Opinion
6:18-cv-01626-MK
03-31-2021
WILLIAM EWING, Plaintiff, v. CITY OF TOLEDO; CRAIG MARTIN; in his individual capacity; BILLIE JO SMITH, in her individual capacity; and DAVID JAMES ROBINSON, in his individual capacity, Defendants.
FINDINGS AND RECOMMENDATION
MUSTAFA T. KASUBHAI, UNITED STATES MAGISTRATE JUDGE.
Plaintiff William Ewing initially filed this civil rights and whistleblower lawsuit pursuant to federal and state law in late 2018. See Am. Compl., ECF No. 9 (“AC”). Defendants filed a motion to dismiss, which this Court ultimately recommended granting in part and denying in part in an amended findings and recommendation (“F&R”). See ECF Nos. 11, 47. The district judge adopted the F&R in its entirety and granted Plaintiff leave to submit a second amended complaint (“SAC”), which Plaintiff filed in May 2020. ECF Nos. 49, 51. Currently before the Court is Defendants' motion to dismiss the SAC. ECF No. 53. For the reasons that follow, Defendants' motion should be GRANTED IN PART and DENIED IN PART.
Because resolution of this motion will require numerous references to the prior F&R, see Ewing v. City of Toledo, No. 6:18-cv-01626-MK, 2020 WL 1845814, (D. Or. Feb. 21, 2020) (this Court's prior F&R), adopted, 2020 WL 1821453 (D. Or. Apr. 10, 2020) (order adopting F&R in its entirety), references to “Ewing I” refer to this Court's February 2020 F&R. For readability, the Court will not reference the district judge's order adopting Ewing I
The SAC does not include the defamation per se and slander claims that were originally in the amended complaint. Compare Amended Compl. ¶¶ 81-98, ECF No. 9, with SAC, ECF No. 51. Accordingly, this F&R will not discuss those claims further.
BACKGROUND
The City of Toledo (the “City”) hired Plaintiff in May 1999 to serve as Fire Chief, a role he served until his termination in June 2018. SAC at ¶¶ 9, 45. In August 2016, the City hired Defendant Craig Martin (“Martin”) as the Interim City Manager, eventually hiring Martin to the position on a permanent basis. Id. at ¶¶ 10, 14. Plaintiff's and Martin's relationship was contentious from the beginning. For example, Plaintiff was critical of Martin's management, specifically concerning Martin's budget allocation to various City projects. Id. at ¶ 15. Plaintiff shared his concerns to various individuals, including Defendant Mayor Billie Jo Smith (“Smith”) during a City Council meeting. Id. at ¶ 16.
In August 2017, Nancy Bryant (“Bryant”), a City employee, accused Martin of intimidation, harassment, and discrimination, which prompted an internal investigation. Id. at ¶¶ 18-19. During the investigation, another employee, Polly Chavarria (“Chavarria”) accused Martin of being dishonest with the City Council and asserted that Martin tried to change the public works director's salary without City Council approval. Id. at ¶¶ 20-21.
The investigation concluded in October 2017 with the release of a report, and shortly thereafter Martin terminated Bryant, who had initiated the inquiry. Id. at ¶¶ 22-23. At this time, Plaintiff discussed with Martin his decision to terminate Bryant. Id. at ¶ 23. Believing that Martin terminated Bryant for raising complaints about Martin's mismanagement and harassment, Plaintiff discussed his concerns about Bryant's firing with Smith. Id.
In late October 2017, Martin delivered Plaintiff a Notice of Potential Termination for unprofessionalism and disrespectful communication regarding Martin's job performance. Id. at ¶ 24. Plaintiff responded two days later to the Notice of Termination. Id. at ¶ 25. Martin suspended Plaintiff and Chavarria for a week without pay, and placed Plaintiff on a 120-day performance improvement plan. Id. at ¶ 26. In January 2018, Chavarria resigned from the City. Id. at ¶ 27.
Under the City charter, Martin served as the City's Budget Officer, which required him to prepare an annual proposed budget for submission to the City Council. Id. at ¶¶ 28-32. When the budget process began, Martin assigned Plaintiff additional budget development responsibility for the Fire Department. Id. at ¶ 33. Plaintiff was unfamiliar with these additional responsibilities and received no help or guidance from Martin. Id. at ¶ 34. As a result, Plaintiff relied on guidance from Chavarria, now the former City Finance Director, to help him with the budget process. Id. at ¶ 36-37. In March 2018, after Plaintiff submitted budget information for the fire department, Martin gave Plaintiff a revised budget that did not include fire department figures. Id. at ¶ 38. Plaintiff also questioned Martin about the revised budget, specifically that $400,000 was now missing from the reserve fund. Id.
