Wurm v. Valders Area School District et al

Filing 20

DECISION AND ORDER signed by Chief Judge William C Griesbach on 5/15/2015 denying as moot 7 Motion to Dismiss; granting 15 Motion to Dismiss. The fourth cause of action is dismissed with prejudice as to all parties. The fifth cause of action is dismissed as to Defendant Hunt in her official capacity. The Clerk is directed to set this matter on the court's calendar for a telephone scheduling conference. (cc: all counsel) (Griesbach, William)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN

TRACIE L. WURM,
Plaintiff,
v.

Case No. 14-CV-1119

VALDERS AREA SCHOOL DISTRICT et al.,
Defendants.

DECISION AND ORDER GRANTING MOTION FOR PARTIAL DISMISSAL

Before the court is the defendants’ motion to dismiss the fourth cause of action in the
amended complaint, alleging a due process violation under 42 U.S.C. § 1983 arising out of the nonrenewal of Plaintiff Tracie Wurm’s contract for employment as the School Psychologist/Special
Education Director of the Valders Area School District (ECF No. 15). The defendants also request
dismissal of the fifth cause of action, which asserts a First Amendment claim under § 1983, to the
extent Plaintiff seeks relief from Defendant Debra Hunt in her official capacity. For the reasons
below, the motion will be granted.

BACKGROUND
Dr. Tracie Wurm was employed by the Valders Area School District (the District) from 2001
to June 2011. The Superintendent of the District was Dr. Debra Hunt, and Jennifer Berge, Eugene
Borgwardt, James Kocourek, Roger Manke, Brenda Platten and John Thews are present or former
members of the School Board (the Board). The District, Dr. Hunt, the Board and these individual
board members are each defendants in this case. The following facts are stated in the amended

complaint and exhibits attached thereto.
Plaintiff’s most recent employment contract with the District was effective July 1, 2010 to
June 30, 2011.

(Am. Compl. Ex. 3, ECF No. 13-3.)

Under the “Contract for Certified

Administrators,” Plaintiff’s responsibilities as Director of Special Education and School Psychologist
included performing “at a professional level of competence the services, duties and obligations
required by the laws of the State of Wisconsin and the rules, regulations and policies of the School
Board,” and participating in “professional meetings and college level courses for the purpose of
improving and stimulating [her] professional growth.” (Id. at 1.) Plaintiff’s salary for 2010 was
$76,405.00 (id.) and she earned about $80,708 in 2011 (Am. Compl. ¶ 100, ECF No. 13).
The contract also provided that renewal and non-renewal thereof was governed by
subsections 118.24(6) and (7) of the Wisconsin Statutes. (ECF No. 13-3 at 1.) These sections
provide:
(6) The employment contract of any person described under sub. (1) [including
contracts of school district administrators] shall be in writing and filed with the
school district clerk. At least 4 months prior to the expiration of the employment
contract, the employing school board shall give notice in writing of either renewal of
the contract or of refusal to renew such person's contract. If no such notice is given,
the contract then in force shall continue in force for 2 years. Any such person who
receives notice of renewal or who does not receive notice of renewal or refusal to
renew the person's contract at least 4 months before the contract expiration shall
accept or reject the contract in writing on or before a date 3 months prior to the
contract expiration. No such person may be employed or dismissed except by a
majority vote of the full membership of the school board. Nothing in this section
prevents the modification or termination of an employment contract by mutual
agreement of the parties. No school board may enter into a contract of employment
with any such person for a period of time as to which such person is then under a
contract of employment with another school board.
(7) Prior to giving notice of refusal to renew the contract of any person described
under sub. (1), the employing board shall give such person preliminary notice in
writing by registered mail at least 5 months prior to the expiration of such contract
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that the board is considering nonrenewal of the contract, and that if such person files
a written request with the board within 7 days after receiving such notice, the person
has the right to a hearing before the board prior to being given written notice of
refusal to renew the contract. The written request for a hearing shall include a
statement requesting either a private hearing or a public hearing before the board.
Section 118.22 does not apply to such a proceeding. If a hearing concerning
nonrenewal of the contract is requested, the reasons upon which the board is
considering nonrenewal may also be requested and the board shall furnish such
reasons before the hearing in writing.
Wis. Stat. § 118.24(6)–(7). Finally, Plaintiff’s contract provided:
The Board will reimburse the Administrator $125.00 for each graduate credit. To
be reimbursed, the grade of A or B is required. If the Administrator is still employed
by the district three (3) years after completion of the course, the balance of the total
cost of the credits will be reimbursed to the Administrator.
(ECF No. 13-3 at 3.)
Plaintiff received a “Preliminary Notice of Consideration of Non-Renewal” on December 21,
2010. The notice stated the reasons for the consideration of non-renewal were budgetary. Plaintiff
requested a public hearing, which was held January 4, 2011. At the hearing, Dr. Hunt, the
Superintendent, advised the Board that elimination of Plaintiff’s position was a budgetary, costsaving measure. In response, Plaintiff “detailed several reasons why eliminating her position would
not save the District money.” (Am. Compl. ¶ 66.) Plaintiff proposed reducing her contract to ten
months, reducing her compensation to 80 percent of what it was, and combining her positions with
a guidance counselor role. (Id.) According to the amended complaint, board members responded
by stating that they would not consider such alternatives in the meeting, but would have to address
them at a separate meeting. (Id. ¶ 67.)
Plaintiff also raised other “issues of public concern” at the hearing, including that the
elimination of her position would drop the District below the National Association for School

