-223-SD

Cheshire County, New Hampshire

O R D E R

In this civil rights action, plaintiff Patrick F. McManus claims that defendant Cheshire County, New Hampshire, terminated his employment without due process of law. In addition, McManus claims that his termination by Cheshire County breached the employment contract and the state right-to-know laws, New Hampshire Revised Statutes Annotated (RSA) 91-A:3.

Facts

In January 1987 defendant Cheshire County hired plaintiff

McManus as the Nursing Home Administrator and Superintendent of

the Cheshire County Farm and Jail. McManus reported directly to

the Cheshire County Commissioners, who evaluated plaintiff's job

performance yearly. In 1992 the Commissioners began giving

plaintiff negative evaluations and continued to do so for several

years.

In early August 1995 the Commissioners met at a regularly scheduled meeting and made a decision to seek plaintiff's removal from his position. Plaintiff was never notified of the Commissioners' intent to discuss his termination at the August meeting. Later in the month of August, the Commissioners requested plaintiff's resignation. He declined, and further requested that the Commissioners provide him with written notice. On August 25 the Commissioners complied with plaintiff's request, providing him with written notice explicating the grounds and providing that his termination would be effective one month later, on September 2 5 , 1995.

Plaintiff requested a hearing before the personnel committee, as was his right under state law as a tenured employee. After a two-day evidentiary hearing that began in December 1995, the personnel committee found that there was good cause for plaintiff's termination. Plaintiff appealed to the New Hampshire Supreme Court, which affirmed without opinion.

Discussion

Plaintiff claims that defendant Cheshire County deprived

him of property without due process of law by terminating his

employment without first providing him an opportunity to be heard

in defense of his job. "The Due Process Clause of the Fourteenth

2 Amendment 'provides that certain substantive rights--life,

liberty, and property--cannot be deprived except pursuant to

constitutionally adequate procedures.'" Silva v . University of

N.H.,

(D.N.H. 1994) (quoting Cleveland Bd.

of Educ. v . Loudermill,

3 2 , 541 (1985)). Property

interests protected under the Due Process Clause are not created by the Constitution, but rather are defined by an independent

source such as state law. Board of Regents v . Roth,

(1972). RSA 28:10-a, I (1988) provides: “Any employee

of a county institution who has served at least one year shall

not be discharged, removed, or suspended from employment except

for [cause].” The United States Supreme Court has held that

state statutes that confer the right to continued employment

except upon removal for cause create a constitutionally protected

property interest. Loudermill, supra, 470 U.S. at 539. As a

tenured employee under RSA 28:10-a, McManus's interest in his job

constituted property protected under the Due Process Clause.

“An essential principle of due process is that a deprivation

of life, liberty, or property be preceded by notice and

opportunity for hearing appropriate to the nature of the case.”

Id. at 542 (internal quotations omitted). Under this principle,

this is an easy case, despite extensive argumentation from both

sides. The clear fact remains that McManus was denied any

3 opportunity to be heard in defense of his job until the formal

hearing held pursuant to state law RSA 28:10-a on December 2 1 ,

1995, almost three months after his termination became effective

on September 2 5 , 1995. However, a post-deprivation hearing is

not constitutionally adequate process by which to deprive a

public employee of his job. Loudermill, supra, 470 U.S. at 542 (finding due process violation despite post-termination hearing

because “an individual [must] be given an opportunity for a

hearing before he is deprived of any significant property

interest” (internal quotations omitted)). Since McManus was

given no hearing before his termination, Cheshire County deprived

him of his property interest in his job without due process of

law.

The court disagrees with defendant that plaintiff’s due

process claim is precluded by collateral estoppel, a doctrine

which prohibits relitigation of issues that were already

litigated and resolved in a prior action. Cheshire County argues

that the personnel committee's findings against McManus at the

close of the December 21 hearing have preclusive effect on

McManus's due process claim. However, the committee's findings

were limited, as the committee noted that its "sole task is to

determine whether good cause existed for the personnel action

taken by the Commission in discharging M r . McManus . . . .”

