Crosby v. Hopkins et al
ORDER granting 18 Motion to Dismiss. The trial scheduled for October 9, 2012 is cancelled. Signed by Judge James M. Moody on 4/16/12. (kpr)
IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF ARKANSAS
GEORGE HOPKINS, et al
Pending is the Motion to Dismiss filed by the Defendants. The Plaintiff has responded to
the Motion and the Defendants have replied. After review of the pleadings, the Court notified
the parties that the Motion to Dismiss was being converted to a motion for summary judgment
pursuant to Rule 12(d) of the Federal Rules of Civil Procedure. (ECF No. 28). The Court
granted the parties additional time to object to the conversion and to submit supplemental
material in support of their respective position. The parties neither objected to conversion of the
motion nor supplied additional material. For the reasons stated below, the Court has determined
that the Defendants’ Motion should be GRANTED.
Plaintiff worked for the Arkansas Teacher Retirement System (“ATRS”) as the Senior
Investment Analyst from December 2009 until her termination on February 24, 2011. ATRS is a
retirement program created by the Arkansas Legislature at Ark. Code Ann. § 24-7-201 et seq.
The Chairman of the Board of ATRS is appointed by the Governor and the other Board members
are elected by their constituents. The Board is accountable to the Legislative Joint Committee on
Public Retirement and Social Security Programs.
Defendant George Hopkins is the Executive Director of ATRS. Defendant Dr. Richard
Abernathy is the Executive Director of the Board and the remaining defendants are members of
As Senior Investment Analyst, Plaintiff analyzed the investments in the ATRS portfolio.
In July 2010, Defendant Hopkins scheduled a meeting with Michael Tennenbaum, principal of a
potential investment fund, the Tennenbaum Opportunities Fund IV (the “Fund”). Plaintiff,
Hopkins, and Leslie Ward met with Tennenbaum about the Fund. At the conclusion of the
meeting, Plaintiff and Leslie Ward told Hopkins that they could not recommend pursuing the
investment. Franklin Park of PA, the Private Equity Consultant for ATRS, performed
preliminary due diligence on the Fund and also did not recommend it.
Regardless, Hopkins continued to have discussions with Tennenbaum and ultimately
requested that Hewitt Ennis Knupp of Chicago, the ATRS General Consultant, conduct due
diligence on the Fund. Hopkins also emailed Franklin Park’s confidential due diligence report
on the Fund to Tennenbaum. Tennenbaum disputed some of the issues raised by Franklin Park.
In January 2011, Hopkins again requested that Franklin Park conduct a full due diligence on the
Fund and asked that the report be expedited and finished by the February 2011 Board meeting.
The Fund needed $350 million in commitments by February 15, 2011 or the other investors
could pull their commitments and walk away.
Plaintiff was not included in any further communications about the Fund. She was not
scheduled to be present at the February 2011 Board meeting because she was going out of town.
No agenda for the meeting was circulated. However, Plaintiff saw a preliminary agenda on a coworker’s desk which listed the Fund commitment as a topic. Plaintiff talked to Gail Bolden,
CFO Bob West, Chief Auditor Brenda West, Chief Legal Advisor Laura Gilson and Leslie Ward
about her concerns regarding the Fund and how the deal was being done. According to Plaintiff,
each individual agreed with her concern.
On January 7, 2011, Plaintiff e-mailed Hopkins and P.J. Kelly of Hewitt Ennis Knupp
asking why the Fund was included on the preliminary Investment Committee agenda. Plaintiff
did not receive a response to the e-mail. Through discovery, Plaintiff learned that Hopkins told
P.J. Kelly that if he wanted any more comment from the Plaintiff on this issue, he would ask her.
While Plaintiff was on vacation, the Board approved the $40 million commitment to the
Fund. The closing occurred on February 15, 2011, two days prior to the February 17 deadline
On February 16, 2011, Plaintiff sent Hopkins an e-mail suggesting that Hopkins had
learned compelling information about the Fund. Hopkins responded and forwarded the e-mail to
Wayne Greathouse with ATRS.
Also in February, 2011, Hopkins directed Plaintiff to monitor the ATRS website. On
February 23, 2011, Plaintiff noticed that her name was included on the website but that her title
was incorrectly listed as Analyst and Cash Flow Specialist rather than Senior Investment
Analyst. Plaintiff asked a data processing clerk about the mistake and the clerk stated that
Hopkins gave her the information. Plaintiff sent the clerk an e-mail stating that Hopkins had
given her the incorrect information and directed the clerk to correct Plaintiff’s title. Plaintiff was
terminated the following day.
