Larry v. Powerski
Filing
37
OPINION AND ORDER Granting in Part and Denying in Part Defendant's 20 MOTION for Summary Judgment and Denying Plaintiff's 14 MOTION for Partial Summary Judgment. Joint Final Pretrial Order due on or before 12/14/2015. Signed by District Judge David M. Lawson. (SPin)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
YOLANDA LARRY,
Plaintiff,
v.
Case Number 14-14172
Honorable David M. Lawson
THERESA POWERSKI,
Defendant.
____________________________/
OPINION AND ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANT’S MOTION FOR SUMMARY JUDGMENT AND
DENYING PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT
Plaintiff Yolanda Larry was fired from her job as a patient representative at Flint, Michigan’s
Hurley Medical Center. The hospital said it terminated Larry for improperly accessing patient
medical records in violation of its policy under the Health Insurance Portability and Accountability
Act of 1996, Pub. L. 104-191, 110 Stat. 1936, (HIPAA). The plaintiff says those accusations were
trumped up by her immediate supervisor, Theresa Powerski, who was retaliating against her as a
result of the bad blood between them, which resulted from, among other things, Larry contacting
the Michigan Department of Civil Rights and lodging a complaint that Powerski (and therefore
Hurley) was discriminating against her on account of her race.
In the first round of litigation, Larry sued Hurley Medical Center in state court, alleging
claims of (1) wrongful discharge absent good cause, in breach of her employment contract; (2)
violation of the Michigan Whistleblower Protection Act; and (3) retaliatory discharge, contrary to
Michigan’s Elliott-Larsen Civil Rights Act. She took her case to trial and a jury awarded her
damages, including back and front pay, of more than $180,000. The present case is round two.
Larry now brings claims against Powerski individually based on the same facts but advancing
variant legal theories: (1) tortious interference with contractual relations (count I); (2) injurious
falsehood (count II); (3) denial of procedural due process via 42 U.S.C. § 1983 (count III); and (4)
First Amendment retaliation (count IV). Defendant Powerski has moved for summary judgment,
arguing, among other things, that the state court judgment precludes the present lawsuit. The
plaintiff has filed her own motion for partial summary judgment, contending that the undisputed
facts entitle her to a judgment as a matter of law on her procedural due process claim.
Although the legal theories in the state and federal lawsuits are not identical, the plaintiff’s
claims of tortious interference, injurious falsehood, and denial of procedural due process all are
barred by the doctrine of claim preclusion, because they are premised upon the same essential facts
and events underlying the plaintiff’s state court wrongful termination lawsuit, and defendant
Powerski, the plaintiff’s supervisor, was in privity with her employer, the state court defendant
hospital against whom the judgment was returned. The prior judgment does not bar the plaintiff’s
First Amendment retaliation claim, however, because that claim is based on a set of facts that is
distinct from the state court judgment’s factual foundation. Moreover, the discovery record in this
case establishes fact questions requiring a trial for resolution of that claim. For these reasons, the
defendant’s motion for summary judgment will be granted as to counts I through III of the
complaint, which will be dismissed, and denied as to count IV. The plaintiff’s motion for partial
summary judgment will be denied.
I.
Plaintiff Yolanda Larry began working for the Hurley Medical Center hospital on August
2, 1993 as a clerical assistant. She worked for the hospital in various clerical and administrative
positions for more than 19 years. For much of that time she was a benefits assistant in the hospital’s
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Human Resources department. On May 9, 2011, Larry transitioned to a position as an Assistant
Patient Representative. The hospital’s Patient Representative department handles all complaints by
patients about any issues they may have with the care received while at the hospital.
Defendant Theresa Powerski was the plaintiff’s supervisor at the time of the termination.
Powerski admitted in her answer to the complaint that (1) Hurley Medical Center is a public
corporation, (2) the defendant was employed by Hurley Medical Center during the time period
relevant to the complaint, and (3) the plaintiff’s employment contract gave her a protected property
interest cognizable under the Due Process Clause because she only could be terminated for good
cause.
During her tenure as a patient representative, the plaintiff received four performance
evaluations with scores equating to “Very Good” on the hospital’s employee performance rating
scale. The January 3, 2012 performance evaluation resulted in an “Outstanding” performance rating.
Despite the high marks she awarded the plaintiff, Powerski also inserted a number of
“counseling memos” into the plaintiff’s personnel file. That upset the plaintiff, and the memos later
were removed from her personnel file after the plaintiff, Powerski, and the head of the patient
representative department, Michael Burnett, met and agreed that the plaintiff needed some
“reeducation” about certain aspects of her job duties. After the meeting, Burnett requested the
removal of the counseling memos, because Burnett sensed that the plaintiff believed she had been
unfairly targeted by Powerski, and Burnett thought that a “fresh start” would be the best approach
to improving the situation. Burnett perceived “tension” between Powerski and the plaintiff, as a
result of the two “not communicating well with each other” and not “understand[ing] each others’
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motivations.” Nevertheless, Powerski testified that, before August 24, 2012, the plaintiff’s job “was
not in jeopardy.”
The hospital’s policy governing the patient representative program states that, when a
representative first receives a complaint, she immediately should attempt to understand and address
the problem by (1) diffusing tension and listening to the patient’s concerns; (2) explaining any
applicable policies and procedures to the patient; (3) coordinating with nurses or doctors involved
in the patient’s care to better understand the problem and possible solutions; (4) mediating any
disagreements or misunderstandings between the patient or family and caregivers; and (5) obtaining
direction as needed from doctors or risk management personnel. If the complaint cannot be resolved
informally, “at the point of origin,” then the patient representative proceeds to file an internal
grievance on the patient’s behalf. For recording and tracking such grievances, the hospital uses an
electronic database system called MIDAS.
