Towle v. Board of Education School District of Brown Deer et al

Filing 92

ORDER signed by Judge J P Stadtmueller on 9/29/16: granting in part 60 Defendants' MOTION for Summary Judgment; the Court declines to exercise supplemental jurisdiction of Plaintiff's state law claims; denying 88 Plaintiff's MO TION to Clarify Scope or, Alternatively, to Amend the Second Amended Complaint; and, REMANDING the remaining state law claims in this action to the Milwaukee County Circuit Court. The Clerk of Court is directed to take all appropriate action to effectuate the remand. See Order. (cc: all counsel)(nm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
EDWARD TOWLE,
Plaintiff,
v.

Case No. 11-CV-542-JPS

BOARD OF EDUCATION SCHOOL
DISTRICT OF BROWN DEER,
DEBORAH KERR, and
SCHOOL DISTRICT OF BROWN DEER,

ORDER
Defendants.
In this civil suit, Plaintiff Edward Towle (“Mr. Towle”) alleges
numerous claims against Defendants Board of Education School District of
Brown Deer, Dr. Deborah Kerr, and School District of Brown Deer
(collectively “the District”) in relation to his placement on paid administrative
leave. (Second Amended Complaint (“SAC”), Docket #1-1). Mr. Towle
initially filed this action in Milwaukee County Circuit Court and, on June 6,
2011, the District removed the case to federal court. (Docket #1). This case has
languished for the last five years due to the parties’ numerous requests for
mediation.
This matter comes before the Court on the District’s motion for
summary judgment, filed on May 18, 2016. (Docket #17). On July 12, 2016, Mr.
Towle filed his opposition (Docket #69) and, on August 12, 2016, the District
filed its reply (Docket #83). As such, the motion for summary judgment is
fully briefed and ready for disposition.1

1

The Honorable Judge Rudolph T. Randa presided over the vast majority of
this case. However, due to the unavailability of Judge Randa, this action was
recently reassigned to this branch of the Court on August 2, 2016.

To begin, however, the Court finds it necessary to briefly discuss the
claims presented in the SAC, the operative complaint in this matter, because
the parties do not agree on this issue. The SAC lists eight claims: (1) Breach of
Contract; (2) Defamation; (3) Tortious Interference with Contracts and
Potential Contracts; (4) Violation of Due Process Under Wisconsin
Constitution; (5) Violation of Due Process Under United States Constitution;
(6) Breach of Contract: Memorandum of Understanding; (7) Breach of
Covenant of Good Faith and Fair Dealing in Employment Contract; and (8)
Breach of Covenant of Good Faith and Fair Dealing in Memorandum of
Understanding. (SAC, Docket #1-1). On May 18 2016, Judge Randa granted
the parties’ joint motion to dismiss the Sixth and Eighth Claims. (Docket #65).
Throughout the course of summary judgment briefing, it became
apparent that the parties disagreed over the fifth claim involving a due
process violation under the United States Constitution. As the only federal
claim alleged, and as discussed more in detail below, the nature of this claim
becomes significant when determining the Court’s jurisdiction over this case.
The District interprets the SAC to bring a property interest claim only
under the Wisconsin Constitution, whereas Mr. Towle argues he was
deprived of a property interest without due process of the law in violation of
the Wisconsin Constitution and the United States Constitution. (Compare Def’s
Opening Br. at 11 with Pl’s Opp. at 78). On August 30, 2016, Mr. Towle
elaborated this point when he filed a motion to clarify the scope of the fifth
claim, among other things. (Docket #88).2

2

This motion has not finished briefing, however, the Court finds it necessary
to address the issue prior to deciding the pending motion for summary judgment.

Page 2 of 23

The fourth claim in the SAC clearly alleges both a liberty and property
interest protected by the Wisconsin Constitution. (SAC ¶ 40) (“Mr. Towle has
a liberty and property interest….”). The fifth claim, under the United States
Constitution, however, makes no mention of a property interest, and instead
states, “Defendants’ conduct deprived him a liberty interest without due
process of the law,” and that he suffered a loss of economic opportunity due
to the District’s stigmatizing conduct. (SAC ¶¶ 45-46).
Mr. Towle urges the Court to find that his fifth claim—Violation of Due
Process Under the United States Constitution—is sufficient to state a claim
that the District deprived him of property interests as well as liberty interests
in violation of the due process clause of the United States Constitution.
(Docket #89 at 6). The Court construes all pleadings liberally, however, it will
not read into complaints claims that are explicitly not present. Indeed, the
distinction between the fourth and fifth claims is telling—the fourth claim
explicitly alleges both liberty and property interest claims whereas the fifth
claim only alleges a liberty interest. The District has filed a summary
judgment motion on the presumption that the only federal claim in this action
alleges a deprivation of a liberty interest without due process. (See Defs’
Opening Br. at 4, 11). As such, the District would be significantly prejudiced
if the Court were to read into the SAC a claim that is clearly not there. The
SAC was filed over five years ago, and now is not the time to clarify the claims
at issue in this case.
Accordingly, the Court will address the motion for summary judgment
with the clear understanding that the federal claim in this case—the fifth
claim—involves only a liberty interest. The Court will address Mr. Towle’s

Page 3 of 23

alternative request to amend the SAC following the determination of the
issues presented on summary judgment.
1.

