Opinion
3:18-cv-00300-YY
07-01-2021
WENDY NELSON-BACA, Plaintiff, v. THE STATE OF OREGON, by and through the DEPARTMENT OF HUMAN SERVICES; CLYDE SAIKI, an individual; REBECCA DANIELS, an individual; BROCK WALLACE, an individual; and, DON ERICKSON, an individual, Defendants.
FINDINGS AND RECOMMENDATIONS
YOULEE YIM YOU UNITED STATES MAGISTRATE JUDGE.
Plaintiff Wendy Nelson-Baca has brought suit against the Oregon Department of Human Services (“DHS”), Clyde Saiki, former DHS Director, Rebecca Daniels, DHS Director of Human Resources, Brock Wallace, a DHS Human Resource Investigator, and Don Erickson, a DHS manager, alleging employment discrimination, civil rights violations, and state tort claims for conduct surrounding her dismissal in July 2017. Plaintiff alleges four claims against the individual defendants pursuant to 42 U.S.C. § 1983 for violations of the Oregon Constitution and United States Constitutions. She alleges Daniels violated her right to free speech under a “Cat's Paw” theory of liability (first claim); Saiki, Daniels, and Wallace violated her right to free speech (second claim); Saiki, Daniels, and Wallace violated her right to procedural due process (third claim); and Saiki and Daniels violated her right to be free from unreasonable searches and seizures (fourth claim). Plaintiff also alleges a claim for false imprisonment against DHS (fifth claim), and claims for negligent personnel investigation (sixth claim), intentional infliction of extreme emotional distress (seventh claim), and whistleblowing retaliation under O.R.S. 659A.203 (eighth claim) and O.R.S. 659A.199 (ninth claim) against the State of Oregon.
This court has federal question jurisdiction over plaintiff's § 1983 claims pursuant to 28 U.S.C. § 1331 and supplemental jurisdiction over her state law claims pursuant to 28 U.S.C. § 1367.
Defendants have filed a motion to dismiss the fourth and fifth claims for failure to state a claim (Defs.' Mot. Dismiss, ECF 69; Defs.' Renewed Mot. Dismiss, ECF 74) and a motion for summary judgment on the third and seventh claims (Defs.' Mot. Partial Summ. J., ECF 76). Plaintiff has moved to strike (Pl.'s Mot. Strike, ECF 94) several exhibits and statements from the record on summary judgment.
For the reasons discussed below, defendants' motion to dismiss should be granted, defendants' motion for summary judgment should be granted, plaintiff's motion to strike should be denied as moot, and this case should proceed to trial on the remaining claims.
I. Defendants' Motions to Dismiss (ECF 69, 74)
Defendants seek dismissal with prejudice of plaintiff's fourth and fifth claims for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). Defendants filed two motions— a motion to dismiss and a renewed motion to dismiss—for procedural reasons that are not important. It suffices to say that the motions rise or fall together.
A. Standards
A motion to dismiss for failure to state a claim under Rule 12(b)(6) may be granted only when there is no cognizable legal theory to support the claim or when the complaint lacks sufficient factual allegations to state a facially plausible claim for relief. Mollett v. Netflix, Inc., 795 F.3d 1062, 1065 (9th Cir. 2015); Shroyer v. New Cingular Wireless Servs., Inc., 622 F.3d 1035, 1041 (9th Cir. 2010). When evaluating the sufficiency of a complaint's factual allegations, the court must accept as true all well-pleaded material facts alleged in the complaint and construe them in the light most favorable to the plaintiff. Davidson v. Kimberly-Clark Corp., 873 F.3d 1103, 1107 n.1 (9th Cir. 2017) (citing Daniels-Hall v. Nat 'I Educ. Ass 'n, 629 F.3d 992, 998 (9th Cir. 2010)); see also Dowers v. Nationstar Mortg., LLC, 852 F.3d 964, 969 (9th Cir. 2017) (citing Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). While the court need not credit a plaintiff's “legal conclusions, ” the presumption of truth indisputably extends to all “factual allegations” in a complaint, however “conclusory.” Iqbal, 556 U.S. at 678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007).
B. Allegations in Complaint
Plaintiff alleges she was placed on paid administrative leave, “duty stationed at home, ” from December 9, 2016, until her termination on July 17, 2017, for engaging in protected whistleblowing activities. Plaintiff had been the Administrator of DHS' Imaging and Record Management unit (“IRMS”) since 2001. Second Am. Compl. ¶¶ 3, 13, ECF 73. IRMS is part of DHS' Central and Shared Services (“Shared Services”), which serves DHS and the Oregon Health Authority (“OHA”). Plaintiff alleges DHS and OHA directors and executives promoted a culture of hiding waste, impeding audits and whistleblowing, stalling reform, and assigning blame to “fall guys” for embarrassing agency problems. Id. ¶ 10. She alleges that she complained to Saiki and Daniels, and others, of “violations of state and federal Medicaid laws, rules or regulations . . .; mismanagement; gross misuse or waste of public resources or funds; or the abuse of authority in connection with the administration of a public program or the execution of a public contract.” Id. ¶ 13.
Plaintiff contends that, in response to these complaints, Michael Coutley, an employee and organizer of the Service Employees International Union Local 503 (“SEIU”), the union representing IRMS's line workers, conducted “a clandestine bully boss campaign” against her. Id. ¶¶ 15-16. Plaintiff alleges some of the individually-named defendants conspired with Coutley to retaliate against her for engaging in protected speech and to prevent her from engaging in protected speech in the future. Id. ¶¶ 20, 61.