Plaintiff alleges that at this point he was “even more alarmed” about the budget process and suspected the budget contained more errors that he could not identify himself. Id. at ¶ 39. Plaintiff requested Chavarria's assistance in reviewing the budget to identify potential errors. Id. Plaintiff instigated the review “in order to make the budget process more transparent and expose the ineptitude and mismanagement of the process.” Id. at ¶ 40. “[F]or the sake of transparency” and “the interest of the taxpayers, ” Plaintiff and Chavarria agreed that the City Council should know about the budget deficiencies. Id. Chavarria wrote a memo describing “59 errors and areas of concerns about the proposed budget.” Id. In May 2018, Chavarria shared the memo with members of the City Council, who subsequently shared the concerns with Martin while making 293 corrections to the budget prior to approving it. Id. at ¶¶ 40-41.
When confronted by Martin on May 17, 2018, Plaintiff admitted that he had given Chavarria the City's financial information “because he felt the budget was totally messed up.” Id. at ¶ 42. Plaintiff asked Martin if he wanted to terminate him, which Martin responded saying “not yet.” Id. On June 4, 2018, Martin gave Plaintiff a Notice of Potential Termination that stated, “I want to be abundantly clear that I am not considering discipline because you state that you have concerns about the City's budget or in any way involved with the memo that went to the City Council.” Id. at ¶ 43.
On June 5, 2018, Plaintiff spoke to the Newport News Times, stating the City Manager's “budget [was] so messed up” and that his “only concern [was] for the taxpayers.” Id. at ¶ 44. On June 13, 2018, Martin terminated Plaintiff, which was approved, condoned, and ratified by Smith. Id. at ¶¶ 45-46. On June 14, 2018, Plaintiff spoke with Newport News Times again, stating that Martin was “out of touch” with the budget process; he admitted that he took the financial report from the City and revealed its content to a third-party; Plaintiff expressed that “[m]ore people need to be concerned about what's happening with the tax dollars in Toledo”; he claimed that Martin was more concerned about being shown to be wrong than the error; and concluded that his “termination [was] retaliation.” Id. at ¶ 47.
One week later, on June 20, 2018, Defendant David Robinson (“Robinson”), a City attorney, accused Plaintiff of illegally releasing “non-disclosable public records” and “tramp[ling] on the rights of other taxpayers in the process.” Id. at ¶ 49 (brackets in the original). Martin provided the false and/or misleading information to Robinson that led to Robinson's statements at the City Council meeting. Id. at ¶ 50. Two days later, on June 22, 2018, Robinson requested that the Oregon Department of Justice (“DOJ”) investigate Plaintiff for “criminal conduct perpetrated against the City.” Id. at ¶ 51. However, Robinson failed to cite any evidence corroborating the accusation. Id. at ¶¶ 53-56.
On the weekend of July 14-15, 2018, Smith handed out pamphlets regarding a potential election recall to the public at a City of Toledo festival. Id. at ¶ 57. The pamphlet accused Plaintiff of dishonest and/or immoral conduct. Id. Martin or Smith could have offered him an impartial name-clearing hearing after Robinson's statements at the City Council meeting, Robinson's accusations to the DOJ, and Smith's statement in the pamphlets, but did not. Id. at ¶¶ 58-59.
On October 8, 2018, Smith gave a radio interview which accused Plaintiff of “data theft.” Id. at ¶ 60. On November 28, 2018, Lincoln County District Attorney declined to file criminal charges against Plaintiff based on DOJ's conclusion that Plaintiff accessed information that would have been otherwise available through a public records request. Id. at ¶ 61.
