Wilson v. State of Oregon et al

Filing 106

ORDER: Granting Defendant Harra's Motion for Summary Judgment 80 ; Granting in Part Denying in Part Motion to Strike and Motion to Dismiss 96 .Summary Judgment is granted in favor of defendant Harra on Plaintiff's Second Claim for Relief, and Plaintiff's fifth Claim for Relief against Local 503 is Dismissed without prejudice. Signed on 6/13/2012 by Chief Judge Ann L. Aiken. (lg)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON

SUSAN K. WILSON, an individual,
Plaintiff,

v.
STATE OF OREGON; THEODORE
KULONGOSKI, Governor of Oregon;
JOHN KROGER, Attorney General of
the State of Oregon; SCOTT HARRA,
Director, Oregon Department of
Administrative Services; CLAUDIA
BLACK, Health Policy Advisor to
the Governor; TONY GREEN,
Director of Communications and
Policy for Oregon Dept. of
Justice; DONNA SANDOVAL BENNETT,
Assistant At~orney General; and
SERVICE EMPLOYEES INTERNATIONAL
UNION, LOCAL 503; CHRISTINA
McCALLISTER; TIMOTHY MOLLOY;
CERYNTHIA MURPHY; SAMANTHA
PATNODE; LAWRENCE PECK; and
CALLIE ZINK, individuals,
Defendants.

1 - OPINION AND ORDER

No. 6:10-cv-6393-AA
OPINION AND ORDER

Roger Hennagin
Roger Hennagin, P.C.
S North State Street, Suite 300
Lake Oswego, OR 97034
Attorney for Plaintiff
Marc A. Stefan
Supervising Attorney
SEIU Local 503, OPEU
P.O. Box 12159
Salem, OR 97309
Attorney for Defendant Local 503
Marc Abrams
Senior Assistant Attorney General
Department of Justice
1515 SW Fifth Ave., Suite 410
Portland, OR 97201
Attorney for State defendants
AIKEN, Chief Judge:
Plaintiff Susan Wilson filed suit against the State of Oregon,
the former Governor and other state officials (State defendants),
the Service Employees International Union, Local 503 (Local 503),
an Oregon public employees union, and individual union members.
After dismissal and voluntary dismissal of several claims,

two

claims remain: a claim alleging a violation of plaintiff's due
process

rights against defendant Scott Harra and a claim for

intentional interference with plaintiff's employment against Local
503. See Stipulated Dismissal of Certain Claims (doc. 88) at 2.
Harra now moves for summary judgment and Local 503 again moves for
dismissal.
BACKGROUND
Plaintiff was employed with the Oregon Health Licensing Agency

2 - OPINION AND ORDER

(OHLA) from July 1, 1999 to March 5, 2009. Plaintiff was appointed
by

then-Governor

Department

Kitzhaber,

and

of Administrative

the

Director

Services

(DAS)

of

the

Oregon

later became

her

appointing authority. Scott Harra was the Director of DAS at the
time of plaintiff's discharge.
In February 2003, then-Governor Kulongoski instituted a new
directi ve requiring agencies to streamline their operations and
reduce impacts of governmental regulation on Oregon businesses. In
2005,

Gov.

directive,
directors
protections

Kulongoski issued a second regulatory streamlining
and
to

in

2007,

ensure

laws.

With

he

the
the

instructed

health-related

enforcement

of

assistance

of

Oregon's
her

agency
consumer

administrative

services director, Richard McNew, plaintiff initiated a planning
process

to

achieve

compliance

with

the

Governor's

regulatory

streamlining objectives. The plan involved reorganization of the
agency and reassignment of OHLA staff. McNew hired temporary staff,
including plaintiff's daughter, to assist with this process.
At some point, several staff members apparently complained to
Local 503 representatives that plaintiff and McNew engaged in
nepotism and misconduct. Plaintiff maintains that these complaints
were false and motivated by the staff members' displeasure about
the proposed reorganization of OHLA and potential reassignments.
Local 503 representatives relayed these complaints to the
Governor's office and the Attorney General's office. In doing so,

3 - OPINION AND ORDER

plaintiff maintains that Local 503 bypassed the grievance process
pursuant to the collective bargaining agreement between Local 503
and the State. Further, plaintiff alleges that State officials did
not notify plaintiff of the complaints lodged against her.
In late January 2009, Local 503 officials , representatives
from the Governor's office and DAS, and several OHLA employees met
to discuss the complaints against plaintiff and McNew. Plaintiff
alleges that she was not afforded the opportunity to address the
staff grievances.
On February 2, 2009, plaintiff was placed on administrative
leave pending an investigation into the complaints lodged against
plaintiff and other OHLA staff.