In March 2012, the hospital began using an electronic system called EPIC to store and
control access to all patient medical records. Patient representatives had “read only” access to
medical records stored in EPIC, which they were allowed to view in the course of their duties for
the purpose of investigating patient complaints.
On May 21, 2012, the plaintiff had a meeting with defendant Powerski and Burnett. At that
meeting, Burnett told the plaintiff that Powerski had reported to him that the plaintiff had been
having inappropriate discussions with coworkers about salaries paid to managers at the hospital.
The plaintiff denied that she had any such conversations, and she told Burnett that she believed
Powerski was discriminating against her because of her race (African-American). Also in May
2012, the plaintiff told William Smith (presumably another employee of the hospital in an
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unspecified position) that Powerski had told the plaintiff that she was hired “to handle the African
American population.” Later, the plaintiff also told Vanessa Nelson (apparently another hospital
employee), that whenever a black patient came to the patient representative office, Powerski would
“find reasons not to assist them.” On August 24, 2012, when she was leaving work at the end of the
day, the plaintiff informed Powerski that she was going to “contact[] the Michigan Department of
Civil Rights regarding the racial discrimination perpetrated on Plaintiff and patients, as well as the
harassment and retaliation Plaintiff experienced in the workplace.”
Earlier on August 24, 2012, Powerski had delivered a memo to the plaintiff stating that she
was being investigated for accessing patient records without authorization, contrary to the hospital’s
HIPPA policy, and that the consequences could include termination. Powerski’s report of the
investigation states that she became aware of possible improper record accesses by the plaintiff
when she received an email from Belle Bell, the hospital’s privacy officer, involving six patients.
Along with her department head, Theresa Bourque, Powerski reviewed the information in the EPIC
and MIDAS systems and determined that for only two out of six of the patients in question, there
was a record of a patient complaint in MIDAS. Powerski arranged a meeting to discuss the other
four record accesses with the plaintiff, along with an earlier access to the medical records of the
plaintiff’s cousin on July 20, 2012. Powerski reported that the plaintiff stated she had handwritten
notes relating to three out of the four patients in question, but she wrote that, as of August 30, 2012,
the plaintiff had not provided those notes to her.
Powerski concluded in the “findings of investigation” section of her report that the plaintiff
had not explained adequately why she accessed the medical records of her cousin, because the
plaintiff told Powerski she received a complaint about her cousin’s medical care after 3:00 p.m., but
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the EPIC report showed that the plaintiff had accessed the records shortly after noon, and again
around 2:30 p.m. Powerski further concluded that there was no corroboration in any other medical
records for one of the alleged complaints of excessive wait time and a “rude nurse” that the plaintiff
said she investigated. Powerski concluded by writing: “I am substantiating that a violation of
HIPPA policy and work rule #33 of [the] Hurley Medical Center Employee Conduct Rules
occurred.”
The plaintiff insists that she never accessed any patient medical records for an improper
purpose. She testified that, on July 20, 2012, she accessed the records of her cousin because she
received a phone call around 11:30 a.m. from the cousin’s brother asking Larry to “check up on” her
cousin, “because of how [the hospital] treated her last time.” The plaintiff testified that she did not
tell Powerski that her cousin’s case was made known to her after 3:00 p.m., and that the statement
in Powerski’s report to that effect was false. As to the records of the other four patients that
Powerski asked her about, the plaintiff contends that she had accessed their records during her
informal investigations of their complaints, and she had handwritten notes on several of them.
Hospital Privacy Officer Bell testified that she never provided Powerski with any statement
that she had “substantiated a HIPPA violation” by the plaintiff. Instead, she merely informed
Powerski that the EPIC audit report indicated that a possible violation may have occurred, but
Powerski would have to investigate and reach her own conclusion, after reviewing the audit report
and talking to the employee and patient involved. Bell also testified that she had concerns about the
accuracy of the audit trails produced by the EPIC system, and she had run reports on her own
activity in the system that turned out to be inaccurate.
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Bell also testified that she had reviewed the EPIC audit report of accesses to several patient
records that Powerski had confronted the plaintiff with at the August 24, 2012 meeting. Bell said
that after reviewing the audit report, she had questions about whether it was accurate, and she had
never substantiated any violation based on that report. Bell also testified that she examined a
“Census Audit” that allegedly was produced by the plaintiff from the EPIC system. She asked
several other people familiar with the EPIC system whether the plaintiff could have produced such
a report with the level of access she was allowed in the system, and after some attempts to produce
such a report with the plaintiff’s credentials, it was determined that it could not be done. Bell could
not substantiate any HIPPA violation that had occurred based on the “Census Audit” report.
Former hospital Human Resource Director Rebecca Jackson testified that it was the policy
and practice of the hospital to have all suspected HIPPA policy violations substantiated by the
hospital’s privacy officer before terminating an employee, that she personally knew of several
occasions when Ms. Bell had substantiated such violations before other employees were terminated,
and that “if the Privacy Officer — Belle Bell — felt uncomfortable with the facts or circumstances
surrounding the potential HIPPA violation or could not substantiate the HIPPA violation, Hurley
Medical Center’s Human Resource Department would not recommend the discharge of the
employee.”
On August 30, 2012, the plaintiff was given a notice that she was suspended pending
termination, which was signed by Powerski and then head of the patient representative department,
Theresa Bourque. The notice stated that the plaintiff was suspended for violating “Work Rule #33,”
based on an investigation that concluded she had accessed patient records without authorization, in
violation of the hospital’s HIPPA policy. On September 21, 2012, hospital Human Resources
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Administrator David N. Szczepanski sent a notice to the plaintiff stating that her “suspension
pending permission to terminate” was converted to a termination.