Daniels put plaintiff on involuntary paid administrative leave, “duty stationed at home, ” on December 9, 2016. Id. ¶¶ 3, 21. Plaintiff alleges:
While Plaintiff was “duty stationed at home, ” she was ordered to physically stay in her home for over seven (7) months, Monday through Friday from 8:00 a.m. to 5:00 p.m. each workday. DHS threatened to fire Plaintiff if she did not follow this order. DHS did not assign work to Plaintiff and never had the intent to assign her work from home. There was no arguable business reason for confining her to her home.Id. Plaintiff claims that physical confinement at home under these circumstances was wholly unreasonable and was not otherwise authorized by law, and that DHS acted without lawful authority, without probable cause, and without any objectively reasonable basis to restrict her freedom of movement. Id. ¶¶ 55, 61.
C. Fourth Claim—Fourth Amendment
Title 42 U.S.C. § 1983 provides a cause of action for the deprivation of constitutional rights by state actors. “To state a claim under § 1983, a plaintiff must allege two essential elements: (1) that a right secured by the Constitution or laws of the United States was violated, and (2) that the alleged violation was committed by a person acting under the color of State law.” Long v. Cty. of Los Angeles, 442 F.3d 1178, 1185 (9th Cir. 2006) (citing West v. Atkins, 487 U.S. 42, 48 (1988)). Plaintiff's fourth claim alleges Saiki, Daniels, and Wallace violated her right to be free from unreasonable seizure of her person under the Fourth and Fourteenth Amendments. Second Am. Compl. ¶¶ 55-56, ECF 73.
The Fourth Amendment protects “against unreasonable searches and seizures.” U.S. CONST. amend. IV. “The general rule is that a person has been ‘seized' within the meaning of the Fourth Amendment only if, in view of all of the circumstances surrounding the incident, a reasonable person would have believed that he was not free to leave.” United States v.McClendon, 713 F.3d 1211, 1215 (9th Cir. 2013) (quoting United States v. Mendenhall, 446 U.S. 544, 554 (1980) (simplified); Brower v. Cty. of Inyo, 489 U.S. 593, 597 (1989)) (holding a seizure occurs “only when there is a governmental termination of freedom of movement through means intentionally applied”). “This determination is ‘a necessary, but not a sufficient, condition for seizure.' In addition, some form of ‘touching or submission' is also required.” Id. (quoting California v. Hodari D., 499 U.S. 621, 628 (1991)) (emphasis in original). The “case-by-case, fact specific inquiry . . . is simply whether there is a formal arrest or restraint on movement of the degree associated with formal arrest.” Aguilera v. Baca, 510 F.3d 1161, 1168 n.3 (9th Cir. 2007) (citing California v. Beheler, 463 U.S. 1121, 1125 (1983)).
The Fourth Amendment “does not protect against the threat of job loss.” Driebelv. Cityof Milwaukee, 298 F.3d 622, 642 (7th Cir. 2002). A subordinate is not seized by a superior's orders if heeded from fear of “mere[] adverse employment consequences.” Aguilera, 510 F.3d at 1167-68 (9th Cir. 2007). Starting with the Seventh Circuit's decision in Driebel, every circuit court to ask whether the threat of adverse employment action may constitute a seizure under the Fourth Amendment has answered in the negative. E.g., Carter v. City of Milwaukee, 743 F.3d 540, 544-45 (7th Cir. 2014); Gwynn v. City of Philadelphia, 719 F.3d 295, 300 (3d Cir. 2013); Pennington v. Metro. Gov't of Nashville & Davidson Cty., 511 F.3d 647, 652 (6th Cir. 2008); Aguilera, 510 F.3d at 1167; Reyes v. Maschmeier, 446 F.3d 1199, 1204 (11th Cir. 2006).
Here, plaintiff alleges only that her fear of adverse employment action restrained her freedom of movement. Plaintiff alleges she was “seized” during regular work hours every day for over seven months because DHS threatened to fire her if she did not follow the order to be duty stationed at home. Second Am. Compl. ¶ 21 ECF 73. This is not a seizure within the meaning of the Fourth Amendment. Aguilera, 510 F.3d at 1167-68; Driebel, 298 F.3d at 642. Plaintiff's freedom was only restrained to the extent she voluntarily complied with DHS' order to work from home. Plaintiff does not allege that she withdrew her consent to employment and defendants kept her in her home after that withdrawal. See Florida v. Bostick, 501 U.S. 429, 434 (1991) (holding encounter between government official and an individual “will not trigger Fourth Amendment scrutiny unless it loses its consensual nature”). Further, plaintiff does not allege Saiki, Daniels, or Wallace were acting in a law enforcement capacity. See Aguilera, 510 F.3d at 1169 (holding courts “must distinguish between a police department's actions in its capacity as employer and its actions as the law enforcement arm of the state” in case involving constitutional rights of police officers).
Finally, plaintiff argues that because a public employer may not substantially threaten to penalize its employees for asserting their Fifth Amendment privilege against self-incrimination under the prophylactic rule announced in Garrity v. New Jersey, 385 U.S. 493 (1967), somehow there is a Fourth Amendment violation here. Pl.'s Resp. Mot. Dismiss 8-9, ECF 75. Under Garrity and its progeny, incriminating statements secured by the government in a “classic penalty situation, ” such as by threat of job loss for invoking one's Fifth Amendment rights, are “deemed compelled and inadmissible in a criminal prosecution.” United States v. Goodpaster, 65 F.Supp.3d 1016, 1024 (D. Or. 2014) (quotingMinnesota v. Murphy, 465 U.S. 420, 434 (1984)). Plaintiff makes no attempt to justify importing this Fifth Amendment rule into the Fourth Amendment arena or to explain how the principles giving rise to the rule should inform the Ninth Circuit's holding that fear of adverse employment consequences cannot affect a seizure under the Fourth Amendment. See Aguilera, 510 F.3d at 1167-68. Indeed, the Ninth Circuit applied the Garrity rule in Aguilera, which set forth the Fourth Amendment law regarding seizure applied above. See id. at 1171.