FACTUAL BACKGROUND
This case involves Mr. Towle’s employment as the Business Manager

with the District and his placement on administrative leave in 2009. Before
delving into the specifics, however, the Court finds it necessary to briefly
discuss the parties’ factual submissions. Along with their motion for summary
judgment, the District submitted proposed findings of fact (“DPFF”) (Docket
#62) in accordance with Civil Local Rule 56(b)(1)(B). Mr. Towle submitted a
response to those proposed findings (Docket #75) along with his own
additional proposed findings of fact (Docket #76). The District then submitted
a reply to its own proposed findings (Docket #85) along with a response to
Mr. Towle’s additional proposed findings of fact (Docket #84).
The Seventh Circuit has emphasized the importance of local rules in
regards to findings of fact because they “assist the court by organizing the
evidence, identifying undisputed facts, and demonstrating precisely how each
side proposed to prove a disputed fact with admissible evidence.” Bordello v.
Chicago Sch. Reform Bd. of Trs., 233 F.3d 524, 527 (7th Cir. 2000) (quoting
Markham v. White, 172 F.3d 486, 490 (7th Cir.1999). Mr. Towle’s responses to
the District’s facts, however, are larded with obfuscation, argument, improper
denials, and evasion. To give but one example, the District’s proposed finding
of fact No. 18 states: “Dr. Kerr was shocked as Mr. Towle had never told her
about the District’s checking accounts being overdrawn and had never come
to her to describe any concerns about cash flow issues.” In response, Towle
states:

Page 4 of 23

Disputed. Mr. Towle had informed Dr. Kerr on several
occasions that the District’s bookkeeper (Sharon Batterman) was
having difficulty timely reconciling the monthly statements
received from the bank which related to cash management and
that he had talked with the bookkeeper about this several times.
Towle Dec. ¶¶ 48-49. Moreover, insufficient funds in the
checking account was not a “cash flow” issue; it was a “cash
management” issue. Towle Dec. ¶ 54. The purpose of taking
draws on the District’s short term line of credit only when funds
were needed was to save interest costs and the purpose of
having funds in a money market account and transferring funds
to the District’s checking account only when needed was to
maximize the amount of interest earned by the District. Id.
Although interest rates were higher during most of the
2007-2008 fiscal year than they were in 2008-2009, in 2007-2008,
the District earned $290,728 of interest income, an amount
sufficient to fund several teaching positions. Id. The 2008-2009
fiscal year was different because, in prior years, the District had
borrowed money in the fall and then placed the full amount
borrowed in investments that would earn more interest than the
interest rate on the loan. Id. But, in 2008-2009, because of the
economy, there were no suitable investments available for the
District to earn interest a rate higher than the loan rate. Id.
Therefore, the District’s cash management strategy was to take
draws on the line of credit and to make transfers as late as
possible when funds were needed for the checking account. Id.
(Pl’s Response to DPFF ¶ 18). Despite this lengthy response, it is still not even
clear if Mr. Towle disputes whether he told Dr. Kerr about checking accounts
being overdrawn. As a result of this type of response and many similar
examples in Mr. Towle’s submissions, the Court comes close to striking Mr.
Towle’s response to the proposed findings of fact in its entirety. See Bordelon
v. Chicago Sch. Reform Bd. of Trs., 233 F.3d 524, 528 (7th Cir. 2000) (upholding
District Court’s striking entire response to statements of facts for being “so full
of argument, evasion, and improper denials that it defeat[ed] the whole point
of [the] Local Rule[s].” Findings of fact are not the place for legal argument.
Page 5 of 23

The Court has limited time and resources, and submissions such as these do
little to nothing to aid the Court in determining the undisputed facts for the
purposes of summary judgment.
The Court will not, however, strike Mr. Towle’s responses in this
instance. As discussed more thoroughly below, the Court finds that even
when taking all facts in the light most favorable to Mr. Towle, his federal
claim fails as a matter of law. As such, the Court finds it wiser to allow Mr.
Towle’s responses to the proposed findings of fact, giving him every benefit
of the doubt where disputes arise, and will address the claims on the merits
instead. In the future, however, the Court strongly urges all parties before it
to comply with the local rules when addressing proposed findings of fact.
The Court now turns to discuss the factual background of the case and
the parties involved. Because the parties dispute so many of the proposed
findings of fact, the Court will focus its discussion on the facts pertaining to
the liberty claims discussed below.
1.1