Plaintiff sent a letter to the Board of Trustees of ATRS informing them of the situation
and asking for an opportunity to visit with them. Plaintiff received an e-mail from Chairman of
the Board Richard Abernathy stating that “the situation should be looked at as to the process that
was used to get the commitment approved by the Board.” Compl. At p. 8. Plaintiff did not
receive any further communication from the Board.
On August 19, 2011, Plaintiff filed suit against the Defendants for violation of the
Arkansas Whistleblower Act, wrongful discharge and violation of her federal rights to Free
Speech, Equal Protection, and Due Process of the law. The Defendants have filed a motion to
dismiss Plaintiff’s federal claims based upon Plaintiff’s failure to state a claim, absolute
immunity, and qualified immunity. Further, Defendants ask the Court to decline to exercise
supplemental jurisdiction over Plaintiff’s state law claims once her federal claims are dismissed.
Standard for Summary Judgment
Summary judgment is appropriate only when there is no genuine issue of material fact, so
that the dispute may be decided solely on legal grounds. Holloway v. Lockhart, 813 F.2d 874
(8th Cir. 1987); Fed. R. Civ. P. 56. The Supreme Court has established guidelines to assist trial
courts in determining whether this standard has been met:
The inquiry is the threshold inquiry of determining whether there
is a need for trial -- whether, in other words, there are genuine
factual issues that properly can be resolved only by a finder of fact
because they may reasonably be resolved in favor of either party.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986).
The Eighth Circuit Court of Appeals has cautioned that summary judgment should be
invoked carefully so that no person will be improperly deprived of a trial of disputed factual
issues. Inland Oil & Transport Co. v. United States, 600 F.2d 725 (8th Cir. 1979), cert. denied,
444 U.S. 991 (1979). The Eighth Circuit set out the burden of the parties in connection with a
summary judgment motion in Counts v. M.K. Ferguson Co., 862 F.2d 1338 (8th Cir. 1988):
[T]he burden on the moving party for summary judgment is only to
demonstrate, i.e., ‘[to] point out to the District Court,’ that the
record does not disclose a genuine dispute on a material fact. It is
enough for the movant to bring up the fact that the record does not
contain such an issue and to identify that part of the record which
bears out his assertion. Once this is done, his burden is
discharged, and, if the record in fact bears out the claim that no
genuine dispute exists on any material fact, it is then the
respondent’s burden to set forth affirmative evidence, specific
facts, showing that there is a genuine dispute on that issue. If the
respondent fails to carry that burden, summary judgment should be
Id. at 1339. (quoting City of Mt. Pleasant v. Associated Elec. Coop., 838 F.2d 268, 273-274 (8th
Cir. 1988) (citations omitted)(brackets in original)). Only disputes over facts that may affect the
outcome of the suit under governing law will properly preclude the entry of summary judgment.
Anderson, 477 U.S. at 248.
Analysis of the Law
Section 1983 Federal Constitutional Rights Claims
Plaintiff has voluntarily dismissed her § 1983 claims against ATRS because ATRS is
absolutely immune under the Eleventh Amendment. She also concedes that the official capacity
Defendants are immune from suit for monetary damages. Therefore, the federal claims against
ATRS and the federal claims for monetary damages from the official capacity Defendants are
Plaintiff explains that her § 1983 claims against the individual Defendants in their official
capacities are for prospective injunctive relief and declaratory relief and, therefore, are not
barred by Eleventh Amendment immunity. Plaintiff is correct. Assuming that she has stated a §
1983 claim for violation of her Constitutional rights, Plaintiff can seek injunctive and declaratory
relief against the individual Defendants in their official capacities.
Because the Court finds that Plaintiff may be able to seek this relief, the Court must
consider whether Plaintiff has set forth a violation of a federal Constitutional right under the
First Amendment or Fourteenth Amendment.