Defendants do not address any of plaintiff's argument or cited cases. Defendants argue the right purportedly being seized is a property right, and that this claim should be dismissed because plaintiff cannot allege a possessory interest in her worksite. Defs.' Renewed Mot. Dismiss 5, ECF 74; Defs.' Reply Mot. Dismiss 2, ECF 82. That is not the type of Fourth Amendment claim plaintiff attempted to make. Regardless, plaintiff has failed to state a claim for violation of the Fourth Amendment.
D. Fifth Claim—False Imprisonment
The intentional tort of false imprisonment is the “the unlawful imposition of restraint on another's freedom of movement.” Buckelv. Nunn, 133 Or.App. 399, 405 (1995) (citation omitted); Fossen v. Clackamas Cty., 271 Or.App. 842, 848 (2015). Restraint, or confinement, may be accomplished by actual or apparent physical barriers, compulsive physical force, a threat to apply physical force, or, as plaintiff alleges here, an assertion of legal authority. Buckel, 133 Or.App. at 405 (citation omitted). “The tort has four elements: (1) defendant must confine plaintiff; (2) defendant must intend the act that causes the confinement; (3) plaintiff must be aware of the confinement; and (4) the confinement must be unlawful.” Hiber v. CreditorsCollection Serv. of Lincoln Cty., Inc., 154 Or.App. 408, 413 (1998) (citations omitted). The confinement need not be for more than a brief time. Buckel, 133 Or.App. at 405. Once the plaintiff establishes imprisonment (the first three elements), defendant has the burden of showing that the imprisonment was not unlawful. Ross v. City of Eugene, 151 Or.App. 656, 663 (1997).
Again, plaintiff alleges DHS put her on paid administrative leave “duty stationed at home, ” where she was ordered to physically stay in her home for over seven months during work hours, but DHS did not assign her any work. Second Am. Comp. ¶ 21, ECF 73. Plaintiff alleges that DHS threated to fire her if she did not follow this order. Id. She alleges DHS acted without lawful authority, without probable cause, and without any objectively reasonable basis to restrict her freedom of movement, and that DHS acted willfully and intentionally with the intent to punish her for her whistleblowing activity. Id. ¶ 61.
Under plaintiffs' theory of false imprisonment, some untold millions of the working public are likely falsely imprisoned by their employers. That is simply not the case. Courts have repeatedly observed that the threat of job loss is not the type of “assertion of legal authority” that constitutes restraint or confinement. See, e.g., Arrington v. Liz Claiborne, Inc., 688 N.Y.S.2d 544, 546 (1999) (“Plaintiffs' fears that they would be arrested or fired did not constitute detaining force necessary to establish the tort of false imprisonment”) (citing Malanga v. Sears, Roebuck & Co., 487 N.Y.S.2d 194, aff'd, 65 N.Y.2d 1009 (1985)); Foley v. Polaroid Corp., 400 Mass. 82, 91-92 (1987) (“Threat of discharge from employment alone cannot effect imprisonment for tort purposes.”); Faniel v. Chesapeake & Potomac Tel. Co., 404 A.2d 147, 152 (D.C. Ct. App. 1979) (“fear of losing one's job, although a powerful incentive, does not render involuntary the behavior induced”);Moen v. Las VegasInt'lHotel, Inc., 90 Nev. 176, 177 (1974) (“Apprehension that one might in the future lose one's job . . . is not force or the threat of force which is necessary to establish false imprisonment.”); see also RESTATEMENT (SECOND) OF TORTS § 892B cmt. j (Am. L. Inst. 1979); 32 AM. JUR. 2d False Imprisonment § 16, Westlaw (database updated February 2021).
Voluntarily complying with an employer's assignment to a specific worksite is not a form of imprisonment. Therefore, plaintiff has failed to state a claim for false imprisonment.
II. Defendants' Motion for Partial Summary Judgment (ECF 76)
Defendants seek summary judgment on the third and seventh claims. However, plaintiff confirmed during oral argument that she intended to withdraw the seventh claim for intentional infliction of emotional distress and does not oppose defendants' motion as to that claim. Thus, only the third claim for violation of plaintiff's procedural due process rights is at issue now.
A. Standards
Under Federal Rule of Civil Procedure 56(a), “the court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” The party moving for summary judgment bears the initial responsibility of informing the court of the basis for the motion and identifying portions of the pleadings, depositions, answers to interrogatories, admissions, or affidavits that demonstrate the absence of a triable issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the moving party does so, the nonmoving party must “go beyond the pleadings” and “designate ‘specific facts showing that there is a genuine issue for trial.'” Id. at 342 (citing FED. R. CIV. P. 56(e)). The court “does not weigh the evidence or determine the truth of the matter, but only determines whether there is a genuine issue for trial.” Balint v. Cason City, Nev., 180 F.3d 1047, 1054 (9th Cir. 1999). “Reasonable doubts as to the existence of material factual issue are resolved against the moving parties and inferences are drawn in the light most favorable to the non-moving party.” Addisu v. Fred Meyer, Inc., 198 F.3d 1130, 1134 (9th Cir. 2000).