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Psychologists’ prescribed ratios for the number of psychologists per student, that reduction of the
Director of Special Education position to part-time would prevent the District from meeting the
needs of students and that many of the District’s existing practices had the effect of discriminating
against students with disabilities. (Id. ¶ 68.) At the end of the hearing, the Board voted not to renew
Plaintiff’s contract for the following year. (Id. ¶ 69.)
In a news article published two days after the hearing Dr. Hunt was quoted as stating that
the Board’s decision not to renew Plaintiff’s contract was “purely a budget matter and has nothing
to do with discipline or quality of work.” (Id. ¶ 64.) Hunt was also quoted as stating that
eliminating Plaintiff’s position would save the District $75,000 to $89,000 a year. Thereafter, the
District announced that Hunt would assume Plaintiff’s responsibilities as Director of Special
Education and that the District would be hiring a part-time employee to fill the position of School
Psychologist. (Id. ¶¶ 70, 74.) Plaintiff requested to be considered for the part-time position but the
District indicated that it would not consider her. According to the amended complaint, in previous
instances where the District’s full-time positions have been reduced to part-time, the District offered
the eliminated full-time employee the part-time position before posting it. (Id. ¶¶ 76–77.) In May
2011, the District changed the posting for the School Psychologist position to full-time. Plaintiff,
who was just finishing her 2010–2011 term of employment for that position, formally applied. (Id.
¶¶ 93–94.) Ultimately the District hired a new employee as a full-time School Psychologist at a
starting salary of $60,247.00. (Id. ¶ 97.) According to a publication reporting the new hire, Dr.
Hunt also received a $15,000 raise for assuming Plaintiff’s responsibilities as Director of Special
Education. (Id. ¶ 98.) Accordingly, Plaintiff alleges that the termination of her employment caused
the District to lose money, not save it. (Id. ¶ 105.)
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The amended complaint also states that before the January 4 hearing Plaintiff had requested
reimbursement of approximately $5,000 in graduate tuition expenses she had incurred. (Id. ¶ 80.)
When Plaintiff raised the issue after the hearing, Dr. Hunt responded, “When you had talked to me
requesting reimbursement for the graduate credits/classes that you had taken less than three years
ago, I had said that it would be presented to the School Board if you resigned from your position.
You did not resign. The Board endured an Open Hearing. You will not be reimbursed for the
graduate credits/classes you had taken less than three years ago.” (Id. ¶ 81.)
On July 1, 2011, Plaintiff filed a charge with the Equal Employment Opportunity
Commission. Dr. Hunt subsequently contacted a potential employer of Plaintiff’s and advised of a
“legal matter” involving her. Thereafter, a news article reported that the School Board was
investigating a former non-teaching employee, and that the police chief had been brought into the
matter. (Id. ¶¶ 109–110.) Plaintiff amended her EEOC complaint July 16, 2012 to include new
incidents of discrimination and retaliation. One week later, based on information Plaintiff says the
District had for more than a year, the District contacted the State of Wisconsin Department of Public
Instruction (DPI) and alleged that Plaintiff had engaged in “immoral conduct.” The District sought
revocation of Plaintiff’s professional licenses. (Id. ¶¶ 112–13.) The DPI determined there was no
probable cause to revoke Plaintiff’s license on November 30, 2012. (Id. ¶ 115.)
Without issuing a finding as to whether any violations occurred, the EEOC closed its file on
Plaintiff’s charge on June 17, 2014 and Plaintiff timely filed this action on September 13, 2014.
Plaintiff asserts claims of age discrimination, disability discrimination under the Americans with
Disabilities Act and the Rehabilitation Act (based on alleged retaliation against Plaintiff for helping
the District’s disabled students exercise their rights), and, as discussed in more detail below,
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violations of due process and the First Amendment under 42 U.S.C. § 1983. After Defendants
moved to dismiss the § 1983 claims, Plaintiff filed an amended complaint asserting the same five
claims and adding grounds to support the alleged constitutional violations.