The District Hires Towle

During the relevant time period, the District employed Mr. Towle as
its Business Manager. Prior to this time, Mr. Towle was employed as the
Director of Business and Financial Services of the School District of Marinette
for ten years, from 1993 to 2003, and as the Director of Business and Financial
Services of the School District of Westfield from 2003 until February 2007,
when he resigned to accept a position as Business Manager of the School
District of Brown Deer. (PPFF ¶ 3). Mr. Towle was interested in the Brown
Deer Business Manager position because Brown Deer was a larger school
district than Westfield, and the position would give him more responsibility,
more experience with a wider variety of more complex issues, more

Page 6 of 23

opportunities for professional growth including the acquisition of more
knowledge and the development of new skills, and the opportunity to work
in an urban area with a diverse student and community population. (PPFF
¶ 4).
The Brown Deer School District is comprised of approximately 1,600
students in grades K4-12th grade on a 63 acre campus located on 60th Street
and Dean Road in Brown Deer, Wisconsin. The current operational budget is
approximately $19 million dollars. (DPFF ¶ 1). The District office staff is
comprised of the Superintendent, Administrative Assistant to Superintendent,
Business Manager, Administrative Assistant, Payroll Specialist, Bookkeeper,
Director of Pupil Services & Administrative Assistant, Director of Curriculum
& Instruction & Administrative Assistant, and Director of Facilities and
Administrative Assistant. Dr. Kerr is the District Administrator for the
District. (SAC ¶ 2). Dr. Kerr began employment with the District as the
District Administrator in July 2007. (DPFF ¶ 4).
Mr. Towle was hired by Dr. Kerr’s predecessor in January 2007 and his
initial employment contract ran from February 2007 to June 30, 2008. (SAC
¶ 5). Mr. Towle’s contract was renewed in May 2008 to last from July 1, 2008,
through June 30, 2010 (“the 2006-2008 Contract”). (DPFF ¶ 6).3 The District
drafted the contract and Mr. Towle asserts that he would not have entered
into the contract if the Board had not agreed to employ him in the position of
Business Manager or had suggested to him that he would not actually be
allowed to perform any duties or come to work during the term of the

3

Mr. Towle disputes this finding of fact and asserts that this contract
contained terms materially different than the previous contract. The District,
however, never claimed that the contracts were exactly the same. (See Pl’s Response
DPFF ¶ 6).

Page 7 of 23

contract. (PPFF ¶ 6). The Administrator’s Employment Agreement included
the following provision that was not contained in the 2006-2008 Contract:
The Board may terminate this contract and discharge the
Administrator from employment for just cause provided that
the Administrator has received notice in writing from the Board
of its intent and the alleged reason or reasons for such
discharge. Upon written request, a hearing shall be conducted
with full regard for due process.
(PPFF ¶ 16). The Administrator’s Employment Agreement also provided that
“Renewal and non-renewal of this contract shall be governed by sec. 118.24,
Wis. Stats.,” and, although there are certain statutory procedures (including
a hearing if requested) that have to be followed, “just cause” is not required
for non-renewal of an administrator’s contract. (PPFF ¶ 17).
1.2

The District Places Mr. Towle on Administrative Leave

On Thursday, February 5, 2009, Barb Cybele, Administrative Assistant
for the Business Manager, came to Dr. Kerr with concerns about the bank wire
transfer that had been done to meet the District’s February 5th payroll.(DPFF
¶ 7). Ms. Cybele told her that Mr. Towle, who was out sick, had contacted
payroll specialist, Sue Run, to initiate the wire transfer of $289,913.07. (DPFF
¶ 8). The parties dispute the majority of the facts surrounding this incident;
in short, Mr. Towle maintains that his actions related to the wire transfer were
proper, whereas the District maintains they were not. (Compare DPFF ¶¶ 9-14
with Pl’s Responses).
On Friday, February 6, 2009, Mr. Towle returned to work after being
absent for three days due to illness. Sue Run and Sharon Batter man (the
District’s bookkeeper) were not in the office that day for Dr. Kerr to interview
in regard to the payroll situation. Mr. Towle did not communicate with Dr.
Kerr in regard to any issues with payroll. (DPFF ¶ 15). The same day, Dr.
Page 8 of 23