B. Background
DHS placed plaintiff on paid administrative leave “duty stationed at home” on December 9, 2016, pending investigation into “allegations of unprofessional workplace behavior and misconduct.” Decl. David Kramer, Ex. 1, ECF 92-1. On June 19, 2017, DHS sent plaintiff a letter notifying her it was initiating a pre-disciplinary process reserved for management service employees. Id., Ex. 4, at 1, ECF 92-4 (citing O.R.S. 240.570). The letter explicitly identifies plaintiff as an employee of DHS, Imaging and Records Management Services, “in the classification of Principle Executive Manager F (PEMF), in management service.” Id. DHS ended the letter by scheduling a meeting to provide plaintiff with an “opportunity to refute the facts or present mitigating information before a final decision is made.” Id. at 10.
However, DHS subsequently asserted that plaintiff had been re-classified to the executive service in December 2007, and rescinded the pre-disciplinary letter. Id., Ex. 5, at 3, ECF 92-5. Later, through counsel, DHS represented that it “would like [plaintiff] to have the opportunity to provide any additional information she thinks is relevant to her situation” before making a final disciplinary decision. Id. DHS further represented that if plaintiff believed “there is any relevant information DHS should consider before making its final decision on Monday, and she submits it by [close of business] tomorrow, DHS assures her it will be considered.” Id. at 2. Plaintiff timely sent a 12-page letter for DHS' consideration. See id., Ex. 3.
DHS Director Saiki terminated plaintiff's employment by letter on July 17, 2017. Id., Ex. 7, ECF 92-7. Saiki did not know that DHS had rescinded its provision of pre-termination rights. Id., Ex. 12, at 5, ECF 92-12. He did not recall ever seeing plaintiff's letter opposing her dismissal despite testifying that he was “under the impression before [he] terminated [plaintiff] that she had been offered the opportunity to present her side” and wanting to “get all the facts and [a] complete picture.” Id.
C. Third Claim—Procedural Due Process
1. Fourteenth Amendment
Title 42 U.S.C. § 1983 provides a cause of action for the deprivation of constitutional rights by state actors. “To state a claim under § 1983, a plaintiff must allege two essential elements: (1) that a right secured by the Constitution or laws of the United States was violated, and (2) that the alleged violation was committed by a person acting under the color of State law.” Long, 442 F.3d at 1185 (citing West, 487 U.S. at 48). Here, plaintiff alleges defendants Saiki, Daniels, and Wallace violated her procedural due process rights under the Fifth and Fourteenth Amendments. ECF 73 ¶¶ 48-50. Only the first element is at issue as the parties do not dispute these individual defendants were acting under color of state law.
To prevail on a procedural due process claim, the plaintiff must establish (1) the existence of a liberty or property interest protected by the Constitution, (2) a deprivation of the interest by the government, and (3) lack of process. Guatay Christian Fellowship v. Cty. of SanDiego, 670 F.3d 957, 983 (9th Cir. 2011); Portman v. Cty. of Santa Clara, 995 F.2d 898, 904 (9th Cir. 1993). Thus, “[t]he first inquiry in every due process challenge is whether the plaintiff has been deprived of a protected interest in ‘property' or ‘liberty.'” American Mfrs. Mut. Ins.Co. v. Sullivan, 526 U.S. 40, 59 (1999). “Property interests . . . are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law—rules or understandings that secure certain benefits and that support claims of entitlement to those benefits” Bd. of Regents of State Colleges v. Roth, 408 U.S. 564, 577 (1972). “[G]overnment employees can have a protected property interest in their continued employment if they have a legitimate claim to tenure or if the terms of the employment make it clear that the employee can be fired only for cause.” Blantz v. California Dep't of Corr. &Rehab., Div. of Corr. Health Care Servs., 727 F.3d 917, 922 (9th Cir. 2013) (emphasis in original); Portman, 995 F.2d at 904 (“A government employee has a constitutionally protected property interest in continued employment when the employee has a legitimate claim of entitlement to the job.”).
2. Oregon's Civil Service Classification Scheme
The first question, then, is whether plaintiff has a legitimate claim of entitlement to her job. Under Oregon law, that question is answered by looking to the classification of plaintiff's position in the civil service.
Positions in the service of the state are divided into the following categories:
(1) The classified service as provided in O.R.S. 240.210.
(2) The unclassified service as provided in O.R.S. 240.205.
(3) The exempt service as defined in O.R.S. 240.200.
(4) The management service as provided in O.R.S. 240.212.O.R.S. 240.195.
The “executive service, ” which is not mentioned in O.R.S. 240.195, is a subset of positions in the unclassified service and identified by Human Resource Services Division (“HRSD”) State Policy 30.000.01. That policy places the first five categories of the unclassified service (O.R.S. 240.205(1)-(5)) into the “unclassified executive service.” See HRSD State Policy 30.000.01 § l(cXB). “Principal assistants” are eligible for inclusion in the executive service depending on whether certain criteria are met. O.R.S. 240.205(4). As explained by the Oregon Employment Relations Board (“ERB”) in Lopez v. Oregon,
The “executive service” originated as an “an amalgam of certain positions in the exempt service and the unclassified service.” Lopez, 2005 WL 6132354, at *5. It was a category created by O.A.R. 105-10-000(24), which the Oregon legislature repealed in 2016. That rule defined executive service as “[p]art of the exempt or unclassified services as specified in HRSD State Policy 30.000.01, Position Management.” Although, the administrative rule was repealed, the most recent iteration of HRSD State Policy 30.000.01 (eff. 2/01/2019) continues to refer to the “unclassified executive service.”
a principal assistant is an employee who (1) is a manager of a major agency organizational component, (2) reports directly to a listed officer or a deputy, (3) is “designated as such” by the officer, and (4) has the designation approved by the Director of the Oregon Department of Administrative Services (Director). An employee must meet all of these requirements to be considered a “principal assistant.”ERB Case No. MA-2-04, 2005 WL 6132354, at *6 (July 29, 2005) (interim order), adh'dto onrecons (September 2005) (management service appeal) (citing O.R.S. 240.205(4)).