4 Decision of the Personnel Committee, Exhibit M attached to Defendant’s Motion for Summary Judgment at 3 . RSA 28:10-a grants the personnel committee limited authority to resolve the "just cause" issue, but does not grant general authority to decide all the claims an employee may have against the county. Thus the personnel committee’s limited finding that Cheshire County had sufficient "just cause" to terminate McManus has no preclusive effect on the unrelated due process issue in this case of whether plaintiff was terminated through constitutionally sufficient procedures.

The defendant relies heavily on Meehan v . Town of East Lyme,

0 , 83 (D. Conn. 1996), which this court finds to be obviously distinguishable. Under Connecticut law, Meehan, a tenured public employee, appealed an adverse administrative ruling on the "just cause" issue to the Connecticut superior court, which had the authority to consider plaintiff's additional claim, raised on appeal, that his termination violated due process. After the superior court found against plaintiff on his due process claim, plaintiff raised the same due process claim in federal court under

. The federal district court dismissed the section 1983 claim on the ground of collateral estoppel. However, the case at hand is readily distinguishable from Meehan because there has been no prior finding on the due

5 process issue as there was in Meehan.

Even though McManus’s procedural due process rights were

violated by lack of a pretermination hearing, this court is not

convinced McManus suffered any injury, which is an essential

element of his section 1983 claim. Carey v . Piphus,

(1978). Section 1983 was intended to provide a civil remedy to compensate persons for injuries caused by the deprivation of

their constitutional rights. McManus can carry his burden of

proving injury in one of two ways. First, he can establish that

he would not have been terminated had a proper pretermination

hearing been held. However, McManus will be collaterally

estopped from denying that his termination was justified since

that issue was already resolved in the December 2 1 , 1995, hearing

before the personnel committee and then again in the appeal

before the New Hampshire Supreme Court.1 Second, the United

States Supreme Court has observed that the Due Process Clause not

only safeguards against erroneous deprivations of property, but also guarantees “the 'feeling of just treatment' by the

government.”

(quoting Anti-Fascist

1 For this reason, plaintiff's motion to exclude evidence of the earlier decisions of the personnel committee and the New Hampshire Supreme Court is denied. Those decisions are relevant to the issue of plaintiff's injury. However, the court does agree that evidence that the county operations are running more profitably than when plaintiff was in charge is irrelevant.

6 Committee v . McGrath,

(1951) (Frankfurter, J., concurring)). The Court went on to add that even when a deprivation is ultimately justified, the citizen may nonetheless suffer mental and emotional distress from denial of the “feeling of just treatment.” However, such mental and emotional distress cannot be presumed.

. On the contrary, plaintiff must prove that he suffered distress from deficiencies in procedure rather than from the deprivation of property itself. Since neither party has briefed this issue, the court leaves it to the parties to file the necessary motions and supporting memoranda if they choose to do s o .

McManus also claims that he was denied pretermination notice, which is an essential element of due process. At McManus’s request, the Commissioners sent him written notice on August 25 explicating the grounds for his termination.

Defendant’s Motion for Summary Judgment, Exhibit F. Plaintiff argues that this August 25 notice came too late to constitute pretermination notice because the Commissioners had already terminated his employment at their regularly scheduled meeting in early August. However, plaintiff's argument misunderstands the term "termination," which denotes a formal severance of the employment relation. At the August meeting, the Commissioners simply decided to begin the process of terminating plaintiff, but

7 the August 25 notice specifically provided that plaintiff's

termination would not be effective until September 2 5 . Just as

a decision to marry does not effect a formal marriage, and a

decision to contract does not formally render one contractually

bound, the Commissioners' August decision to terminate McManus

did not effect a formal severance of the employment relation. Rather, plaintiff was not formally terminated until September 2 5 ,

1995, the date when the August notice given to plaintiff

specifically stated that the termination would be effective.