Kerr contacted Jean Pens, the district’s bank representative at M & I Bank
(now BMT Harris) to verify the payroll transfer and inquire about the district
bank accounts. (DPFF ¶ 16). Ms. Pens told Dr. Kerr that the district’s checking
accounts were overdrawn by approximately $500,000.00, resulting in
overdraft fees of approximately $1,500.00 to the district’s account.4 The parties
dispute the extent to which Mr. Towle had communicated previous financial
issues to Dr. Kerr in the past; these facts, however, are immaterial to the issues
presented at summary judgment. (See DPFF ¶ 18 and Pl’s Response).
On Saturday, February 7, 2009, Dr. Kerr, along with Kim Cazique,
spent numerous hours reviewing Mr. Towle’s emails and records from the
past six months to determine if there were other concerns or problems in the
operations of the business office. (DPFF ¶ 24). Dr. Kerr testified she
discovered that Mr. Towle was slow to respond to bank executives and the
district’s auditor, had submitted late reports to the Wisconsin Department of
Instruction, had failed to schedule the appraisals of school district property
in order for the auditors to complete their report before the December 15th
deadline to DPI, and had made significantly late payments to vendors; Mr.
Towle, however, disputes this assertion and maintains his actions were
proper. (See DPFF ¶ 25 and Pl’s Response). The parties also dispute the facts
surrounding Mr. Towle’s use of an outside paralegal to perform labor cost

4

Mr. Towle objects to this statement on the grounds of hearsay to the extent
it is offered for the truth of the matter asserted. (Pl’s Response to DPFF ¶ 17). In
response, the District maintains that the statement is not hearsay and admissible
because Dr. Kerr’s statement explains the information she had at the time she
placed Mr. Towle on leave. (Defs’ Reply to ¶ DPFF 17). The Court agrees with the
District that the statement is admissible because it is not offered for the truth of the
matter asserted.

Page 9 of 23

calculations; again, Dr. Kerr maintains Mr. Towle’s actions were improper
whereas Mr. Towle disagrees. (See DPFF ¶¶ 26-28 and Pl’s Responses).
Dr. Kerr had been an administrator in school districts for numerous
years at the time, and had never seen this type of conduct from a business
manager before, nor had Dr. Kerr ever heard of a district’s bank accounts
being overdrawn by $500,000. (DPFF ¶ 30). In light of this information, Dr.
Kerr decided to place Mr. Towle on administrative leave to determine the
scope and magnitude of these issues. (DPFF ¶ 29). On Monday, February 9,
2009, Dr. Kerr met with Mr. Towle to read and give him a hand-delivered
letter placing him on paid administrative leave pending an investigation into
these issues. James Hecht, the Director of Pupil Services for the District,
witnessed the meeting. (DPFF ¶ 39). The letter, in pertinent part, stated that
Mr. Towle was relieved of his duties as the District’s Business Manager, and
that he was not to enter or remain on district property unless specifically
requested. (PPFF ¶ 26).5
1.3

Statements About Mr. Towle’s Leave

On February 10, 2009, the day after Mr. Towle was placed on leave, Dr.
Kerr met with the Director of Technology, Brian Schiebach, and the Director
of Library Media Services, Kara Schuerman. (DPFF ¶ 41).6 Ms. Schuerman was
also the President of the Brown Deer Education Association (“BDEA”). That

5

Mr. Towle includes detailed facts about communications that occurred
between the District’s lawyer and Mr. Towle’s lawyer shortly after Mr. Towle’s
placement on administrative leave. (PPFF ¶¶ 28-31). The Court, however, does not
find any of these facts material to the issues presented on summary judgment.
6

The parties dispute Dr. Kerr’s true intention for holding this meeting. Dr.
Kerr maintains that she met with them to submit purchase orders and make
requests for funding; Mr. Towle asserts that the reason for the meeting was to tell
them about his placement on leave. (See DPFF ¶ 41 and Pl’s Response)

Page 10 of 23

same day, on February 9, 2010, Ms. Sherman sent an email to the eleven
members of the Executive Committee of the BDEA. The email stated the
following, in pertinent part:
I was asked to inform you, on behalf of Dr. Kerr, that our
business manager Edward Towle has been placed on
administrative leave for irregular accounting and business
practices.
Dr. Kerr is investigating details and working with the DPI to
perform necessary budget predictions (a budget will be
presented to the Finance Committee March 9th). She has some
ideas as to interim business manager possibilities but we are not
at that point yet.
Dr. Kerr felt it important that you are made aware of the issue
as you will certainly hear rumblings in your building and the
community. We have no more information other than the above
first statement.
(PPFF ¶ 32). On February 22, 2009, Mr. Towle received an email from Tim
Nelson, an English teacher at the High School and the Chief Negotiator for the
BDEA, which forwarded the email sent by Kara Schuerman. (PPFF ¶ 32). The
BDEA was a legal entity entirely separate and distinct from the District and
was the public employees union that represented teachers employed by the
District in collective bargaining and in connection with grievances teachers
might have, and which was an affiliate of the Wisconsin Education
Association Council (“WEAC”)—the state-wide teachers’ union—which
represented tens of thousands of teachers throughout Wisconsin, the National
Education Association (“NEA”), and a regional UniServ unit with which other
local teachers’ unions in southeastern Wisconsin were also affiliated. (PPFF ¶
33).