Tony Green,

spokesman for the

Attorney General's office, issued a statement that several OHLA
managers and employees had been placed on administrative leave
after concerns about OHLA were reported to the Governor. Abrams
Decl. Ex. G at 1 (newspaper report quoting Green as stating: "Early
last week, we received concerns about management at this agency ....
We began looking into it."). At that time, Green "would not reveal
the names of those put on leave or comment on the nature of the
allegations against them." Id.; see also id. Ex. G at 4 (nsewspaper
article stating that "Officials from DAS and the Oregon Department
of Justice declined Tuesday to reveal the nature of the allegations
that led to the investigation. H) .
On February 3, 2009, newspaper reports quoted a spokeswoman as

4 - OPINION AND ORDER

stating that the Governor's office "took these allegations very
seriously," and Green as stating, "We just don't know the full
scope of issues now." Id. Ex. G at 2.
By February 5, 2009, the Attorney General's office released
the names of plaintiff and others who were placed on administrative
leave. The Attorney General did not "releaser]

details of what

charges are under investigation." Abrams Decl.

Ex.

G at 6.

On March 5, 2009, plaintiff was permanently discharged. In
newspaper reports, no reason was given for plaintiff's termination.
Instead, Green was quoted as stating, "She serves at the pleasure
of DAS, and DAS made a decision to make a change[.] These are not
cases where there is any need for cause. She was told her services
were no longer required." Id. Ex. G at 20-21. Plaintiff was never
offered a name-clearing hearing.
DISCUSSION
A. Harra's Motion for Summary Judgment
As an initial matter, Harra argues that plaintiff must stand
by her claim that Harra conspired to violate her due ?rocess
rights, a claim that must be dismissed because plaintiff presents
no evidence that Harra participated in a conspiracy against her.
Harra argues that plaintiff should not be permitted, at this stage
of the proceedings,

to alter her claim and allege that Harra

directly violated her due process rights by denying her a nameclearing hearing.

5 - OPINION AND ORDER

As indicated in my previous Opinion and Order, plaintiff's
Amended Complaint can be construed to allege a direct violation of
her due process rights by Harra, particularly in light of the State
defendants' position that Harra was the person with authority to
grant plaintiff a name-clearing hearing. While plaintiff has not
sought

further

amendment

of

her

claim,

counsel

indicates

he

intended to do so in the Pretrial Order. I find that the State
defendants have been on notice of this claim, and Harra will suffer
no prejudice if it is considered. Therefore, I decline to grant
summary judgment on this ground.
Harra next argues that plaintiff's due process claim fails on
the merits because she did not request a name-clearing hearing and
she

had

no

protected

liberty

interest

when

no

stigmatizing

information was published by State employees.
I

reject

Harra's

contention

that

plaintiff's

failure

to

request a hearing bars her claim, as the Ninth Circuit has not
imposed this requirement. See Adcock v. City of Canby,

2011 WL

609799, at *8 (D. Or. Feb. 15, 2011); Tibbetts v. State Acc. Ins.
Fund Corp., 2008 WL 4144441, at *2 (D. Or. Sept. 4, 2008). That
said, I agree with Harra that plaintiff fails to show that State
officials published a stigmatizing charge against her in connection
with her termination so as to implicate her liberty interests.
It

is

Ivell-established that

a

terminated employee has

a

constitutionally-based liberty interest in clearing her name when

6 - OPINION AND ORDER

stigmatizing

information

is

published in

connection with

the

termination. Bd. of Regents v. Roth, 408 U.S. 564, 573 (1972). "If,
in the context of employment termination, the employer publicizes
a charge that 'impairs a reputation for honesty or morality,' then
a liberty interest is implicated and the employee must be allowed
to "refute the stigmatizing charge.'" Tibbetts v. Kulongoski, 567
F.3d 529, 536 (9th Cir. 2009) (quoting Mustafa v. Clark County Sch.
Dist., 157 F.3d 1169,1179 (9th Cir. 1998)

(per curiam)).

