Lavender et al v. Carey et al

Filing 17

MEMORANDUM ORDER re 3 MOTION to Dismiss filed by Kim Hawkins, City of Dover Council, Scott Koenig, City of Dover is DENIED WITHOUT PREJUDICE to renew after Plaintiffs file a second amended complaint. Signed by Judge Leonard P. Stark on 3/19/15. (ntl)

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE

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DEWEY RAY LAVEND ER and
STEVEN WARREN,
Plaintiffs,
C.A. No. 13-2042-LPS

V.

SCOTT KOENIG, individually and
in his official capacity as City Manager;
KIM HAWKINS, individually and in
her official capacity as Director of Human
Resources; the CITY OF DOVER COUNCIL
and the CITY OF DOVER,
Defendants.
MEMORANDUM ORDER

At Wilmington this 19th day of March, 2015:
Having reviewed the parties' briefing (D.I. 4, 5, 6) and heard oral argument on July 22,
2014 ("Tr."), IT IS HEREBY ORDERED that Defendants' motion to dismiss (D.I. 3) is
DENIED WITHOUT PREJUDICE to renew after Plaintiffs file a second amended complaint as
permitted by this Memorandum Order.
1.

Dewey Ray Lavender and Steven Warren ("Plaintiffs") worked for the city of

Dover, Delaware ("the City"), at the City's power generating plant. In February 1996, when the
Plaintiffs each had about 15 years of service with the City, the City negotiated a contract with an
operating services company ("Duke") to operate the plant going forward. (D.I. 4 Ex. A at 7) In
lieu of becoming unemployed, Plaintiffs were offered the opportunity to become employees of
Duke. They chose to work for Duke, and elected a 50% cash-out option for their accumulated
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sick leave benefits while remaining vested in the City's pension plan. (Id) In July 2012, the
Plaintiffs applied for pension benefits and were denied. (Id at 5)
2.

Plaintiffs appealed the denial to the Dover City Council ("the Council") on

September 19, 2012. (Id at 5) Plaintiffs' counsel, in preparation for a hearing on the Plaintiffs'
appeal at the November 26, 2012 meeting of the Council, submitted a letter brief via electronic
mail to the City's solicitor on November 20, 2012. (D.I. 4 Ex. F) Attached to that letter were
exhibits, including, among other things, copies of letters from Duke offering employment to the
Plaintiffs in February 1996 (D.I. 4 Ex. B). An agenda produced for the November 26, 2012
Council meeting contained, as attachments, copies of these letters, as well as copies of a
spreadsheet summarizing personnel decisions for the Duke hires (D.I. 4 Ex. C), copies of
summarized sick leave accumulations with the City for both Plaintiffs (D.I. 4 Ex. D), and copies
of Statement of Intent forms filed by the Plaintiffs with the City (D.I. 4 Ex. E). These exhibits
disclose in various places financial information specific to Plaintiffs, particularly salaries and
sick leave accumulations, as well as their home addresses. Publication of the exhibits was not
expected by Plaintiffs and resulted in the delay and rescheduling of their appeal. (Tr. at 19-20)
The Council met in executive session on May 6, 2013 and affirmed the denial of Plaintiffs' claim
for pension benefits. (D.I. 4 Ex. A at 6)
3.

Plaintiffs filed this action against the City, Council, Scott Koenig (individually

and in his capacity as City Manager), and Kim Hawkins (individually and in her capacity as
Director of Human Resources). (D.I. 4 Ex. A, at 1) Plaintiffs first filed their complaint in the
Superior Court of Delaware in and for Kent County on August 21, 2013. Before service was

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effected, an amended complaint was filed and served on December 6, 2013. Defendants
removed the action to the District of Delaware on December 19, 2013.
4.

Plaintiffs press six counts:
a.

Declaratory Judgement. Plaintiffs request to be declared "eligible
employees" under the City of Dover Code, and thereby entitled to pension
benefits. (D.I. 4 Ex. A at 3)

b.

Breach of Contract. Plaintiffs claim a contractual right to pension benefits
from the City and assert that these benefits were improperly denied. (D.I.
4 Ex. A at 4-10)

c.

Breach of Implied Covenant of Good Faith and Fair Dealing. Plaintiffs
allege that Defendants acted in bad faith by misrepresenting the options
available to Plaintiffs during the transition of control of the City power
plant in 1996. (D.I. 4 Ex. A at 10-11)

d.

Violation of 42 U.S.C. § 1983 (Koenig and Hawkins). Plaintiffs assert a
"right of informational privacy" grounded in the First, Third, Fourth,
Fifth, and Ninth Amendments of the U.S. Constitution, which Defendants
Koenig and Hawkins allegedly violated by publishing documents
containing Plaintiffs' personal information. (D.1. 4 Ex. A at 11-12)

e.