Page 11 of 23

During the course of Mr. Towle’s administrative leave, various news
sources published stories about the circumstances of his employment with the
District. (See PPFF ¶¶ 75-81) (including headlines such as, “District is paying
double for business management,” “Brown Deer school official, paid while on
leave gets job”). Specifically, on April 27, 2010, the Milwaukee Journal
Sentinel published an article with the headline “Brown Deer superintendent
responds to questions on absent business manager.” The article includes a
complete statement by Dr. Kerr including that “I placed Mr. Towle on paid
administrative leave pending an investigation into serious concerns about
operations in the business office.” (PPFF ¶ 79).
1.4

Mr. Towle Seeks New Employment

Immediately after being placed on administrative leave on February 9,
2009, Mr. Towle began to aggressively look for another position in school
administration, and also applied for positions with the Wisconsin Department
of Public Instruction, as well as positions in the private sector. (PPFF ¶ 89). On
November 3, 2009, Dr. Kerr provided a Preliminary Notice of Consideration
of Nonrenewal of Administrator’s Contract to Mr. Towle. (PPFF ¶ 52). From
February 9, 2009, through December 2013, Mr. Towle applied for at least 236
positions with school districts in Wisconsin, as well as in Illinois, Minnesota,
Michigan, Iowa, Virginia, and Pennsylvania; positions with the Wisconsin
Department of Public Instruction; and positions in the private sector. (PPFF
¶ 90). Mr. Towle has applied for positions in Beloit, Stevens Point,
Bloomington, Illinois, and approximately ten positions with the Department
of Public Instruction, but was never offered a position and was told the reason
he was not offered a position was because of the “administrative leave” in
Brown Deer. (PPFF ¶ 96).

Page 12 of 23

On April 7, 2010, Mr. Towle had entered into a contract with the Board
of Education of Community Consolidated School District 46 in Grayslake,
Illinois, for a period of one year beginning July 1, 2010. (PPFF ¶ 69). However,
when the Superintendent learned that Mr. Towle had been on administrative
leave from his Business Manager position in Brown Deer, the Board of
Education rescinded his contract. (PPFF ¶ 97). On April 13, 2010, Mr. Towle
sent a letter requesting the Board of Education accept his resignation as of
July 1, 2010, the day after the term of his Administrator’s Employment
Contract expired. (PPFF ¶ 68).
2.

LEGAL STANDARD
“The court shall grant summary judgment if the movant shows

that there is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); see also Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Celotex Corp. v. Catrett, 477 U.S.
317, 324 (1986); Ames v. Home Depot U.S.A., Inc., 629 F.3d 665, 668 (7th Cir.
2011). “Material facts” are those under the applicable substantive law that
“might affect the outcome of the suit.” See Anderson, 477 U.S. at 248. A dispute
over “material fact” is “genuine” if “the evidence is such that a reasonable
jury could return a verdict for the nonmoving party.” Id.
A party asserting that a fact cannot be or is genuinely disputed must
support the assertion by: “(A) citing to particular parts of materials in the
record, including depositions, documents, electronically stored information,
affidavits or declarations, stipulations (including those made for purposes of
the motion only), admissions, interrogatory answers, or other materials; or (B)
showing that the materials cited do not establish the absence or presence of
a genuine dispute, or that an adverse party cannot produce admissible

Page 13 of 23

evidence to support the fact.” Fed. R. Civ. P. 56(c)(1). “An affidavit or
declaration used to support or oppose a motion must be made on personal
knowledge, set out facts that would be admissible in evidence, and show that
the affiant or declarant is competent to testify on the matters stated.” Fed. R.
Civ. P. 56(c)(4).
3.

DISCUSSION
The District’s motion for summary judgment argues that they are

entitled to summary judgment on all claims. (Defs’ Opening Br., Docket #61).
Mr. Towle opposes the motion and further argues that the Court should stay
the federal claims and decline to exercise supplemental jurisdiction on the
state law claims.(Docket #78 at 4). As discussed below, the Court finds that
Mr. Towle’s only federal claim, the deprivation of a liberty interest, fails as a
matter of law. In light of this ruling, the Court will decline to exercise
supplemental jurisdiction over the remaining state law claims, and will
remand those claims to state court.
3.1

Due Process and the Deprivation of Liberty Interest in
Employment

Mr. Towle alleges that the District deprived him of a constitutionally
protected liberty interest without due process of the law. Specifically, he
alleges that he was “(a) stigmatized by the Defendants’ conduct, (b) the
stigmatizing information was publicly disclosed, and (c) he suffered a tangible
loss of employment opportunities as a result of the public disclosure.” (SAC
¶ 45).
Due process of law entitles a government employee to notice and the
opportunity to be heard before the government takes action calling into
question the employee's “good name, reputation, honor, or integrity.” Bd. of
Regents v. Roth, 408 U.S. 564, 573 (1972) (quoting Wisconsin v. Constantineau,
Page 14 of 23