State employees in the “unclassified service” and “exempt service” categories are employed at-will and lack as a matter of law any property interest in their continued employment. See Miller v. Oregon Racing Commission, No. 3:15-CV-300-PK, 2016 WL 4150030, at *4 (D. Or. July 11, 2016), report and recommendation adopted, No. 3:15-CV-00300-PK, 2016 WL 4157313 (D. Or. Aug. 2, 2016) (citing Papadopoulos v. Oregon StateBoard of Higher Education, 14 Or.App. 130, 157 (1973)). Thus, by definition, state employees in the “executive service” are likewise employed at-will and lack as a matter of law any property interest in their continued employment. “By contrast, state employees in the ‘classified service' who have completed a probationary period of employment and state employees in the ‘management service' enjoy a property interest in their continued employment, and are entitled to a pre-discharge hearing to determine whether statutorily defined grounds for discharge exist.” Id.; see O.R.S. 240.560; O.R.S. 240.570(3)-(4); see also Papadopoulos, 14 Or.App. at 157-158; Wheaton v. Webb-Petett, 931 F.2d 613, 617 (9th Cir. 1991).
Here, plaintiff asserts she held a position in management service, whereas defendants assert she held a position in the executive service. The classification of plaintiff's position is dispositive of whether she has a property interest in her continued employment. The parties offer evidence in support of their positions, and plaintiff moves to strike much of defendants' evidence as inadmissible. Plaintiff argues that because there is a factual dispute, this is a jury question. Defendants' position, reasonably construed, is this: if defendants are correct that plaintiff held an executive service position, she had no legitimate claim of entitlement to employment and lacked any constitutionally protected property interest in continued employment. If defendants are wrong in classifying plaintiff's position as an executive service, plaintiff should have appealed that classification determination to the ERB. Defendants assert the ERB has exclusive jurisdiction to determine the classification of plaintiff's position, and that because plaintiff forfeited her opportunity to challenge that decision before the ERB, she cannot establish the property interest that is requisite to her procedural due process claim in this action.
It is unnecessary to reach the merits of plaintiff's motion to strike because, as discussed below, plaintiff's classification status must be determined by the ERB. However, plaintiff's motion to strike is well taken. If the classification determination were an issue that could be resolved in this forum, disputed issues of fact would preclude summary judgment on this claim.
Defendants also assert Saiki, Daniels, and Wallace are entitled to qualified immunity. Defs.' Mot. Partial Summ. J. 2, ECF 76. This argument need not be reached.
Further, in their reply memorandum, defendants ask the court to dismiss this claim without prejudice under the Burford abstention doctrine—the avenue taken by the court under similar circumstances in Miller v. Oregon Racing Commission, No. 3:15-CV-300-PK, 2016 WL 4150030, at *4 (D. Or. July 11, 2016), report and recommendation adopted, No. 3:15-CV-00300-PK, 2016 WL 4157313 (D. Or. Aug. 2, 2016). In her sur-reply, plaintiff argues it is much too late for defendants to invoke Burford abstention, but even if considered, the doctrine does not apply.
3. Jurisdiction of the Oregon Employment Relations Board
i. Miller v. Oregon Racing Commission
It is at this point that the Miller case becomes highly instructive. Jill Miller challenged her dismissal from the Oregon Racing Commission before the ERB in 2014. As here, Miller asserted she was a principal assistant in management service when she was dismissed and was therefore entitled to the pre-termination process conferred by statute on management service employees. While the ERB proceeding was pending, she sued in Multnomah County Circuit Court, asserting, among other claims, a Fourteenth Amendment procedural due process claim. The agency removed the case to this court, which stayed the proceedings pending the ERB's determination. Miller, 2016 WL 4150030, at *2. The ERB dismissed Miller's appeal as untimely and did not reach the merits of her contention that she had a property interest in her employment. Id. at *6. After conducting a rigorous analysis, the federal district court dismissed the action without prejudice under the Burford abstention doctrine and remanded the action back to the state trial court. Id. at *9.
On remand, the trial court dismissed the claim on unrelated grounds, which the Oregon Court of Appeals reversed. In doing so, the court of appeals left the issue of whether the ERB has exclusive jurisdiction to make a state employee classification determination to the trial court in the first instance. See Miller v. State by & through Oregon Racing Comm'n, 298 Or.App. 70, 88 (2019). The court acknowledged this was an open question under Oregon law. See id. at 88, 88 n.15. On the second remand, the trial court again dismissed the procedural due process claim. Although the trial court did not issue a detailed written opinion, it appears to have adopted the defendant's argument that the ERB has exclusive jurisdiction to make employee classification determinations. Miller's appeal of that decision is pending. Jill Miller vs. State of Oregon, Docket No. A173441 (Or. Ct. App. Feb 19, 2020).
The state's motion to dismiss asserted both primary jurisdiction and exclusive jurisdiction.
[P]rimary jurisdiction applies where a claim can originally be addressed in a court but would be better addressed first by an administrative body. It applies to claims that contain some issue within the special competence of an administrative agency. Thus, under the primary jurisdiction doctrine, courts, even though they could decide, will in fact not decide a controversy involving a question within the jurisdiction of an administrative tribunal until after that tribunal has rendered its decision.2 AM. JUR. 2D ADMINISTRATIVE LAW § 456 (Feb. 2021 update) (emphasis added).Because Miller had already gone to the ERB and the ERB dismissed her complaint as time-barred without deciding whether she was a management service employee, application of the primary jurisdiction doctrine would have been futile. Accord Astiana v. Hain Celestial Grp., Inc., 783 F.3d 753, 761 (9th Cir. 2015) (“a court should not invoke primary jurisdiction when the agency is aware of but has expressed no interest in the subject matter of the litigation”). Thus, it can be inferred that the trial court granted the motion to dismiss because it lacked jurisdiction to make the classification determination itself and was therefore precluded from litigating the due process claim.