Violation of Delaware Const. Art. 1, §9 (Koenig and Hawkins). Plaintiffs
assert a violation of their rights under the Delaware Constitution. (D.I. 4
Ex. A at 12-14)

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f.

Violation of 42 U.S.C. § 1983 (City and Council). As in the fourth count,
above, Plaintiffs assert that the City and Council violated their right to
privacy by publication of their personal information. Plaintiffs further
allege in this count that the City and Council acted with deliberate
indifference to Plaintiffs' rights, specifically by failing to supervise or
train City and Council employees or personnel. (D.I. 4 Ex. A at 14-15)

5.

Plaintiffs seek declaratory relief as well as compensatory and actual damages,

consequential damages, costs and attorney fees, pre- and post-judgment interest, and punitive
damages. (D .I. 1 Ex. A at 12-13)
6.

On January 29, 2014, Defendants filed a motion for partial dismissal of the

§ 1983 claims and the Delaware Constitution claim, pursuant to Fed. R. Civ. Proc. 12(b)(6) for
failure to state a claim on which relief may be granted. (D.I. 3) 1 Evaluating a motion to dismiss
under Federal Rule of Civil Procedure 12(b)(6) requires the Court to accept as true all well-pled
factual allegations of the complaint. See Spruill v. Gillis, 372 F.3d 218, 223 (3d Cir. 2004).
"The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to
offer evidence to support the claims." In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410,
1420 (3d Cir. 1997) (internal quotation marks omitted). Thus, the Court may grant such a
motion to dismiss only if, after "accepting all well-pleaded allegations in the complaint as true,
and viewing them in the light most favorable to plaintiff, plaintiff is not entitled to relief." Maio

Although Defendants' motion was untimely, see F.R.C.P. 81(c), Plaintiffs acknowledge (Tr. at
27) that the Court has discretion to consider it nonetheless and the Court has decided to exercise
this discretion. Particularly at this early stage of the proceedings, and given the lack of prejudice
to Plaintiffs, the Court finds it appropriate to consider Defendants' motion on the merits.
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v. Aetna, Inc., 221 F.3d 472, 481-82 (3d Cir. 2000) (internal quotation marks omitted).
However, "[t]o survive a motion to dismiss, a civil plaintiff must allege facts that 'raise a right to
relief above the speculative level on the assumption that the allegations in the complaint are true
(even if doubtful in fact)."' Victaulic Co. v. Tieman, 499 F.3d 227, 234 (3d Cir. 2007) (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). A claim is facially plausible "when the
plaintiff pleads factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). At
bottom, "[t]he complaint must state enough facts to raise a reasonable expectation that discovery
will reveal evidence of [each] necessary element" of a plaintiffs claim. Wilkerson v. New Media
Tech. Charter Sch. Inc., 522 F.3d 315, 321 (3d Cir. 2008) (internal quotation marks omitted).
The Court not obligated to accept as true "bald assertions," Morse v. Lower Merion Sch. Dist.,
132 F.3d 902, 906 (3d Cir. 1997) (internal quotation marks omitted), "unsupported conclusions
and unwarranted inferences," Schuylkill Energy Res., Inc. v. Pennsylvania Power & Light Co.,
113 F.3d 405, 417 (3d Cir. 1997), or allegations that are "self-evidently false," Nami v. Fauver,
82 F.3d 63, 69 (3d Cir. 1996).
7.

By their motion, Defendants seek to dismiss just the § 1983 claim against Koenig

and Hawkins, the Delaware Constitutional claim against Koenig and Hawkins, and the § 1983
claim against the Council and City. 2 Defendants assert multiple bases for dismissal, including

1f the motion were granted in full, all that would remain are the state-law claims for declaratory
judgment, breach of contract, and breach of the implied covenant of good faith and fair dealing.
The Court agrees with what it understands to be the parties' unanimous view that if, either by
Plaintiffs' choice in an amended complaint or by operation of a court order following a motion
to dismiss an amended complaint, this case eventually consists of only state-law claims, the
Court should refrain from exercising its supplemental jurisdiction and should instead remand the
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that Plaintiffs fail to state a claim on which relief may be granted because there is no

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constitutional right to informational privacy (D.I. 4 at 7-10); and even ifthere is such a right it

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was not violated here (id. at 12-14); and further the municipal Defendants cannot be liable
because Plaintiffs fail to adequately plead any disclosure of their private information was done
pursuant to a "policy or custom" (id. at 14); and finally the Council, as an agency of the State of
Delaware, lacks capacity to sue or be sued (id. at 15).
8.

Although Defendants have argued that there is no constitutionally protected right

to informational privacy (see D.I. 4 at 7), and they reasonably wish to preserve their right to
maintain that argument (see Tr. at 8), they do not meaningfully challenge Plaintiffs' view that
the Third Circuit, in Fraternal Order of Police v. City of Phi/a., 812 F.2d 105 (3d Cir. 1987),

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"has acknowledged the existence of a constitutional right to informational privacy." (D.I. 5 at 6)
The Court adopts the same approach taken by others, see, e.g., NASA v. Nelson, 562 U.S. 134
(2011); Warner v. Twp. ofS. Harrison, 885 F.Supp.2d 725 (D.N.J. 2012), and assumes for
purposes of the pending motion that the Constitution does protect some types of private, personal
information.
9.