Since the August notice preceded the September termination of

plaintiff's employment, Cheshire County gave plaintiff

constitutionally sufficient pretermination notice.

Plaintiff’s next due process claim alleges flaws in the

December 2 1 , 1995, hearing held before the personnel committee

pursuant to RSA 28:10-a. Plaintiff claims that the personnel

committee denied his requests for hearing and deposition

subpoenas and “created a flawed hearing process in which the

plaintiff had no ability to compel the attendance of witnesses he

intended to call.” Complaint ¶ 6 9 . However, the Due Process

Clause only guarantees a pretermination hearing and, even then,

“something less than a full evidentiary hearing is sufficient

prior to adverse administrative action.” Loudermill, supra, 470

U.S. at 532. There is no due process right to a full evidentiary

8 hearing after the challenged deprivation. Plaintiff's right to

the post-termination hearing held in this case emanated from RSA

28:10-a, and his argument that the hearing was unlawful is a

state law claim.

Likewise, plaintiff’s claim that defendant failed to accord

him progressive discipline prior to termination as promised in the Cheshire County Employee Handbook is also a state law claim.

The question of what process is due to a tenured public employee

before termination is a federal constitutional question. Courts

have never held that tenured employees are entitled to any

process beyond notice and an opportunity to be heard.

Loudermill, supra, 470 U.S. at 542 (“We have described the root

requirement of the Due Process Clause as being that an individual

be given an opportunity for a hearing before he is deprived of

any significant property interest.” (Internal quotations

omitted.)) Progressive discipline has not been held to be part

of the process due tenured employees under the Due Process

Clause. States certainly may provide their employees procedural

protections, such as progressive discipline, that go beyond the

minimum set by the Constitution, but a claim that those

additional procedural protections have been ignored is a state

law claim. See Voigt v . Savell,

(9th Cir.

1995) (“[Plaintiff] contends that the defendants failed to follow

9 the extensive procedures established by state law, such as constructive and progressive discipline. That claim must be presented to [a state] court.”). Next, plaintiff challenges the constitutionality of RSA 28:10-a, I I , which provides:

Any employee of a county institution who has served at last one year shall not be discharged, removed, or suspended from employment except for dishonesty, intoxication, immoral behavior or other misconduct, neglect of duty, negligence, willful insubordination, lack of cooperation, inefficiency, incapacity or unfitness to perform his duties, or for the good of the institution to which he is assigned . . . .

Essentially, plaintiff complains that “for the good of the

institution” is an unconstitutionally vague basis for discharge,

violative of substantive due process. Were this a criminal

statute, pursuant to which the state asserted the right to

deprive a citizen of liberty “for the good of the institution,”

there is no doubt the statute would violate due process.

However, unlike liberty, property interests have no extralegal

source, and “they are created and their dimensions are defined by

existing rules or understandings that stem from an independent

source such as state law.” Loudermill, supra, 470 U.S. at 538.

The implication is that there are no standards by which to

challenge the dimensions of property interests created by state

law. Such standards could only come from a source outside of

10 state law and, according to the Court in Loudermill, such sources do not exist. Thus there are no standards to which plaintiff can appeal to support his claim that the dimensions of his property interest in his job are unconstitutionally vague. Plaintiff’s breach of contract claim is likewise meritless. Plaintiff claims that the Cheshire County Employee Handbook promised progressive discipline prior to termination, which he was denied. The Handbook provides that "[e]very employer may need at some time to administer discipline. Both unwarranted discipline and failure to discipline can adversely affect employee morale. While progressive discipline is usually employed, the specific disciplinary action may vary depending upon circumstances and nature of the offense." Defendant's Memorandum in Support of Motion for Summary Judgment at 1 4 . The use of the word “may” unambiguously indicates that progressive discipline is discretionary, and under the plain meaning rule, Echo Consulting Servs. v . North Conway Bank,

,

2 7 , 230 (1995), this understanding controls. Thus Cheshire County did not breach the employment contract by failing to accord McManus progressive discipline.