In sum, (1) neither the Oregon Supreme Court nor the Oregon Court of Appeals has opined on whether the ERB has exclusive jurisdiction over state employee classification determinations; (2) a federal district court abstained from exercising jurisdiction over a procedural due process claim that required making the determination; and (3) an Oregon trial court appears to have dismissed a procedural due process claim finding the ERB has exclusive jurisdiction to make state employee classification determinations.
ii. Burford abstention
As an initial matter, plaintiff's objection that defendants should have raised the abstention argument at a much earlier stage in these proceedings is well taken. The first time that defendants made any reference to abstention was in their reply memorandum in support of their motion for summary judgment, despite relying on Miller, 298 Or.App. at 88, in their motion for summary judgment. Defs.' Mot. Partial Summ. J. 13, ECF 76. Regardless, “Burford abstention may be raised at any time, including on appeal, and it may be raised by a court sua sponte.” Lentz v. Trinchard, 730 F.Supp.2d 567, 587 (E.D. La. 2010) (citations omitted); see Int'l Coll.of Surgeons v. City of Chicago, 153 F.3d 356, 360 (7th Cir. 1998); Munich Am. Reinsurance Co.v. Crawford, 141 F.3d 585, 588 (5th Cir. 1998); Fed. Exp. Corp. v. Tennessee Pub. Serv.Comm'n, 925 F.2d 962, 966 (6th Cir. 1991).
Federal courts have a strict duty to exercise the jurisdiction conferred upon them by Congress. Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 716 (1996) (citing Colorado RiverWater Conservation District v. United States, 424 U.S. 800, 821 (1976) (“[F]ederal courts have a ‘virtually unflagging obligation . . . to exercise the jurisdiction given them'”). “Abstention from the exercise of federal jurisdiction ‘is the exception, not the rule;' ordinarily, a federal court must decide cases properly before it.” Knudsen Corp. v. Nevada State Dairy Com., 676 F.2d 374, 376 (9th Cir. 1982) (quoting Colorado River, 424 U.S. at 813).
Under the Burford abstention doctrine, federal district courts may exercise discretion to “decline to rule on an essentially local issue arising out of a complicated state regulatory scheme.” United States v. Morros, 268 F.3d 695, 705 (9th Cir. 2001) (quoting Knudsen, 676 F.2d at 376). The doctrine is grounded in principles of comity and federalism, where the exercise of jurisdiction by a federal court would either disrupt a state administrative process or state efforts to establish a coherent policy with respect to a matter of substantial public concern. Quackenbush, 517 U.S. at 723, 725, 728. A federal district court's discretionary authority to dismiss a civil action under the Burford abstention doctrine is limited to civil actions where the relief sought by the plaintiff is equitable or otherwise discretionary. See id. at 728-31. However, when the action is one at law, “Burford might support a federal court's decision to postpone adjudication of a damages action pending the resolution by the state courts of a disputed question of state law.” Id. at 730-31; id. at 731 (“[F]ederal courts have the power to dismiss or remand cases based on abstention principles only where the relief being sought is equitable or otherwise discretionary.”); Gilbertson v. Albright, 381 F.3d 965, 981 (9th Cir. 2004) (“When the Supreme Court has applied abstention principles to actions at law, it has only allowed stay orders, not orders dismissing the action entirely.”) (citing Quackenbush, 517 U.S. at 719-20).
Burford abstention only applies where:
(1) the state has chosen to concentrate suits challenging the actions of the agency involved in a particular court;
(2) federal issues could not be separated easily from complex state law issues with respect to which state courts might have special competence; and
(3) federal review might disrupt state efforts to establish a coherent policy. Knudsen, 676 F.2d at 377 (internal citation omitted).
Here, plaintiff seeks both money damages and equitable relief. She seeks both $3 million in economic and non-economic damages and reinstatement to her job. Second Am. Compl. 27, ECF 73. Under Quackenbush, the only application of Burford would be to stay these proceedings pending resolution of the ERB's determination of plaintiff's employment classification. However, plaintiff did not initiate proceedings with the ERB and has not sought leave to do so. Further, defendants concede there are disputed issues of material fact on five of plaintiffs' claims, including the First Amendment whistleblowing and retaliation claims, and that these claims should be tried before this court. Defendants present no authority for the position that this court could refuse to exercise jurisdiction over a single claim yet proceed to trial on the remaining claims under Burford. See Knudsen, 676 F.2d at 377 (“Burford abstention normally requires dismissal of the federal action.”); Isthmus Landowners Ass'n, Inc. v. State of Cal., 601 F.2d 1087, 1090 (9th Cir. 1979) (reversing dismissal under Burford and questioning the district court's decision to dismiss “the federal action altogether even though non-frivolous federal causes of action are alleged”). For these reasons, Burford abstention is not appropriate here.
iii. ERB Jurisdiction
Having found abstention is inappropriate, the question becomes whether the Oregon Supreme Court would find that the ERB has exclusive jurisdiction to make state employee classification determinations. See S.D. Myers, Inc. v. City & Cty. of San Francisco, 253 F.3d 461, 473 (9th Cir. 2001). That question is answered by looking to the terms of Oregon's statutes governing state personnel relations, O.R.S. ch. 240. When interpreting those statutes, the task is to discern the intent of the legislature. Black v. Coos Cty., 288 Or.App. 25, 29 (2017). The starting point is the text and context of a statute, because the “best evidence of the legislature's intent” is the text itself. Id. (citing State v. Gaines, 346 Or. 160, 171 (2009) and PGE v. Bureauof Labor and Industries, 317 Or. 606, 610 (1993)). As discussed below, the Oregon Supreme Court would likely find that the ERB has exclusive jurisdiction regarding this determination.