ANALYSIS
In deciding a motion to dismiss, the court construes the allegations in the complaint in a light
most favorable to the plaintiff, accepts all well-pleaded facts as true, and draws all inferences in favor
of the non-moving party. Estate of Davis v. Wells Fargo Bank, 633 F.3d 529, 533 (7th Cir. 2011).
To state a claim, a complaint must contain sufficient factual matter “that is plausible on its face.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544,
570 (2007)). Dismissal for failure to state a claim under Rule 12(b)(6) of the Federal Rules of Civil
Procedure is proper “when the allegations in a complaint, however true, could not raise a claim of
entitlement to relief.” Twombly, 550 U.S. at 558.
I.

Due Process Claim
Plaintiff claims the non-renewal of her employment contract deprived her of liberty and

property without due process of law. Specifically, Plaintiff alleges the stated reason for her nonrenewal was “inadequate and entirely not true,” that she had “no opportunity to be heard as it related
to the true reason(s) for terminating her employment,” that Defendants had “pre-determined to
terminate [her] employment” prior to the January 4, 2011 hearing, and that, “without due process
of any kind,” Defendants prevented her from enjoying the full benefits of her employment, prevented
her from obtaining employment within the District, and accused her of “immoral conduct” in the
complaint to the DPI. (Am. Compl. ¶¶ 139–45.) She asserts this claim against all ten defendants,
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including as to Dr. Hunt in her individual and official capacities and the board members in their
individual capacities.
Defendants argue the due process claim must be dismissed because Plaintiff has not alleged
that she was deprived of a liberty or property interest cognizable under the Fourteenth Amendment.
As explained below, I agree.
A. No Property Interest
Regardless of what notice and opportunity to be heard were or were not provided, Plaintiff
must assert she was deprived of an interest in liberty or property. When the government is the
employer, one may claim the government-employer deprived an employee of his or her property
interest in continued employment, but only if the employee has a property interest in continued
employment:
the Supreme Court [has] noted that a property interest requires more than a
“unilateral expectation” of a benefit and is not created simply because a person may
have “an abstract need or desire” for such a benefit. To the contrary, to have a
property interest a person must “have a legitimate claim of entitlement to it.” It is
also clear that such legitimate claims for entitlements are not derived from the
Constitution itself; “[r]ather, they are created and their dimensions are defined by
existing rules or understandings that stem from an independent source such as state
law—rules or understandings that secure certain benefits and that support claims of
entitlement to those benefits.” [I]n the employment context this means that a
property interest can be created in one of two ways: (1) “by an independent source
such as state law securing certain benefits;” or (2) by “a clearly implied promise of
continued employment.”
Shlay v. Montgomery, 802 F.2d 918, 921 (7th Cir. 1986) (internal citations omitted).
Here, Plaintiff argues she had an interest in continued employment because she could not be
terminated without “just cause.” But her argument is belied by her contract and rests on a
misreading of state and federal regulations. With respect to her contract, renewal or non-renewal