400 U.S. 433, 437 (1971). The employee is deemed to have a liberty interest, for
purposes of the Due Process Clause, in his right to pursue the profession or
calling of his choice. A government employee’s liberty interests are implicated
where in terminating the employee the government “make[s] any charge
against him that might seriously damage his standing and associations in the
community” or “impose[s] on him a stigma or other disability that foreclose[s]
his freedom to take advantage of other employment opportunities.”Id. at 573.
To enforce this liberty interest in an action under Section 1983, a
discharged public employee must show: (1) he or she was stigmatized by the
employer's actions; (2) the stigmatizing information was publicly disclosed;
and (3) the employee suffered a tangible loss of other employment
opportunities as a result of the public disclosure. E.g., Townsend v. Vallas, 256
F.3d 661, 669–70 (7th Cir. 2001); Head v. Chicago Sch. Reform Bd. of Trustees, 225
F.3d 794, 801 (7th Cir. 2000); Strasburger v. Bd. of Educ., Hardin County Cmty.
Unit Sch. Dist. No. 1, 143 F.3d 351, 356 (7th Cir. 1998). Further, a plaintiff must
demonstrate that a named defendant was the individual who made the
disclosure; a “res ipsa loquiturlike approach, while perhaps sufficient to
establish that someone…published the information, does not sufficiently
establish that the someone was [a named Defendant].” McMath v. City of Gary,
976 F.2d 1026, 1031 (7th Cir. 1992) (emphasis in original). Further, the specific
stigmatizing statements must be made public; statements made to employees
within a department are not considered public dissemination. Id. at 1035–36.
Mr. Towle alleges two separate incidents in support of his liberty
interest claim: (1) the February 10, 2010 email sent to BDEA remembers; and
(2) Dr. Kerr’s statement to the media.

Page 15 of 23

3.1.1

February 10, 2010 Email to BDEA

The undisputed facts show that on February 10, 2010, Dr. Kerr spoke
with Ms. Schuerman, the District’s Director of Library Media Services and
President of the BDEA. (DPFF ¶ 41).7 Following this meeting, Ms. Schuerman
sent the email, allegedly on behalf of Dr. Kerr, to the eleven members of the
Executive Committee of the BDEA. (PPFF ¶ 32). The email stated, among
other things, that “Edward Towle has been placed on administrative leave for
irregular accounting and business practices.” (PPFF ¶ 32).
The District argues that this claim fails at the outset because the
statement was not made public. Dr. Kerr made the statement to Ms.
Shuerman, a District Employee, who then shared the information with the
eleven ADEA members. The District argues that because the email was
circulated only to District employees, the statement was not public. (See Defs’
Opening Br. at 6, Docket #61).
“The public-disclosure element requires that the defendant actually
disseminate the stigmatizing comments in a way that would reach potential
future employers or the community at large.” Palka v. Shelton, 623 F.3d 447,
454 (7th Cir. 2010). Specifically, stigmatizing “statements made to employees
within a department are not considered public dissemination.” Covell v.
Menkis, 595 F.3d 673, 678 (7th Cir. 2010). In Cheng v. Ford, No.
15-CV-527-DRH-DGW, 2015 WL 4082865, *1 (S.D. Ill. July 6, 2015), the court
found that the plaintiff had plead herself out of court at the outset because she

7

The parties dispute Dr. Kerr’s true intention for holding this meeting. Dr.
Kerr maintains that she met with them to submit purchase orders and make
requests for funding; Mr. Towle asserts that the reason for the meeting was to tell
them about his placement on leave. This issue, however, is immaterial. (See DPFF
¶ 41 and Pl’s Response).

Page 16 of 23

only alleged that the defendant “disseminated [the stigmatizing] information
to its own Human Resources Department or ‘other hiring bodies’ within the
City – not the community at large or future employers.” Id. at *4.
Here, the Court agrees with the District and finds that the email
statement was not publicly disclosed. Dr. Kerr sharing information with
members of the District does not constitute public disclosure. See Covell v.
Menkis, 574 F. Supp. 2d 874, 886–87 (C.D. Ill. 2008), aff'd, 595 F.3d 673 (7th Cir.
2010) (“Because Cowles was affiliated with the Commission, however, that
does not constitute public disclosure.”) Notably, Mr. Towle does not dispute
that the eleven members of the BDEA who received the email were employees
of the District. (See DPFF ¶ 46 and Pl’s Response). Instead, he focuses on the
BDEA’s affiliations with organizations representing thousands of union
members throughout the state—namely, the Wisconsin Education Association
Council and the National Education Association. (See ¶ PPFF 75). This
argument, however, misses the mark; whether Dr. Kerr shared the alleged
stigmatizing statements with people merely affiliated with members of the
public is not the relevant question.
Similarly, the fact that the information eventually reached members of
the public also fails to save Mr. Towle’s argument. “Summary judgment is the
‘put up or shut up’ moment in a lawsuit,” Siegel v. Shell Oil Co., 612 F.3d 932,
937 (7th Cir. 2010) (quoting Johnson v. Cambridge Indus., Inc., 325 F.3d 892, 901
(7th Cir. 2003)), and Mr. Towle has produced no evidence that the email
statements were made to anyone but District employees. As such, the Court
finds that the statements were not publicly disclosed, and Mr. Towle’s liberty
claim as to the email statement fails as a matter of law.