The hospital’s employee grievance process allowed the plaintiff to pursue a grievance
regarding the decisions to suspend and terminate her by: (1) discussing her objections with her
immediate supervisor (in this case, Powerski); (2) discussing and reviewing the decisions with the
head of her department; (3) further discussing and reviewing the decisions with the Vice President
of Human Resources; and (4) finally, filing an appeal to the Civil Service Commission. The
defendant concedes that the fourth step was not available in August or September 2012, because the
City of Flint Civil Service Commission had been disbanded by the City’s Emergency Manager in
December 2011. However, the hospital points to a memorandum of understanding between the
hospital and the local union that provided for binding arbitration as an alternative external process
for reviewing employee grievances, after the Civil Service Commission was eliminated.
On September 25, 2012, four days after she was terminated, the plaintiff filed a complaint
in the Genesee County, Michigan circuit court raising claims for (1) breach of her employment
contract, because there was no good cause to fire her; (2) violating the Michigan Whistleblower
Protection Act; and (3) retaliatory discharge, contrary to Michigan’s Elliott-Larsen Civil Rights Act.
The hospital was the only defendant named in that lawsuit. After a jury trial in June 2014, a verdict
was returned in favor the plaintiff and against the hospital on her breach of contract claim, awarding
her back and future pay in excess of $180,000. The jury found for the hospital on the Whistleblower
and retaliation claims. Defendant Powerski was not named in the state court lawsuit in any capacity.
Larry filed her four-count complaint in this Court against Powerski on October 29, 2014.
The complaint raises claims for (1) tortious interference with contractual relations (count I); (2)
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injurious falsehood (count II); (3) denial of procedural due process via 42 U.S.C. § 1983 (count III);
and (4) first amendment harassment (count IV). Discovery closed on July 31, 2015, and the parties
filed their dispositive motions. The Court heard oral argument on October 14, 2015.
II.
The fact that the parties have filed cross motions for summary judgment does not
automatically justify the conclusion that there are no facts in dispute. Parks v. LaFace Records, 329
F.3d 437, 444 (6th Cir. 2003) (“The fact that the parties have filed cross-motions for summary
judgment does not mean, of course, that summary judgment for one side or the other is necessarily
appropriate.”). Instead, the Court must apply the well-recognized summary judgment standards
when deciding such cross motions: the Court “must evaluate each motion on its own merits and view
all facts and inferences in the light most favorable to the nonmoving party.” Westfield Ins. Co. v.
Tech Dry, Inc., 336 F.3d 503, 506 (6th Cir. 2003).
Summary judgment is appropriate “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.” Fed. R. Civ. P. 56(a).
A trial is required when “there are any 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 defendant contends that all the counts of the plaintiff’s complaint are barred by the
doctrine of claim preclusion, also known as res judicata. The facts supporting that argument are
largely undisputed. Where the material facts are mostly settled, and the question before the court
is purely a legal one, the summary judgment procedure is well suited for resolution of the case. See
Cincom Sys., Inc. v. Novelis Corp., 581 F.3d 431, 435 (6th Cir. 2009).
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A.
Powerski contends that all of the elements for the application of res judicata are satisfied as
to each of the plaintiff’s claims, because it is undisputed that the prior state court wrongful
termination lawsuit resulted in a decision on the merits, all of the claims in the present complaint
arise from the same “transaction” or operative facts, and the requirement of privity is satisfied by
the employer-employee relationship, where the individual defendant in the second action was the
plaintiff’s supervisor who allegedly wrongfully recommended her termination, and the defendant
in the previous wrongful termination lawsuit was the plaintiff’s employer. The plaintiff counters
that the defendant’s res judicata defense is foreclosed because it essentially would operate to impose
on plaintiffs a rule of compulsory joinder of all possible defendants in a wrongful termination
lawsuit, which is not required in state court proceedings by the Michigan Court Rules.
The doctrine of res judicata incorporates the idea that a party should have but one chance
to prosecute a civil claim in a court. It discourages multiple lawsuits directed toward the same
alleged wrong. See Washington v. Sinai Hosp of Greater Detroit, 478 Mich. 412, 418; 733 N.W.2d
755, 759 (2007). As one court explained:
Where a plaintiff has sued parties in serial litigation over the same transaction; where
plaintiff chose the original forum and had the opportunity to raise all its claims
relating to the disputed transaction in the first action; where there was a “special
relationship” between the defendants in each action, if not complete identity of
parties; and where although the prior action was concluded, the plaintiff’s later suit
continued to seek essentially similar relief — the courts have denied the plaintiff a
second bite at the apple.
Lubrizol Corp. v. Exxon Corp., 871 F.2d 1279, 1288 (5th Cir. 1989). Michigan courts have
explained that this “second bite” rule is intended to “relieve parties of the cost and vexation of
multiple lawsuits, conserve judicial resources, and, by preventing inconsistent decisions, encourage
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reliance on adjudication.” Hackley v. Hackley, 426 Mich. 582, 584, 395 N.W.2d 906, 907 (1986)
(quoting Allen v. McCurry, 449 U.S. 90, 94 (1980)).
The doctrine embraces two separate concepts — claim preclusion and issue preclusion.