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is expressly governed by Wis. Stat. § 118.24(6) and (7). Subsection (6) provides the mechanism by
which an administrator’s contract may be renewed and subsection (7) prescribes the procedure to
be used when a school board decides not to renew. There is a procedure to be followed, but nothing
in the procedure assures the administrator any expectation of continued employment or secures for
the administrator any substantive job protection beyond the two-year term of employment provided
for in the contract itself. Indeed, the Seventh Circuit has clearly reached the same conclusion,
holding that a contract incorporating Wis. Stat. § 118.24(6) and (7) creates no property interest in
continued employment. See Beischel v. Stone Bank School District, 362 F.3d 430, 436 (7th Cir.
2004) (“[W]e are convinced that under Wisconsin law [the plaintiff] did not have a legitimate
expectation that her employment would continue beyond the 2–year term of her contract. There are
no statutory limitations [under Wis. Stat. § 118.24] as to the bases on which the nonrenewal decision
can rest.”).
Nonetheless, Plaintiff argues state and federal regulations require that she be terminated only
for just cause. According to Plaintiff, the District is required by state and federal law to dedicate
financial efforts and other efforts to accommodate its students with special needs. As the District’s
Director of Special Education, Dr. Wurm contends that her compensation accounted for some of the
District’s requisite efforts in this regard. She argues that federal regulations attendant to these
obligations also required Defendant District to have “just cause” for terminating her employment.000
(Pl.’s Br. in Resp. 14, ECF No. 18)
The “just cause” provision Plaintiff relies on comes from regulations governing funds
received by “Local Educational Agencies” like the District under the Individuals with Disabilities
Education Act (IDEA). Regulations governing such agencies’ “maintenance of effort” are intended
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to ensure that the level of state and local expenditures for the education of children with disabilities
remains relatively constant from year to year. See 34 C.F.R. § 300.203(a) (“funds provided to an
LEA under [part B of the IDEA] must not be used to reduce the level of expenditures for the
education of children with disabilities made by the LEA from local funds below the level of those
expenditures for the preceding fiscal year.”). The regulations further provide that the level of
expenditures may be decreased without violating the “maintenance of effort” requirement if the
reduction is attributable to the “voluntary departure, by retirement or otherwise, or departure for
just cause” of special education or related services personnel. 34 C.F.R. § 300.204(a) (emphasis
added).
These regulations impose obligations on the District regarding its receipt of IDEA funds; they
confer no benefit or interest in continued employment on Plaintiff. The regulations provide no
assurance whatsoever that her employment will not be terminated but for cause. Rather, they merely
provide that if positions like hers are eliminated without cause, the District will not be excused from
the “maintenance of effort” requirement. Thus, if special education personnel are dismissed without
“just cause,” the District will have to maintain its level of expenditure (i.e., hire someone else) or
face penalties, such as loss of eligibility for IDEA funds or the requirement to repay such funds
already received.
The only case Plaintiff cites in support of her reliance on these regulations is inapposite. In
Perry v. Sindermann, a professor claimed an interest in tenure arising out of the fact that although
no such benefit was provided for in his contract, his employer maintained a de facto tenure program.
408 U.S. 593, 599 (1978). The Court found that the teacher could legitimately rely on the
employer’s longstanding practice and an employee handbook that stated such a program existed.
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The Court noted that given this evidence, a genuine dispute of fact existed as to whether he was
entitled to the benefit—i.e., whether “rules or mutually explicit understandings . . . support his claim
of entitlement to the benefit[.]” Id. at 601. In this case, by contrast, Plaintiff has not cited any
practice or rule of her employer that showed administrators’ contracts must be renewed unless there
was good cause; rather, as explained above, her contract and state law provided for just the
opposite—essentially, something more akin to “at-will” employment than employment that can be
terminated only “for cause.” See Beischel, 362 F.3d at 436.
Plaintiff also claims she was “assured of continued employment” because at the District’s
request over the years, she had made significant investments of her time and resources into her
professional development. But the fact that an employer encourages professional development falls
far short of the sort of mutually explicit understanding of continued employment required to give rise
to an interest in continued employment. Similarly, Plaintiff relies on Dr. Hunt’s assurance that she
would be reimbursed for her tuition expenses as creating a property interest. But the Seventh Circuit
has rejected arguments based on such informal assurances. See, e.g., Lee v. County of Cook, 862
F.2d 139, 142–43 (7th Cir. 1998) (“Ms. Osterman's statement that Ms. Lee's ‘job was secure and
would continue as long as she kept up the good work’ does not constitute an implied contract or
mutually explicit understanding . . . .”). This is particularly true when the matter at issue (in
Plaintiff’s case, tuition reimbursement) is expressly governed by contract or state law, and when the
individual that made the assurance lacks authority to bind the state to such a promise in any event.
See McElearney v. University of Illinois at Chicago Circle Campus, 612 F.2d 285, 290 (7th Cir.
1979) (“[A]gainst the background of formal, explicit rules governing the tenure status of faculty
members, such representations and interim promotion do not create a property interest in
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employment.”); Lee, 862 F.2d at 143 (“[A] first-line manager like Ms. Osterman clearly lacked the
authority to bind the state. Therefore, her statements can hardly be construed as a mutually explicit
understanding of job tenure.”).
Finally, Plaintiff argues she had a property interest in “re-employment” in the District. The
argument is based on her allegation that, “[o]n information and belief, in previous instances where
the District’s full-time positions have gone to part-time, the District offered the eliminated full-time
employee(s) the part-time position before posting it.” (Am. Compl. ¶ 77.) Like an employer who
encourages professional development, however, the fact that a school district has retained other
employees in part-time positions after their full-time positions have been eliminated falls far short of
establishing a property interest in re-employment under which every employee whose position is
reduced is entitled to re-employment. In sum, Plaintiff has failed to state a plausible claim that she
was deprived of a property interest without due process of law.
B. No Liberty Interest
Plaintiff also purports to base her due process claim on a liberty interest. Her claim is based
on the fact that the District accused her of “immoral conduct” in a complaint to the DPI seeking to
revoke her professional license and prevented her from obtaining employment within the District.
(Am. Compl. ¶¶ 144–45.) There is no allegation, however, that the charge was made publicly.
Indeed, there is no allegation even of what the accusation was.
“It is well-established that an individual does not have any cognizable liberty interest in his
reputation, and therefore mere defamation by the government does not deprive a person of liberty
protected by the Fourteenth Amendment, even when it causes serious impairment of one's future
employment.” O’Gorman v. City of Chicago, 777 F.3d 885, 891 (7th Cir. 2015) (quotations
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omitted). Rather, it is “[o]nly when paired with the alteration of legal status, such as a right
previously held, will such defamation implicate due process rights.” Id. Put another way, “the
Supreme Court [has] suggested . . . that the state infringes on an employee's liberty interests if it
discharges an employee while making false charges against him, so damaging the employee that he
is precluded as a practical matter from finding other government employment.” Strasburger v.
Board of Education, 143 F.3d 351, 355–56 (7th Cir. 1998) (citing Board of Regents of State
Colleges v. Roth, 408 U.S. 564, 573 (1972)).
In this case, although Plaintiff believes the DPI charge is part of her “permanent record,”
there is no allegation as to how the matter has “precluded [her] as a practical matter” from further
employment. And whether the District’s DPI complaint was defamatory or not, Plaintiff certainly
suffered no alteration of legal status as a result thereof. As stated in the complaint, the DPI dropped
the matter and declined to pursue revocation of her license. (Am. Compl. ¶ 115.) Moreover, the
District did not make the allegedly defamatory statement when Plaintiff was fired, but more than a
year later.
From the foregoing, it follows that Plaintiff has also failed to state a plausible claim that she
was deprived of a liberty interest without due process of law. For all of these reasons, Plaintiff’s
fourth cause of action alleging a violation of due process will be dismissed.
II.