Page 17 of 23

3.1.2

Dr. Kerr’s Statement to the Media

Second, Mr. Towle alleges he was deprived of a liberty interest when
Dr. Kerr made a media statement on April 26, 2010, that Mr. Towle had been
placed on “paid administrative leave pending an investigation into serious
concerns about operations in the Business Office.” ( SAC ¶ 26). The District
does not argue, nor could it, that the statements were not public; instead, it
argues the statement does not constitute the type of sufficiently stigmatizing
statement that gives rise to a viable liberty interest claim. (Defs’ Opening Br.
at 6-9, Docket #61).
“A person has no cognizable liberty interest in his reputation;
consequently, allegations which merely damage one’s reputation do not
implicate a liberty interest.” Beischel v. Stone Bank Sch. Dist., 362 F.3d 430, 439
(7th Cir. 2004) (citing Paul v. Davis, 424 U.S. 693 (1976)). This is true even when
a statement causes serious impairment of one’s future employment. Hojnacki
v. Klein–Acosta, 285 F.3d 544 (7th Cir. 2002). However, when a state actor
attacks a person’s good name in a manner that makes it “virtually impossible”
for the person to find new employment, that person’s liberty interest to
pursue his occupation is infringed. Townsend, 256 F.3d at 661. The alleged
defamatory statements must be false statements of fact. Strasburger v. Bd. of
Educ. of Hardin Cnty., 143 F.3d 351 (7th Cir. 1998). In such a case, a hearing is
required. Doyle v. Camelot Care Centers, Inc., 305 F.3d 603 (7th Cir. 2002).
The District puts forth two arguments as to why Dr. Kerr’s media
statements were not so stigmatizing to warrant a liberty interest. First, it
argues that the statement does nothing more than reiterate the circumstances
or concerns leading to a suspension. The District relies upon Terry v. Woods,
803 F. Supp. 1519 (E.D. Wis. 1992), where the court found statements were not

Page 18 of 23

so stigmatizing to give rise to a liberty interest. There, the defendant told the
media that the plaintiff had been “suspended with pay pending an
investigation of a report that he scolded a teacher for calling firefighters after
she smelled smoke.” Id. at 1524. Additionally, the defendant stated, “These are
serious charges, and we want to deal with them as soon as we can.” Id. The
court found the statements did not seriously damage the plaintiff’s reputation,
and noted that “although the suspension may have lent some legitimacy to
the…charges, the defendants in suspending Terry did not explicitly or
implicitly adopt those charges.” Id. Second, the District argues that regardless,
Dr. Kerr’s statement did not give rise to a liberty interest requiring a hearing
because it only expressed concerns about the operation and management of
the Business Office.
Here, the Court finds that Dr. Kerr’s statement to the media was not
sufficiently stigmatizing to give rise to a liberty interest. Mr. Towle argues,
without any support, that Dr. Kerr’s statement attacked his “honesty,
reputation, and good name.” (Pl’s Opp. at 39, Docket #78). The Court would
not, however, characterize the statement, “serious concerns about operations
in the Business Office,” in this light. The statement itself is quite general, and
fails to give any specific detail about what type of concerns the District had
about Mr. Towle. Certainly, the statement could mean that the District
questioned Mr. Towle’s reputation and honesty, but it could also mean the
District merely questioned his business management skills. And, the Seventh
Circuit has explicitly held that “‘a mere charge of mismanagement is not
enough to give rise to a liberty interest requiring a hearing. [citation omitted]
Liberty is not infringed by a label of incompetence or a failure to meet a
specific level of management skills.’” Uchny v. Merton Cmty. Sch. Dist. 249 F.3d