Plaintiff presents no evidence to support her claim that State
representatives published stigmatizing remarks suggesting that she
was terminated due to dishonesty or moral turpitude, as opposed to
incompetence or lack of management skills. See Fed. Deposit Ins.
Corp. (FDIC) v. Henderson, 940 F.2d 465, 477 (9th Cir. 1991) ("Only
the stigma of dishonesty or moral turpitude gives rise to a liberty
interest; charges of incompetence do not."); Tibbetts, 567 F.3d at
537 (accord). According to the unrebutted evidence submitted by the
State defendants, State officials repeatedly declined to describe
the nature of the OHLA investigation and did not assert or suggest
that plaintiff was terminated for wrongdoing. Instead, Green stated
that

the

State

"received

word

of

concerns

about

[OHLA]'s

management" and that "DAS made a decision to make a change" and "no
longer required" plaintiff's services. Abrams Decl. Ex. Gat 5, 2021; see Bollow v. Fed. Reserve Bank of San Francisco, 650 F. 2d
1093, 1101 (9th Cir. 1981) ("When reasons are not given, inferences

7 - OPINION AND ORDER

drawn from dismissal alone are simply insufficient to implicate
liberty interests.").
Granted, several newspapers reported that the investigation of
OHLA managers involved complaints of "wrongdoing," "nepotism," and
"hostility" toward OHLAemployees. However, this information was
not attributed to a State official or representative.

Rather,

unnamed "sources" and a Local 503 representative provided the
information published in the newspaper reports. See Abrams Decl.
Ex. G. Plaintiff presents no evidence that the "sources" or union
representative provided such information at the State's request.
Even if the statements by State officials could be construed
as stigmatizing in the context of the newspaper reports, I find
that Harra is entitled to qualified immunity. Given the neutrality
of the statements, Harra's conduct did not violate plaintiff's
clearly established due process rights of which a reasonable State
official would have known, Pearson v, Callahan, 555 U,S. 223, 231
(2009); Tibbetts, 567 F.3d at 539; FDIC v, Henderson, 940 F,2d at
477 478. Therefore, summary judgment is granted on this claim.
B. Local 503's Second Motion to Dismiss
In her Fifth Claim for Relief, plaintiff alleges that Local
503

intentionally

interfered

with

her

employment

w~en

union

representatives met with State officials in a "clandestine" manner
and made false accusations against her, for the purpose of causing
her termination or otherwise interfering with her employment, Am.

8 - OPINION AND ORDER

Compl,

~~

79-82, The court previously denied a motion to dismiss

brought by Local 503, finding that plaintiff sufficiently alleged
intentional interference with her economic relations.
In its renewed motion, Local 503 does not set forth facts or
evidence to support dismissal, Rather, it relies on plaintiff's
voluntary dismissal of other claims and argues that allegations
relating to the dismissed claims must be stricken, and - absent
such allegations - plaintiff's Amended Complaint fails to allege
facts to support her intentional interference claim.
I disagree.

Simply because plaintiff voluntarily dismissed

several of her claims does not necessarily require the court to
strike

all

factual

allegations

pertaining

to

those

claims,

particularly when plaintiff's Amended Complaint "realleges" those
facts against Local 503 in her Fifth Claim for Relief. See Am.
Compl.

~

78. Moreover, I have already found plaintiff's allegations

sufficient, and this case has long passed the pleading stage. Local
503 must therefore present facts to support the deficiency of
plaintiff's claims,
Local 503 also urges the court to exercise its discretion and
decline supplemental jurisdiction over this claim.

I find such

request appropriate now that plaintiff's federal claims have been
dismissed, A district court may decline to exercise supplemental
jurisdiction over state law claims if the court dismisses all
federal claims giving rise to original jurisdiction, 28 U,S,C,

9 - OPINION AND ORDER

§

1367 (c) (3). In such cases, the Ninth Circuit encourages district
courts to

~decline

jurisdiction over the state claims and dismiss

them without prejudice." Les Shockley Racing Inc. v. Nat'l Hot Rod
Ass'n, 884 F.2d 504, 509 (9th Cir. 1989). Accordingly, this claim
will be dismissed without prejudice.
CONCLUSION
Harra's Motion for Summary Judgment (doc. 80) is GRANTED, and
Local 503's Motion to Strike and to Dismiss (doc. 96) is GRANTED in
part. Summary judgment is GRANTED in favor of defendant Harra on
plaintiff's Second Claim for Relief, and plaintiff's Fifth Claim
for Relief against Local 503 is DISMISSED WITHOUT PREJUDICE. The
Clerk is directed to issue Judgment accordingly.
IT IS SO ORDERED.
Dated this

/~y

of June, 2012.

Ann Aiken
United States District Judge

10- OPINION AND ORDER