Having assumed there is a constitutional right to informational privacy, the Court

must next assess whether any of the information regarding Plaintiffs that Defendants allegedly
disclosed to the public constitutes information in which Plaintiffs had a reasonable expectation
of privacy. See Fraternal Order of Police, 812 F.2d at 112. It appears that some of the
disclosed information is of this type, while some of it is not. The information that appears to be

case to state court. (See Tr. at 17-18, 27)
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within the scope of the assumed right is Plaintiffs' salary and bonus information. Although the
disclosed salary information dates from 1996, the parties agree (although it is not alleged in the
Complaint) that from this historical information one with knowledge of the City's pay scales
could calculate Plaintiffs' approximate salaries as of 2012, and such more recent personal
financial information would seem to be within the scope of an informational privacy right.
Similarly, Defendants allegedly disclosed the amount of a bonus payment that will be paid to
Plaintiffs in the near future (2020), which is again present-day financial information of a type in
which Plaintiffs would seem to have a reasonable expectation of privacy. By contrast, Plaintiffs'
home addresses in 1996 appear to be purely historical information (Plaintiffs do not allege these
to be their current addresses) that would not be within the scope of a right to informational
privacy.
10.

The Court must next weigh Plaintiffs' interest in keeping their private information

from disclosure against Defendants' interest in such disclosure. Here, as currently pled and
given the absence of evidence, it looks as if this balance favors Plaintiffs, although only slightly.
While Plaintiffs' interest in the privacy of the information at issue looks far less substantial than
the interests at stake in cases on which Plaintiffs rely, see, e.g., NASA, 562 U.S. at 140-41
(disclosure of use or possession of illegal drugs); Sterling v. Borough of Minersville, 232 F.3d
190 (3d Cir. 2000) (sexual orientation); Fraternal Order of Police, 812 F.2d at 113-16
(disclosure of medical history, debts, credit quality, gambling, and alcohol use); US. v.
Westinghouse Elec. Corp., 638 F.2d 570, 572 (3d Cir. 1980) (employee medical records),

Defendants have not articulated any reason why the information involved here had to be
disclosed to the public. Counsel appear to agree (although it is not pled, nor otherwise properly
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before the Court) that Council has the ability to operate (in part) in closed, "executive session,"
that it frequently does so when discussing detailed personnel matters (including discussions of
personnel information that is protected under the City's policies), and in fact it conducted part of
the consideration of Plaintiffs' very appeal in executive session. The public's right (if even
applicable here) to know the details, on an individual-by-individual basis, of how taxpayer
money is being spent on employee pensions does not seem to require immediate public
disclosure of such information prior to or during the public Council session addressing the
appeal. Defendants have not explained why such information could not be made public only
after an initial non-public discussion or even later in response to a proper Delaware Freedom of
Information Act ("FOIA") request.
11.

For several reasons, the Court does not today deny or grant the motion on its

merits. As noted in the discussion above, considerations that are potentially crucial to the
Court's analysis are not yet in the record, including whether, when, and how the Council
operates behind closed doors. Additionally, and importantly, Defendants only belatedly in their
Reply Brief made the argument that Plaintiffs waived any right to keep their information private
when they provided that information to Council in connection with their appeal. (See D.I. 7 at 14) Because Plaintiffs did not have an opportunity to respond to this argument in their brief, the
Court will not credit Defendants' argument in connection with the pending motion - but in
making a final, merits-related decision on a renewed motion it would be appropriate for both
sides to be heard in full on this point. Moreover, while allusion has been made in the briefing
and in oral argument to what information is protected under the City's personnel policy and

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FOIA, and also to whether the Council Defendants lack capacity to be sued, neither side has
provided the Court with any authority on any of these issues.
12.

A further reason the Court is permitting leave to amend and not resolving the

merits of the pending motion is that the Court would like any briefing on a future motion to
dismiss also to address a potential qualified immunity defense with respect to the individual

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defendants.
Accordingly, for the reasons stated above, IT IS HEREBY ORDERED that:
1.

Defendants' motion to dismiss (D.1. 3) is DENIED WITHOUT PREJUDICE to

renew in response to the filing of a second amended complaint, should Plaintiffs choose to file
such a complaint consistent with the terms of this Memorandum Order.
2.

Plaintiffs have until no later than thirty (30) days from the date of this

Memorandum Order to file a second amended complaint consistent with the terms of this
Memorandum Order. Should Plaintiffs fail to do so, their failure may be a basis for the Court to
dismiss this action.

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H~ Leonard P. Stark
United States District Court

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