The Personnel Division of the Oregon Department of Administrative Services (“personnel division”) is charged under Oregon law with adopting a classification plan that defines the roles of state employees within the “classified service.” See O.R.S. 240.215(1). The agency appointing authority then allocates “positions within the various operating agencies to the classifications in the classification plan” with post-audit review by the personnel division. See id. § (2); O.R.S. 240.015(2) (defining “appointing authority” as “an officer or agency having power to make appointments to positions in the state service). All such classification decisions are subject to review by the ERB, and any state employee has a right to appeal the classification of his or her position directly to the ERB. See Miller, 2016 WL 4150030, at *4 (citing Donnellv. Briggs, 37 Or.App. 823, 827-28 (1978)).
The ERB is a quasi-judicial appellate board. See Knutzen v. Department of Ins. & Fin., 129 Or.App. 565, 568 (1994). The ERB has been delegated extensive rule-making authority in the context of public employee representation and unfair labor practices and dispute resolution in public and private employment. O.R.S. 240.086(3); O.R.S. 243.766(7); O.A.R. 115-010-0005. Among many other things, the ERB makes findings of fact and conclusions of law and issues final orders in contested case hearings pursuant to Oregon's Administrative Procedures Act, O.R.S. ch. 183. See Donnell, 37 Or.App. at 827-28; e.g., Lopez, 2005 WL 6132354, at *6 (management service appeal). State employees with a property interest in their continued employment are entitled to a pre-discharge hearing to determine whether statutorily defined grounds for discharge exist. Miller, 2016 WL 4150030, at *4; see O.R.S. 240.560, 240.570(4); see also Papadopoulos, 14 Or.App. at 157-158; Wheaton v. Webb-Petett, 931 F.2d 613, 617 (9th Cir. 1991). Such employees have the right to appeal their dismissals to the ERB. See O.R.S. 240.086(1), 240.560(1); see also, Knutzen, 129 Or.App. at 568 (discussing scope of ERB review applicable to management service employees). Specifically, O.R.S. 240.086(1) provides that
The duties of the Employment Relations Board shall be to:
(1) Review any personnel action affecting an employee, who is not in a certified or recognized appropriate collective bargaining unit, that is alleged to be arbitrary or contrary to law or rule, or taken for political reason, and set aside such action if it finds these allegations to be correct.(emphasis added). O.R.S. 240.560(1) provides that a “regular employee who is reduced, dismissed, suspended or demoted, shall have the right to appeal to the Employment Relations Board not later than 30 days after the effective date of the reduction, dismissal, suspension or demotion.” (emphasis added).
The ERB may set aside a dismissal if it “finds that the action complained of was taken by the appointing authority for any political, religious or racial reasons, or because of sex, marital status or age” or otherwise “not . . . in good faith for cause, ” and may order reinstatement of an employee terminated for such reasons “without the loss of pay.” O.R.S. 240.560(3), (4); e.g., Lopez, 2005 WL 6132354, at *5 (management service appeal). An appeal from dismissal is deemed timely if received by the ERB or mailed not later than 30 days after the effective date of the dismissal. See O.R.S. 240.560(1). The ERB's final decision may in turn be appealed to the Oregon Court of Appeals. See O.R.S. 240.563; O.R.S. 183.480; O.R.S. 183.482(1); e.g., Knutzen, 129 Or.App. at 568-71. Further, the federal district court in Miller found “it appears that the ERB is the only tribunal that hears state employee challenges to job-classification decisions (although as noted above the ERB's decisions are subject to appeal to the Oregon Court of Appeals, which is then authorized to review those decisions for error).” 2016 WL 4150030, at *8; see id. (collecting cases and explaining that a review of Oregon case law extending back to the inception of the personnel scheme pre-dating the Oregon civil service reveals cases in which the Oregon Court of Appeals considered public employee jobclassification questions (or related personnel issues) on appeal from either the ERB or its predecessor but no opinions in which any Oregon court considered such a question in the absence of such an appeal). Thus, the terms of the statute show, and decades of case law confirm, that the ERB has exclusive jurisdiction to make state employee classification determinations.
Plaintiff argues that she is not claiming she was unlawfully classified into executive service and represents she does not seek reversal of such a misclassification here. Rather, she argues defendants have retaliated against her by asserting she had been reclassified into executive service and relying on that assertion as a pretext for denying her the pre-termination process afforded to management service employees. Pl.'s Suppl. Br. 5, ECF 100. Regardless, plaintiff cannot avoid the fact that the classification of her position is an element of her claim for procedural due process.
In Ahern v. Oregon Public Employees Union, by way of example, public union members picketed and distributed leaflets at an elected county commissioner's business after renegotiation of the union's collective bargaining agreement soured. 329 Or. 428, 431 (1999). The commissioner sued for intentional interference with economic relations, and the trial court issued a preliminary injunction restraining the picketing activity under O.R.S. 243.672, the statute governing unfair labor practices. Id. at 432. The Oregon Supreme Court held that O.R.S. 243.676 confers to the ERB “jurisdiction over unfair labor practice complaints that occur in the context of labor disputes.” Id. at 433, 436 n.4; O.R.S. 243.676 (“the Employment Relations Board or its agent shall. . . .”). The question before the Oregon Supreme Court was whether the commissioner could avoid the ERB's jurisdiction to determine whether an unfair labor practice had been committed by alleging the unfair labor practice as an element of his tort claim. Id. at 433. The court answered in the negative because resolving the tort claim necessarily required determining whether an unfair labor practice had been committed. Permitting the trial court to exercise jurisdiction would have created a danger of inconsistent rulings about what acts may constitute an unfair labor practice. Id. at 435.