Alternatively, McManus claims that Cheshire County abused its discretion to accord progressive discipline in violation of the covenant of good faith and fair dealing, which has been

11 defined as follows: [U]nder an agreement that appears by word or silence to invest one party with a degree of discretion in performance sufficient to deprive another party of a substantial proportion of the agreement's value, the parties' intent to be bound by an enforceable contract raises an implied obligation of good faith to observe reasonable limits in exercising that discretion, consistent with the parties' purpose or purposes in contracting.

Centronics Corp. v . Genicom Corp.,

(1989).

Under Centronics, it is not all contractual discretion that is circumscribed by the covenant; rather, it is only that discretion

which is sufficient to deprive the other party of a substantial

portion of the agreement's value. See

(providing

examples of such discretion, like a promise to pay $200 per month

for "such [personal] services as [the plaintiff] in his sole

discretion, may render"). Cheshire County's discretion in

according progressive discipline was not sufficient to deprive

McManus of a substantial portion of the employment contract's value, which was the right to his job except upon termination for

cause. Even if Cheshire County exercised its discretion against

according McManus progressive discipline, he could still only be

terminated for cause, guaranteeing to plaintiff a substantial

portion of the employment contract's value, regardless of

defendant's discretion to accord progressive discipline. The

covenant of good faith and fair dealing was not intended to

12 protect solely collateral contract benefits, like the right to progressive discipline. See Carriage Hill Health Care v . Hayden, N o . 96-101-SD, slip o p . at 5-8 (D.N.H. Apr. 3 0 , 1997) (Devine, J.). The covenant did not circumscribe defendant's discretion in according progressive discipline.

Last, plaintiff claims that defendants violated the state right-to-know law, RSA 91-A:3, under which “a governmental body may not move to go into executive session for the purpose of considering the termination of a public employee unless it has previously put that employee on notice that such a motion would be made.” Johnson v . Nash,

3 4 , 538 (1992). According to McManus, Cheshire County violated this provision when the Commissioners considered McManus’s termination at the regularly scheduled meeting in August without providing him notice. The court agrees. Cheshire County's contention that the August meeting of Commissioners was a chance meeting which did not trigger a duty to notify McManus is too frivolous to merit discussion.

Cheshire County contends that the right-to-know law does not authorize the remedies sought by plaintiff, which include back pay, front pay, employment benefits, and attorney’s fees. At the outset, plaintiff is not entitled to attorney’s fees because RSA 91-A:8, I , specifically limits attorney’s fees to willful violations, and plaintiff has produced not one shred of evidence

13 in support of his claim that the Commissioners acted willfully.

In addition, the clear language of the statute would appear to

preclude the other remedies sought by plaintiff. Under RSA

91-A:8, the "Remedies" section of the right-to-know law, no

provision is made for traditional compensatory damages such as

front pay, back pay, and employment benefits. Nonetheless, in

Nash, a case directly on point, the New Hampshire Supreme Court

upheld a superior court order that “reinstated plaintiff to his

post with back pay and awarded him attorney fees.” Id. at 535

(emphasis added). This indicates that compensatory damages are

recoverable, even though the statute does not specifically

provide for such damages.

Conclusion

For the foregoing reasons, defendant's motion for summary judgment is granted as to all counts except Count VII and Count

III, to the extent that it alleges failure to provide a

pretermination hearing.

14 Plaintiff's motion in limine is denied as to evidence of

prior rulings and granted as to evidence of subsequent operations

of the county.

SO ORDERED.

Shane Devine, Senior Judge United States District Court

November 2 5 , 1997 cc: Jonathan S . Springer, Esq. Donald E . Gardner, Esq. Kathleen C . Peahl, Esq. Attorney General - NH

15