First Amendment Claim as to Defendant Hunt
Defendants also move to dismiss Plaintiff’s fifth cause of action as to Dr. Hunt in her official

capacity because the claim is redundant. Plaintiff’s fifth cause of action asserts a First Amendment
violation under 42 U.S.C. § 1983 against all defendants (Am. Compl. ¶ 151), including, as indicated
in the caption to the amended complaint, the individual Board Members in their “individual
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capacities” and Dr. Hunt in her “individual and official capacities.” Defendants correctly note that
an action for damages against a party in her official capacity is, in essence, an action against the
governmental entity of which the official is an agent. Monell v. Dept. of Social Serv’s, 436 U.S. 658,
690 n.55 (1978); Kentucky v. Graham, 473 U.S. 159, 165–66 (1985) (claim against an individual
in his official capacity is “in all respects other than name, to be treated as a suit against the
[municipal] entity . . . for the real party in interest is the entity.”). Because Plaintiff also asserts the
First Amendment claim against the District, Defendants contend the official-capacity claim against
Dr. Hunt should be dismissed as duplicative. See Ball v. City of Munie, 28 F. Supp. 3d 797, 802
(S.D. Ind. 2014).
Plaintiff’s only argument against dismissal of the official-capacity claim as to Hunt is that
Plaintiff seeks not only damages but prospective, injunctive relief. Plaintiff relies on Will v. Michigan
Dep’t of State Police, where the Supreme Court noted that “[o]f course a state official in his or her
official capacity, when sued for injunctive relief, would be a person under § 1983 because
official-capacity actions for prospective relief are not treated as actions against the State.” 491 U.S.
58, 71 n.10 (1989) (quotation omitted). Will is inapplicable here because the District is subject to
the same claim for prospective relief, and the district, unlike the state in Will, is not entitled to
sovereign immunity. Accordingly, the official-capacity claim as to Dr. Hunt will be dismissed, but
the individual-capacity claims against Hunt and the other Board Members will remain, along with the
claim against the District and the Board.
THEREFORE, IT IS HEREBY ORDERED that Defendants’ second motion for partial
dismissal (ECF No. 15) is GRANTED. The Fourth Cause of Action is dismissed with prejudice as
to all parties. The Fifth Cause of Action is dismissed as to Defendant Hunt in her official capacity.
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Defendants’ first motion to dismiss (ECF No. 7) is DENIED AS MOOT. The Clerk is hereby
directed to set this matter on the court’s calendar for a telephone scheduling conference.
Dated this 15th day of May, 2015.
s/ William C. Griesbach
William C. Griesbach, Chief Judge
United States District Court

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