By contrast, in Black v. Coos County, the Oregon Court of Appeals found a plaintiff's common-law claims for negligent misrepresentation and unjust enrichment were not within the exclusive jurisdiction of the ERB because nothing alleged in those claims “depend[ed], as a predicate, upon any determination of the sort to be made by ERB.” 288 Or.App. 25, 35 (2017); see also Eagle Point Educ. Ass'n/SOBC/OEA v. Jackson Cty. Sch. Dist. No. 9, 880 F.3d 1097, 1108 (9th Cir. 2018) (finding ERB did not have exclusive jurisdiction over state constitutional claim because the claim was “not contingent” on state labor laws. “Because the resolution of Plaintiffs' claims does not risk an inconsistent ruling on which acts constitute unfair labor practices, those claims fall outside the scope of the ERB's exclusive jurisdiction and may be pursued in the current action.”).
Here, plaintiff's procedural due process claim is contingent on the determination she had a position in management service, like the Ahern plaintiff's claim for intentional interference with economic relations was contingent on the determination than an unfair labor practice had been committed. In this regard, the federal issues raised by plaintiff's procedural due process claim are “inseparable from the state-law job-classification question that Oregon has determined should be addressed by the ERB.” Miller, 2016 WL 4150030, at *8. “As a matter of law, the property interest in continued employment that is requisite to that claim must be determined by reference to state law rather than to federal law.” Id. (citing Roth, 408 U.S. at 577). “Were this court to issue a job-classification finding in connection with resolving the merits of [plaintiff's procedural due process claim], the possibility would necessarily exist that the ERB could, in some future case, issue an inconsistent decision on the same job-classification question.” Id. at *9.
4. Equitable Estoppel
Plaintiff further argues defendants should be equitably estopped from claiming either that the ERB has exclusive jurisdiction or that plaintiff had no right to make a written presentation to Saiki before her dismissal. Pl.'s Resp. Mot. Summ. J. 17-18, ECF 91. Plaintiff's equitable estoppel arguments lack merit. Plaintiff invokes the doctrine of equitable estoppel as articulated in Hampton v. Paramount Pictures Corp., 279 F.2d 100 (9th Cir. 1960), and Lloyd v. U.S.Marshals Serv., No. CIV.05-3032-AA, 2006 WL 367867, at *5 (D. Or. Feb. 15, 2006), to argue the state “should be estopped from now disputing the very positions it took earlier.” Pl.'s Resp. Mot. Summ. J. 20, ECF 91. Plaintiff asserts defendants should be equitably estopped both from claiming the ERB has exclusive jurisdiction over plaintiff's claims and from claiming plaintiff had no right to make a written presentation before plaintiff's discipline was decided because of statements DHS' counsel made by email to plaintiff's counsel before plaintiff was terminated.
In Hampton, a copyright infringement case, the defendant asserted the principle of estoppel to argue that the plaintiff studio's knowledge of the open use and advertising of the film at issue “allowed [the defendant] to change his position” and the plaintiff studio was “therefore estopped to enjoin the exhibition of the film.” 279 F.2d at 104. The Ninth Circuit applied a four-part test for the “defense of estoppel”: (1) The party to be estopped must know the facts; (2) he must intend that his conduct shall be acted on or must so act that the party asserting the estoppel has a right to believe it is so intended; (3) the latter must be ignorant of the true facts; and (4) he must rely on the former's conduct to his injury. It is unclear how the test for the “defense of estoppel” employed in Hampton could provide relief to plaintiff, who is the one asserting the claims here.
Lloyd concerned the tolling of the statute of limitations for failure to exhaust administrative remedies based on the defendants' affirmative misrepresentations about those administrative remedies. The Lloyd court allowed the plaintiff to commence his civil action after finding the defendants were estopped from asserting the plaintiff had not exhausted his administrative remedies, which the court noted was not a jurisdictional prerequisite to filing suit in federal court. 2006 WL 367867, at *5. It is also unclear how the test employed in Lloyd, which requires consideration of “the extent to which the purposes of the limitation period have been satisfied, ” could work to somehow preserve plaintiff's procedural due process claim. 2006 WL 367867, at *5.
For all these reasons, plaintiff's procedural due process claim fails as a matter of law. The remaining arguments, including whether the individual defendants are entitled to qualified immunity, need not be reached.
RECOMMENDATIONS
Defendants' motions to dismiss (ECF 69, 74) should be granted, defendants' motion for partial summary judgment (ECF 76) should be granted, and plaintiff's motion to strike (ECF 94) should be denied as moot.
SCHEDULING ORDER
These Findings and Recommendations will be referred to a district judge. Objections, if any, are due Wednesday, May 05, 2021. If no objections are filed, then the Findings and Recommendations will go under advisement on that date. Alternatively, plaintiff may file a complaint with the Oregon Employment Relations Board to seek a ruling that she was in management service when terminated and move to stay these proceedings pending the outcome of that determination.
If objections are filed, then a response is due within 14 days after being served with a copy of the objections. When the response is due or filed, whichever date is earlier, the Findings and Recommendations will go under advisement.
NOTICE
These Findings and Recommendations are not an order that is immediately appealable to the Ninth Circuit Court of Appeals. Any Notice of Appeal pursuant to Rule 4(a)(1), Federal Rules of Appellate Procedure, should not be filed until entry of a judgment.