“Claim preclusion, or true res judicata, refers to [the] effect of a prior judgment in foreclosing a
subsequent claim that has never been litigated, because of a determination that it should have been
advanced in an earlier action. Issue preclusion, [also called collateral estoppel,] on the other hand,
refers to the foreclosure of an issue previously litigated.” Mitchell v. Chapman, 343 F.3d 811, 819
n.5 (6th Cir. 2003). “The res judicata effect of a state-court judgment in federal court is governed
by the Full Faith and Credit Act, 28 U.S.C. § 1738.” Young v. Township of Green Oak, 471 F.3d
674, 680 (6th Cir. 2006) (citing Smith, Hinchman & Grylls, Assocs. Inc. v. Tassic, 990 F.2d 256, 257
(6th Cir. 1993) (concluding that the Full Faith and Credit Act requires a “federal court to look to
state court law of res judicata”)). That statute generally requires “federal courts to give preclusive
effect to state-court judgments whenever the courts of the State from which the judgments emerged
would do so.” Haring v. Prosise, 462 U.S. 306, 313 (1983) (quoting Allen, 449 U.S. at 96); see also
Migra v. Warren City School Dist. Bd. of Educ., 465 U.S. 75, 81 (1984) (“It is now settled that a
federal court must give to a state-court judgment the same preclusive effect as would be given that
judgment under the law of the State in which the judgment was rendered.”).
Application of section 1783 requires reference to the state’s laws of claim preclusion and
issue preclusion (although the Michigan Supreme Court “generally uses the terms ‘res judicata’ and
‘collateral estoppel’ rather than the phrases ‘claim preclusion’ and ‘issue preclusion.’” J.A.M. Corp.
v. AARO Disposal, Inc., 461 Mich. 161, 168 n.7, 600 N.W.2d 617, 620 n.7 (1999)). Under Michigan
claim preclusion law, “[a] second action is barred when (1) the first action was decided on the
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merits, (2) the matter contested in the second action was or could have been resolved in the first, and
(3) both actions involve the same parties or their privies.” Dart v. Dart, 460 Mich. 573, 586, 597
N.W.2d 82, 88 (1999); see also Smith, 990 F.2d at 257-58; Adair v. State, 470 Mich. 105, 121, 680
N.W.2d 386, 396 (2004)). “If the three elements are established, then res judicata serves to bar
‘every claim arising from the same transaction that the parties, exercising reasonable diligence,
could have raised but did not.’” Young, 471 F.3d at 680 (quoting Adair, 470 Mich. at 121, 680
N.W.2d at 396).
1.
a.
It is undisputed that Larry’s state court wrongful termination action resulted in a decision
on the merits when, after a jury trial, she received a verdict in her favor and an award of damages
for more than $180,000. The first element of the test is satisfied.
b.
The plaintiff argues that the third element cannot be met because the defendants in the two
lawsuits are not the same. But “[t]he parties to the second action need be only substantially identical
to the parties in the first action, in that the rule applies to both parties and their privies.” Peterson
Novelties, Inc. v. City of Berkley, 259 Mich. App. 1, 12, 672 N.W.2d 351, 359 (2003). “Regarding
private parties, a privy includes a person so identified in interest with another that he represents the
same legal right, such as a principal to an agent, a master to a servant, or an indemnitor to an
indemnitee.” Id. at 12-13, 672 N.W.2d at 359. “In order to find privity between a party and a
nonparty, Michigan courts require ‘both a substantial identity of interests and a working or
functional relationship in which the interests of the non-party are presented and protected by the
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party in the litigation.’” Ibid. (quoting Phinisee v. Rogers, 229 Mich. App. 547, 553-54, 582
N.W.2d 852, 854 (1998)). “This test is met when the previous governmental-unit Defendant [] and
the present-case [individually named defendants] have an employer-employee relationship,
regardless of whether the claims in the first suit were brought against the Defendants in the same
capacity as the claims in the second.” McCoy v. Michigan, 369 F. App’x 646, 650 (6th Cir. 2010).
In this case, the former and present defendants are in privity because, as the hospital’s
employee and the plaintiff’s former supervisor, Powerski qualifies as “a person so identified in
interest with another that [s]he represents the same legal right, such as a principal to an agent [or]
a master to a servant.” Peterson, 259 Mich. App. at 12-13, 672 N.W.2d at 359. The plaintiff argues
that there can be no privity because, even if she had joined Powerski in the state court action,
Powerski would have been sued only in her official capacity. However, the Sixth Circuit expressly
has held that privity is established “when the previous governmental-unit Defendant [] and the
present-case [individually named defendants] have an employer-employee relationship, regardless
of whether the claims in the first suit were brought against the Defendants in the same capacity as
the claims in the second.” McCoy, 369 F. App’x at 650; see also De Polo v. Greig, 338 Mich. 703,
710, 62 N.W.2d 441, 444 (1954) (“[A] determination of the issue in a suit brought against the
principal bars an action against the agents.”); Brown v. Burch, Porter & Johnson PLLC Law Firm,
No. 15-2167, 2015 WL 5737802, at *6 (W.D. Tenn. Sept. 30, 2015) (“[The Board of Education] was
the defendant in Brown 1, and is in privity with the [Board] employee Defendants in this case.”); LG
Sciences, LLC v. Putz, No. 11-10830, 2012 WL 1094336, at *5 (E.D. Mich. Mar. 30, 2012), aff’d,
511 F. App’x 516 (6th Cir. 2013) (“The test for privity among the parties is met when the parties
stand in an employer-employee relationship.”); Coatney v. City of Dearborn, No. 07-15371, 2009
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WL 322032, at *3 (E.D. Mich. Feb. 10, 2009) (“The individual defendants in the present matter were
not parties to the prior action; however, as employees of Defendant City of Dearborn, they are in
privity with the City of Dearborn.”). The third element has been satisfied.
Mitchell v. Chapman, 343 F.3d 811, 825 (6th Cir. 2003), relied upon by the plaintiff, does
not require a different result. That case applied principles of federal claim preclusion law
exclusively to federal claims brought first against a defendant agency and its employees in their
official capacity and later against the employees only in their individual capacities. Here, it is
Michigan’s version of the doctrine that governs. Young, 471 F.3d at 682 (“The res judicata effect
of a state-court judgment in federal court is governed by the Full Faith and Credit Act, 28 U.S.C.