First Amendment Rights
“[T]he First Amendment protects a public employee’s right, in certain circumstances, to
speak as a citizen addressing matters of public concern.” Garcetti v. Ceballos, 547 U.S. 410,
417, 126 S.Ct. 1951, 1957 (2006). The Court must first determine whether Plaintiff spoke as a
citizen on a matter of public concern. If the answer is yes, the question becomes whether the
ATRS had an adequate justification for treating Plaintiff differently from any other member of
the general public. Id. at 418, 1958.
In Garcetti, a calendar deputy attorney for the Los Angeles County Prosecuting
Attorney’s Office filed suit against his supervisors for violation of his First Amendment rights
when he was reassigned, transferred and denied a promotion. Cabella alleged that these “adverse
actions” were taken against him in retaliation for his disagreement with the defendants on the
propriety of an affidavit filed by the Sheriff’s Department. The United States Supreme Court
found that Ceballos did not speak as a citizen but rather as an employee, a prosecutor fulfilling a
responsibility to advise his supervisor. “We hold that when public employees make statements
pursuant to their official duties, the employees are not speaking as citizens for First Amendment
purposes, and the Constitution does not insulate their communications from employer
discipline.” Id. at 421, 1961.
The Court finds that Plaintiff’s speech regarding investment in the Fund to be a statement
made pursuant to Plaintiff’s official duties. Regardless of whether she was invited to all
meetings regarding the Fund, it was Plaintiff’s job to review all investments for ATRS. Her
statements regarding ATRS’ investment in the Fund and the procedures which Hopkins used in
his recommendation of the Fund were, therefore, made pursuant to her official job duties and are
not insulated from employer discipline. Defendants’ motion for summary judgment of Plaintiff’s
First Amendment claim is granted.
Procedural Due Process
Plaintiff must show that she has been deprived of a constitutionally protected life, liberty
or property interest to establish a violation of procedural due process. “A person must have a
legitimate claim of entitlement to his or her employment to have a property interest in it.
Whether the employee had a legitimate claim of entitlement—and thus, a constitutionally
protected property interest—depends on state law and the terms of his employment.” Mulvenon
v. Greenwood, 643 F.3d 653, 657 (8th Cir. 2011) (internal citations omitted).
Arkansas is an “at will” employment state. See Skrable v. St. Vincent Infirmary, 943
S.W.2d 236, 237 (Ark. App. 1997). “It is the general rule that when the term of employment in a
contract is left to the discretion of either party, or left indefinite, or terminable by either party,
either party may put an end to the relationship at will and without cause.” Id. Plaintiff has not
presented her employment contract or an ATRS handbook which states that her employment
with ATRS could be terminated only for good cause or that she held her position with ATRS for
a specific period of time. Plaintiff has failed to provide any evidence which shows that she had a
constitutionally protected property interest in her employment. Therefore, the Court finds that
Defendants’ motion for summary judgment of Plaintiff’s procedural due process claim must be
Substantive Due Process
As with Plaintiff’s procedural due process claim, “the possession of a protected life,
liberty, or property interest is a condition precedent” to her substantive due process claim.
Mulvenon v. Greenwood 643 F.3d 653, 659 (8th Cir. 2011) (citing Singleton v. Cecil, 176 F.3d
419, 424 (8th Cir. 1999) (en banc) (stating that “the possession of a protected life, liberty, or
property interest is a condition precedent to any due process claim”)). As stated above, Plaintiff
has not established a protected life, liberty or property interest in her job. Accordingly,
Defendants’ motion for summary judgment of Plaintiff’s substantive due process claim is
Equal Protection Rights
Plaintiff has not set forth any facts to support her allegation that the Defendants violated
her right to equal protection. Therefore, Defendants’ motion for summary judgment of
Plaintiff’s equal protection claim is granted.
State Law Claims
After dismissal of Plaintiff’s federal claims, the Court declines to exercise supplemental
jurisdiction over the remaining state law claims. See 28 U.S.C. § 1367(a), (c); Crest Const. II,
Inc. v. Doe, 660 F.3d 346, 359 (8th Cir. 2011) (“A district court's decision whether to exercise
that jurisdiction after dismissing every claim over which it had original jurisdiction is purely
For these reasons, Defendants’ Motion to Dismiss which was converted by the Court to a
motion for summary judgment (Docket # 18) is GRANTED. The Clerk is directed to close the
case. The trial scheduled for October 9, 2012 is cancelled.
IT IS SO ORDERED this 16th day of April, 2012.
James M. Moody
United States District Judge
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