Page 19 of 23

686, 704 (7th Cir. 2004) (quoting Lashbrook v. Oerkfitz, 65 F.3d 1339, 1348 (7th
Cir.1995)); accord Head, 225 F.3d at 802 (upholding dismissal of liberty interest
claim where defendants made charges of “ineptitude and professional
inadequacies); Hadley v. Cnty. of DuPage, 715 F.2d 1238, 1247 (7th Cir. 1983)
(finding that even a statement of mismanagement did “not foreclose other
employment opportunities and therefore did not require the County Board
to provide a hearing”).
Within the Seventh Circuit, cases finding a liberty interest contain far
more stigmatizing allegations than having “serious concerns about operations
in the Business Office.” See, e.g., Lashbrook, 65 F.3d at 1348–49 (listing charges
of immorality, dishonesty, alcoholism, disloyalty, Communism, or subversive
acts as the sort of charges that infringe an employee’s liberty); Ratliff v. City of
Milwaukee, 795 F.2d 612, 625–26 (7th Cir. 1986) (concluding that charges of
untruthfulness, neglect of duty, and insubordination against a police officer
impose sufficient stigma). In this case, the Court is unconvinced that Dr.
Kerr’s statement to the media were sufficiently stigmatizing to essentially
blacklist Mr. Towle from his chosen profession. Significantly, this particular
statement did not occur until April 26, 2010, and the undisputed facts show
that Mr. Towle sought new employment without success beginning in
February of 2009. (See PPFF ¶ 90). As such, the Court declines to place the
blame for Mr. Towle’s inability to obtain employment on this one statement
that occurred approximately fifteen months into his job search.
In sum, the Court finds that Mr. Towle’s liberty claim regarding Dr.
Kerr’s statement to the media fails as a matter of law. As such, the Court will
grant the District’s motion for summary judgment as to Mr. Towle’s
constitutional liberty interest claim.

Page 20 of 23

3.2

State Law Claims

As noted above, Mr. Towle has alleged various state law claims against
the defendants, the intricacies of which the Court declines to elaborate on
because the Court declines to exercise supplemental jurisdiction over those
claims. This is the proper course because the plaintiff has no viable federal
claims remaining. 28 U.S.C. § 1367(c)(3); Al’s Serv. Ctr. v. BP Prods. N. Am.,
Inc., 599 F.3d 720, 727 (7th Cir. 2010) (“When all federal claims in a suit
in federal court are dismissed before trial, the presumption is that the
court will relinquish federal jurisdiction over any supplemental state-law
claims.”). The Court certainly recognizes that, in some circumstances,
exercising supplemental jurisdiction may be proper at this stage, however
this is not that case.
To begin, this branch of the Court only recently became involved with
this case. Thus, unlike many cases where a district judge may be in the best
position to preside over state law issues due to his or her familiarity with the
issues, this Court is not in that position. This litigation has spanned over five
years at this juncture, but the Court became involved only about a month ago.
Additionally, as Mr. Towle highlights in his opposition, it appears that
the parties’ arguments may involve novel arguments regarding state law.
Accordingly, the Court declines to exercise supplemental jurisdiction over the
remaining state law claims, and the Court will remand those claims to state
court.
4.

MOTION TO CLARIFY OR AMEND COMPLAINT
As briefly discussed above, on August 30, 2016, well after the motion

for summary judgment was briefed, Mr. Towle filed a motion to clarify the
scope of the first and fifth claims—the breach of contract claim and the due

Page 21 of 23

process claim under the United States Constitution—or, alternatively, for the
Court to grant him leave to file a third amended complaint. (Docket #89 at 1).
The Court has already addressed the clarification issue, and will now deny
Mr. Towle’s motion to amend the complaint for a third time.
The deadline to amend pleadings in this case was April 26, 2013.
(Docket #34). Now, over three years later, and after the lengthy briefing
of summary judgment, Mr. Towle wishes to amend his complaint that
was originally filed in June 2011. A motion to amend rests “purely within the
sound discretion of the district court.” Soltys v. Costello, 520 F.3d 737, 743 (7th
Cir. 2008). Reasons for denying such a motion include undue delay, prejudice
to the non-moving party, or futility of the pleading. Id. The Court need not
dwell on this issue because it is clear that the District would be prejudiced by
allowing new claims at this late stage in the litigation. Thus, the Court will
deny Mr. Towle’s motion to amend the complaint.
5.

CONCLUSION
In sum, the Court finds that Mr. Towle’s federal liberty interest claim

fails as a matter of law, and the Court will grant summary judgment on this
claim. Because no other federal claims remain, the Court declines to exercise
supplemental jurisdiction over the remaining state law claims, and the Court
will remand those claims to the Milwaukee County Circuit Court from where
this action was removed.
Accordingly,
IT IS ORDERED that the District’s motion for summary judgment
(Docket #60) be and the same is hereby GRANTED in part as more
thoroughly described above;

Page 22 of 23

IT IS FURTHER ORDERED that the Court declines to exercise
supplemental jurisdiction over the plaintiff’s state law claims;
IT IS FURTHER ORDERED that Mr. Towle’s motion to clarify scope
or, alternatively, to amend the second amended complaint (Docket #88) be
and the same is hereby DENIED; and
IT IS FURTHER ORDERED that the remaining state law claims in this
action be and the same are hereby REMANDED to the Milwaukee County
Circuit Court for further proceedings.
The Clerk of Court is directed to take all appropriate action to
effectuate the remand.
Dated at Milwaukee, Wisconsin, this 29th day of September, 2016.
BY THE COURT:

J.P. Stadtmueller
U.S. District Judge

Page 23 of 23