§ 1738,” and “[w]ell-settled law directs federal courts to ‘give to a state court judgment the same
preclusive effect as would be given that judgment under the law of the State in which the judgment
was rendered.’” (quoting Migra., 465 U.S. at 81)). Moreover, although the plaintiff insists that
Mitchell prevents the application of res judicata to her individual claims against Powerski, the “rule
of differing capacities” set forth in Mitchell does not apply where the defendant was not named in
any capacity in the first lawsuit. The question at hand is not in what capacity the defendant was and
is sued (or, hypothetically would or could have been sued), but, instead, whether the defendant and
her employer stand in privity, whether the presently and previously asserted “[c]auses of action share
an identity [because] the facts and events creating the right of action and the evidence necessary to
sustain each claim are the same,” Heike,573 F. App’x at 483, and whether the present claims are
ones “arising from the same transaction that the parties, exercising reasonable diligence, could have
raised but did not” in the previous lawsuit. Young, 471 F.3d at 682.
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c.
As to the second element — that the claims were or could have been brought in the previous
action — the Sixth Circuit has held that claims sounding in denial of procedural due process and
other theories premised upon an allegedly wrongful termination are barred by a previous state court
lawsuit on a breach of contract or wrongful termination theory, where both lawsuits are premised
on the same operative facts. In Huntsman v. Perry Local Sch. Bd. of Educ., 379 F. App’x 456, 462
(6th Cir. 2010), the Sixth Circuit held that a subsequent due process lawsuit was barred by the
judgment in a previous state-court wrongful termination case, notwithstanding that the plaintiff only
had pleaded state law claims in his prior complaint:
The state law wrongful discharge claim is nearly identical to the federal procedural
due process claims Huntsman sought to bring in the instant case Admittedly,
Huntsman referenced only state law in his state complaint, but the federal claim is
essentially the same and could have been brought using the same language. The
federal procedural due process claim includes a two-prong analysis: (1) whether
Huntsman has a protected interest in his employment as a teacher and (2) whether
he was afforded the process he was due, which typically would require notice and a
pre-termination hearing. Huntsman’s pleading in state court would likely have been
sufficient for his federal claim simply by incorporating a reference to federal law.
Therefore, the district court properly applied the doctrine of res judicata in
dismissing the complaint.
Huntsman, 379 F. App’x at 462 (citations omitted). As the court of appeals explained, “[e]ven if
there may have been a colorable claim for nominal damages related to the lack of a hearing in
Huntsman’s federal procedural-due-process lawsuit, that claim should have been part of the
state-court litigation.” Id. at 463.
The gravamen of Larry’s tortious interference and injurious falsehood claims in counts I and
II is that the defendant lied in order to procure unlawfully the plaintiff’s termination by the hospital,
which, as the state court verdict now has established, was a wrongful breach of the plaintiff’s
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employment contract. The plaintiff contends that Powerski (1) fabricated charges that the plaintiff
improperly accessed patient medical records in violation of the hospital’s HIPPA policy; (2) falsely
said that the plaintiff “made a gun shooting motion [with her hand] toward [the defendant]” during
the course of the investigation; (3) refused to consider witnesses and information favorable to the
plaintiff’s position during the record-access investigation, despite the fact that hospital policy
required a full and fair consideration of the plaintiff’s position; and (3) refused to consider or impose
any progressive discipline, as was required by the hospital’s employee handbook. The plaintiff
contends that, by fabricating the record-access charges and recommending the plaintiff’s termination
without allowing her any opportunity to mount a substantive defense to the charges against her, the
defendant tortiously interfered with the plaintiff’s contractual relationship with the hospital, causing
the hospital to breach that agreement by terminating her without good cause. All of the factual
premises of those claims were explored fully in, and central to the resolution of, the plaintiff’s
wrongful termination claim in the state court lawsuit.
In count III of her complaint, the plaintiff alleges that the defendant violated her procedural
due process rights guaranteed by the Fourteenth Amendment and 42 U.S.C. § 1983 by (1)
suspending her pending termination after a single summary pre-termination meeting, during which
the plaintiff was not given any chance to mount a substantive defense to the charges of improper
record access; and (2) failing or refusing to allow the plaintiff any opportunity for a thorough posttermination review of the decision to fire her. Those factual premises likewise were at the heart of
the plaintiff’s state court lawsuit and fully were explored in the prior action.
But for the legal theories on which the plaintiff’s present complaint is framed, the claims
raised in counts I, II, and III are substantively indistinguishable from those that the plaintiff raised
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— and on which she prevailed in part — in her state court wrongful termination case. See Heike v.
Cent. Michigan Univ. Bd. of Trustees, 573 F. App’x 476, 483 (6th Cir. 2014) (“Causes of action
share an identity where the facts and events creating the right of action and the evidence necessary
to sustain each claim are the same.”). The plaintiff previously raised, fully litigated, and recovered
an award of damages on her claims that the hospital wrongfully terminated her contract of
employment based on Powerski’s false and improper termination recommendation. She now seeks
to recover separately against Powerski individually for the same underlying wrongful conduct and
the same ensuing harm, merely by fashioning her claims under different legal theories. Under the
doctrine of claim preclusion as it has been applied by Michigan courts, such a “second bite at the
apple” is precluded, because the present claims are ones “‘arising from the same transaction that the
parties, exercising reasonable diligence, could have raised but did not’” in the previous lawsuit.
Young, 471 F.3d at 682 (quoting Adair, 470 Mich. at 121, 680 N.W.2d at 396).
In support of her argument that res judicata does not apply, the plaintiff relies principally
on Bennett v. Mackinac Bridge Auth., 289 Mich. App. 616, 630, 808 N.W.2d 471, 480 (2010), East
Muskegon Roofing & Sheet Metal Co. v. Holwerda, No. 256591, 2006 WL 355208 (Mich. Ct. App.
Feb. 16, 2006), and Hoogland v. Kubatzke, No. 307459, 2013 WL 331580 (Mich. Ct. App. Jan. 29,
2013). The plaintiff reasons that these cases tie the doctrine of claim preclusion to the concept of
compulsory joinder; and since the Michigan court rules would not compel the plaintiff to join all her
claims against Powerski in her prior lawsuit, claim preclusion cannot bar those claims here. That
reasoning is unsound. Although the rules of claim preclusion and compulsory joinder are perhaps
related and serve similar interests, they remain distinct and free-standing concepts. Compulsory
joinder addresses those claims and parties that a plaintiff must join in a single action going forward.
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Claim preclusion deals with the effect of a judgment in a concluded action on those parties and
claims that the plaintiff could have brought or joined, but chose not to do so. See Federated Dep’t
Stores, Inc., v. Moitie, 452 U.S. 394, 398 (1981). Neither rule preempts the other, and the cases
cited by the plaintiff do not suggest otherwise.
Moreover, Bennett and Holwerda are distinguishable because they involved the application
of res judicata to claims brought under specific statutory language that allowed the plaintiffs to
pursue separate actions against various parties. In Bennett, the court concluded that the Workers’
Disability Compensation Act expressly permitted the plaintiff to proceed against either his direct
or statutory employer, or both, and the Act did not require joinder of parties in a single proceeding.
In Holwerda, the court concluded that the gravamen of the claims was not the same, because the
liability of the individual corporate officer defendants under the Michigan Builders’ Trust Fund Act
was never at issue in the prior breach of contract lawsuit against the contracting company that those
defendants had controlled.
The statutes controlling those two cases do not map onto the
circumstances present in this case.
Hoogland contains language that might be read to support the plaintiff’s argument, see
Hoogland, 2013 WL 331580 at *4 (citing Bennett and stating, “As res judicata should not be used
to punish a party from suing various defendants in different proceedings, plaintiff’s claim should not
be barred by res judicata.”). But the case is distinguishable because Hoogland’s earlier lawsuit was
dismissed solely on the basis of a shortened statute of limitations that contractually applied to the
employer, but did not benefit the individual administrator defendants in the second lawsuit. And
its rationale depends mainly on the panel’s reading of Bennett, which, as noted above, is premised
on a specific statutory authorization of multiple lawsuits against different parties. No such statute
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applied in Hoogland, which can best be read as promoting the idea that res judicata should not be
used as a device to expand contractually-created defenses to benefit those who are not parties to the
contract. A broader reading would render the case an outlier, to be disregarded as an unpublished
and non-controlling decision, which is contrary to the Sixth Circuit’s decision in McCoy, the weight
of authority generally on point noted above, and the Sixth Circuit’s published and controlling
decision applying Michigan’s principles of res judicata in Young v. Township of Green Oak, 471
F.3d 674, 682 (6th Cir. 2006) (“All of Young’s employment discrimination and retaliation claims
arise from the Township’s refusal to return him to work. We thus conclude that the district court
properly found that res judicata barred the relitigation of these claims.”).
2.
The plaintiff’s First Amendment retaliation claim stands on different footings, however.
Unlike her other claims, the plaintiff’s First Amendment retaliatory harassment claim is not barred
by the res judicata effect of her state court wrongful termination lawsuit, because the substance of
the harassment claim concerns a series of allegedly harassing actions that commenced as early as
May 2012, almost all of which are distinguishable from and unrelated to the August 2012 recordaccess investigation and the ensuing decision to terminate the plaintiff that was made in September
2012. The plaintiff’s claims of retaliatory harassment were not necessarily resolved by the state
court judgment on her wrongful termination claim, nor could they have been, because the plaintiff
there pursued and recovered damages solely for Powerski’s and the hospital’s conduct in terminating
her, not for the months of alleged harassment by Powerski that preceded the termination.
The plaintiff’s claim in the state court lawsuit against the hospital was for wrongful
termination of her employment contract without good cause, and, in the context of the wrongful
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termination lawsuit, the plaintiff could not have recovered against the hospital itself on any legal
theory for Powerski’s individual harassing conduct that had no temporal or transactional relationship
to the termination itself.
Moreover, the substance of the plaintiff’s retaliatory harassment allegations present entirely
free-standing claims for relief that would be actionable against Powerski individually even if the
hospital never had acted on Powerski’s termination recommendation. See McCoy, 369 F. App’x at
651 (“[A]lthough the state-court litigation and the instant case both involve claims of discrimination
and retaliation, they neither resulted from nor are they tied to the same MDOC actions. The
gravamen of McCoy’s federal complaint is that his 2004 termination and the activities and
complaints surrounding that termination, which took place from June 2004 onward, are, despite
everything that may have occurred previously, themselves actionable. In essence, the origin of the
two claims is simply not the same.”).
B.
The defendant also attacks the plaintiff’s First Amendment retaliation claim on the merits,
arguing that the plaintiff cannot establish that she was engaged in any protected activity when she
made her discrimination complaints, because when she voiced those complaints she was speaking
solely as an employee and “pursuant to her official duties,” citing Garcetti v. Ceballos, 547 U.S.
410, 421 (2006). The defendant also maintains that none of the allegedly “harassing” conduct
resulted in any consequences to the plaintiff’s employment situation, and she therefore has failed
to show that anything the defendant did amounted to an adverse action or caused her termination,
which was based solely on the results of the record access violation, not the earlier allegedly
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unjustified negative performance reviews and counseling memos entered into the plaintiff’s
personnel file.
The plaintiff styled count IV of her complaint as one for “First Amendment harassment,”
which is a particularized form of First Amendment retaliation. The plaintiff alleges that the
defendant retaliated by “harassing” her via an unrelenting campaign of unfair and unfounded
scrutiny, including by repeatedly placing gratuitous negative memos in her employment file, after
the plaintiff exercised her rights under the First Amendment by complaining about racial harassment
and discrimination that she said she suffered at the defendant’s hands.
“To succeed on a First Amendment retaliation claim, the following elements must be proven:
‘(1) the plaintiff engaged in constitutionally protected conduct; (2) an adverse action was taken
against the plaintiff that would deter a person of ordinary firmness from continuing to engage in that
conduct; and (3) the adverse action was motivated at least in part by the plaintiff’s protected
conduct.’” Paterek v. Vill. of Armada, Mich., 801 F.3d 630, 645 (6th Cir. 2015) (quoting Fritz v.
Charter Twp. of Comstock, 592 F.3d 718, 723 (6th Cir. 2010)). “It is well established that a
government employer cannot ‘condition public employment on a basis that infringes the employee’s
constitutionally protected interest in freedom of expression.’” Perry v. McGinnis, 209 F.3d 597, 604
(6th Cir. 2000) (quoting Connick v. Myers, 461 U.S. 138, 142 (1983)). “As a logical consequence,
retaliation by a government employer against an individual who exercises his First Amendment
rights constitutes a First Amendment violation.” Ibid. (citing Zilich v. Longo, 34 F.3d 359, 365 (6th
Cir. 1994)). “This is the case even if the employee could have been terminated for any reason.”
Ibid. (citing Rankin v. McPherson, 483 U.S. 378, 383 (1987)).
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Protected conduct — the first element of the claim — is in turn determined by another threeelement test. “Under the test, commonly called the Pickering test, the plaintiff must [establish that]:
(1) the speech involved a matter of public concern, (2) the interest of the employee ‘as a citizen, in
commenting upon matters of public concern,’ outweighs the employer’s interest ‘in promoting the
efficiency of the public services it performs through its employees,’ and (3) the speech was a
substantial or motivating factor in the denial of the benefit that was sought.” Perry, 209 F.3d at 604
(quoting Pickering v. Board of Education, 391 U.S. 563, 568 (1968)).
Complaints about racial discrimination plainly fall within the ambit of speech about matters
of public concern. “In [Connick v. Myers, 461 U.S. 138 (1983)], the Supreme Court clearly
established that racial discrimination is inherently a matter of public concern.” Perry, 209 F.3d at
608 (citing Connick, 461 U.S. at 148 n.8). “Furthermore, in Givhan v. Western Line Consolidated
School District, 439 U.S. 410 (1979), the Supreme Court established that an employee’s choice to
communicate privately with an employer [regarding a charge of racial discrimination] does not strip
the concern of its public nature.” Ibid. That is true regardless of whether the plaintiff made the
complaints publicly, or privately to authorities within the workplace. Ibid.
The defendant contends that the plaintiff was not engaged in First Amendment protected
activity because, when she made her discrimination complaints, the plaintiff was speaking solely
as an employee and “pursuant to her official duties.” Garcetti, 547 U.S. at 421 (“[W]hen 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.”). But that argument ignores the Supreme Court’s subsequent narrowing
of the holding in Garcetti, refocusing the question on “whether the speech at issue is itself ordinarily
-22-
within the scope of an employee’s duties, not whether it merely concerns those duties.” Lane v.
Franks, --- U.S. ---, ---, 134 S. Ct. 2369, 2379 (2014). The Court explained that “the mere fact that
a citizen’s speech concerns information acquired by virtue of his public employment does not
transform that speech into employee — rather than citizen — speech.” Ibid. It would be unusual
(and contrary to the very core of the First Amendment) to conclude, as the defendant urges, that a
public employee surrenders her First Amendment protections any time she complains of unlawful
activity, no matter how invidious, merely because an employer has a workplace policy that
encourages or requires employees to report such conduct.
Termination of a plaintiff’s employment undeniably constitutes an adverse action. Bryson
v. Regis Corp., 498 F.3d 561, 571 (6th Cir. 2007) (“Bryson suffered an adverse action because she
was terminated at the conclusion of her leave period.”). However, in this case the plaintiff does not
premise her “harassment” claim on the termination, but instead on the defendant’s allegedly
retaliatory campaign of relentless scrutiny following the plaintiff’s complaints of racial
discrimination. “In order to determine whether actions of lesser severity merit being deemed
‘adverse’ for purposes of a retaliation claim, [the Sixth Circuit has adopted] the standard suggested
by Judge Posner in Bart v. Telford, 677 F.2d 622, 625 (7th Cir. 1982), that an adverse action is one
that would ‘deter a person of ordinary firmness’ from the exercise of the right at stake.” Thaddeus-X
v. Blatter, 175 F.3d 378, 396 (6th Cir. 1999). “‘[S]ince there is no justification for harassing people
for exercising their constitutional rights, [the effect on freedom of speech] need not be great in order
to be actionable.’” Id. at 397 (quoting Bart, 677 F.2d at 625).
The complained of actions here were sufficient to discourage a person of ordinary firmness
from exercising her rights under the First Amendment, regardless of whether they resulted in
-23-
tangible consequences to the plaintiff’s employment situation, and notwithstanding the fact that the
negative memos ultimately were removed from the plaintiff’s file. Moreover, the recommendation
for termination in itself is sufficient to qualify as an adverse action in a First Amendment retaliatory
harassment claim, even if the defendant was not the ultimate decision maker in the termination. Haji
v. Columbus City Schools, No. 12-3520, 2015 WL 4385280, at *4 (6th Cir. July 16, 2015) (“[E]ven
if we accept the Defendants’ contention that Haji was not terminated until August, the June 5
recommendation to terminate was still an adverse employment action.”).
That leaves the question of causation. The court of appeals explained recently that
“[c]ausation is best addressed as a two part inquiry. First, we determine whether ‘the adverse action
was proximately caused by an individual defendant’s acts,’ and second, we consider whether ‘the
individual taking those acts was motivated . . . by a desire to punish [the plaintiff] for the exercise
of a constitutional right.’” Paterek, 801 F.3d at 646 (quoting King v. Zamiara, 680 F.3d 686, 695
(6th Cir. 2012)). “The true object of this inquiry is to determine whether the plaintiff has been
retaliated against as a direct result of his or her protected speech.” Ibid.
“[P]roximity in time between the protected activity and the adverse . . . action may constitute
evidence of a causal connection,” Bryson, 498 F.3d at 571. The Sixth Circuit has found that
temporal proximity may give rise to an inference of causation with a lapse of as long as three months
between the protected activity and termination. Ibid.; Singfield v. Akron Metro. Hous. Auth., 389
F.3d 555, 563 (6th Cir. 2004) (“[T]he temporal proximity of these events is significant enough to
constitute sufficient evidence of a causal connection for the purpose of satisfying Singfield’s burden
of demonstrating a prima facie case.”).
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The temporal proximity of the protected activity and the alleged harassing conduct is
sufficient in this case to give rise to an inference of causation that defeats summary judgment on this
claim, because the plaintiff contends that the defendant’s unfounded increased scrutiny of her and
the repeated placement of counseling memos in her employment file began almost immediately
following her complaints of racial discrimination in late May 2012 and continued through the
following three months until the defendant finally recommended the plaintiff’s termination in
August 2012. That falls within the three-month window the Sixth Circuit has found sufficient on
other occasions. Bryson, 498 F.3d at 571; Singfield, 389 F.3d at 563. The defendant has produced
some evidence that the allegedly excessive and retaliatory scrutiny of the plaintiff was warranted.
However, Powerski admitted that the counseling memos later were removed from the plaintiff’s file
after a meeting between Powerski, Larry, and the then head of the patient representative department,
Michael Burnett. In light of that testimony and the state court jury’s determination that there was
no good cause basis for the eventual termination, the defendant’s evidence certainly is not so
overwhelming as to compel the conclusion that, when viewing the record “‘in the light most
favorable to the plaintiff, no reasonable juror could fail to return a verdict for defendant.’” Paterek,
801 F.3d at 646 (quoting Dye v. Office of the Racing Comm’n, 702 F.3d 286, 294-95 (6th Cir.
2012)).
The plaintiff has submitted enough evidence on all the elements of her First Amendment
retaliation claim to defeat summary judgment.
C.
The defendant pleaded as an affirmative defense that she “has qualified immunity from the
claims asserted by the Plaintiffs [sic].” However, she did not argue — or even mention — the
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question of qualified immunity in her own motion for summary judgment, or in her reply brief in
support of that motion. Instead, she developed the qualified immunity defense only in her response
to the plaintiff’s motion for partial summary judgment, which solely addressed the plaintiff’s
procedural due process claim raised in count III of the complaint. It does not appear that the
defendant intends to assert a qualified immunity defense to the First Amendment retaliation claim,
or if she ever did so, that defense is considered abandoned. See McPherson v. Kelsey, 125 F.3d 989,
995-96 (6th Cir.1997) (observing that “[i]ssues adverted to in a perfunctory manner, unaccompanied
by some effort at developed argumentation, are deemed waived,” and reiterating that “[i]t is not
sufficient for a party to mention a possible argument in the most skeletal way, leaving the court to
put flesh on its bones”) (quotations and alterations omitted).
III.
The plaintiff’s claims based on tortious interference with contractual relations, injurious
falsehood, and denial of procedural due process can proceed no further, because they are barred by
the doctrine of claim preclusion, or res judicata.
However, the plaintiff’s claim for First
Amendment retaliation is not so barred, and the plaintiff has brought forth sufficient facts to require
a trial. The case management order, as amended, scheduled a final pretrial conference for December
16, 2015, which would require the parties to submit a proposed joint final pretrial order to chambers
by December 9, 2015. Because this motion was decided within a week of the due date of the
proposed final pretrial order, the Court will extend the time for its submission to December 14,
2015. See E.D. Mich. LR 16.1(f). The final pretrial conference and trial dates will remain the same.
Accordingly, it is ORDERED that the defendant’s motion for summary judgment [dkt. #20]
is GRANTED IN PART AND DENIED IN PART.
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It is further ORDERED that the plaintiff’s motion for partial summary judgment [dkt. #14]
is DENIED.
It is further ORDERED that counts I, II, and III of the complaint are DISMISSED WITH
PREJUDICE.
It is further ORDERED that the date for submission of the proposed joint final pretrial order
to chambers is EXTENDED to December 14, 2015. The final pretrial conference and trial dates
will remain unchanged.
s/David M. Lawson
DAVID M. LAWSON
United States District Judge
Dated: December 7, 2015
PROOF OF SERVICE
The undersigned certifies that a copy of the foregoing order was served
upon each attorney or party of record herein by electronic means or first
class U.S. mail on December 7, 2015.
s/Susan Pinkowski
SUSAN PINKOWSKI
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