STANDARD OF REVIEW
A motion to dismiss for failure to state a claim may be granted only when there is no cognizable legal theory to support the claim or when the complaint lacks sufficient factual allegations to state a facially plausible claim for relief. Shroyer v. New Cingular Wireless Servs., Inc., 622 F.3d 1035, 1041 (9th Cir. 2010). In evaluating the sufficiency of a complaint's factual allegations, the court must accept as true all well-pleaded material facts alleged in the complaint and construe them in the light most favorable to the non-moving party. Wilson v. Hewlett- Packard Co., 668 F.3d 1136, 1140 (9th Cir. 2012); Daniels-Hall v. Nat'l Educ. Ass'n, 629 F.3d 992, 998 (9th Cir. 2010). To be entitled to a presumption of truth, allegations in a complaint “may not simply recite the elements of a cause of action, but must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively.” Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). All reasonable inferences from the factual allegations must be drawn in favor of the plaintiff. Newcal Indus. v. Ikon Office Solution, 513 F.3d 1038, 1043 n.2 (9th Cir. 2008). The court need not, however, credit the plaintiff's legal conclusions that are couched as factual allegations. Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009).
A complaint must contain sufficient factual allegations to “plausibly suggest an entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation.” Starr, 652 F.3d at 1216. “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007)). “The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Mashiri v. Epstein Grinnell & Howell, 845 F.3d 984, 988 (9th Cir. 2017) (quotation marks omitted).
DISCUSSION
I. Preliminary Matter
The Court must resolve one preliminary matter before reaching the substantive merits of Defendants' motion: the effect of the Court's prior F&R. See ECF Nos. 47, 49. Plaintiff maintains that the “law of the case” doctrine prohibits the Court from revisiting issues the F&R ruled on. See Pl.'s Resp. Defs.' Mot. Summ. J. 2-11, ECF No. 61 (“Pl.'s Opp'n”). Defendants counter that the “law of the case” doctrine does not apply given the procedural posture of the case and assert that invoking the doctrine would be error. Defs.' Reply 2-5, ECF No. 66.
Defendants' argument is, to some extent, well taken. Generally, a plaintiff's submission of an amended complaint “requires a new determination” from a district court. Askins v. U.S. Dep't of Homeland Sec., 899 F.3d 1035, 1043 (9th Cir. 2018) (emphasis added). However, the Ninth Circuit has made clear that a “district court may decide the second motion to dismiss in the same way it decided the first, ” so long as it makes the determination based upon the operative complaint. Id.
Here, given the Court's thorough and comprehensive analysis of Plaintiff's first amendment retaliation claim in a decision that spanned more than fifty pages, the Court declines the invitation to revisit its well-reasoned conclusions. Thus, the Court declines to depart from its prior conclusions that Plaintiff spoke on matters of public concern as a private citizen. In the interest of judicial economy, the Court will briefly explain below why the conclusions of the previously adopted F&R apply with equal force to the SAC.
II. 42 U.S.C. § 1983, First Amendment Claim
The SAC alleges a First Amendment retaliation claim against Defendants Martin, Smith, and Robinson, which Defendants have moved to dismiss. SAC ¶¶ 62-68; Defs.' Mot. Dismiss 212, ECF No. 53 (“Defs.' Mot.”).
A. Analytical Framework
Citizens who accept public employment do not surrender their First Amendment rights. Lane v. Franks, 573 U.S. 228, 231 (2014). Instead, “the First Amendment protection of a public employee's speech depends on a careful balance ‘between the interests of the [employee], as a citizen, in commenting upon matters of public concern and the interest of the State, as an employer, in promoting the efficiency of the public services it performs through its employees.'” Id. (quoting Pickering v. Board of Ed. of Township High School Dist. 205, Will Cty., 391 U.S. 563, 568 (1968)). The public has a strong interest in hearing from public employees who are often in the best position to know what ails the agency for whom they work. Dahlia v. Rodriguez, 735 F.3d 1060, 1066-67 (9th Cir. 2013) (citing Waters v. Churchill, 551 U.S. 661, 674 (1994)).
The Ninth Circuit follows a five-step balancing inquiry to determine whether an employer impermissibly retaliated against an employee for protected speech. Dahlia, 735 F.3d at 1067. “In order to sustain a claim against a government employer for violation of the First Amendment, an employee must show: (1) that he or she engaged in protected speech; (2) that the employer took adverse employment action; and (3) that his or her speech was a substantial or motivating factor for the adverse employment action.” Coszalter v. City of Salem, 320 F.3d 968, 973 (9th Cir. 2003) (internal quotations omitted); see also Eng v. Cooley, 552 F.3d 1062, 1070 (9th Cir. 2009). If a plaintiff satisfies those three elements, the Court must evaluate whether the state had adequate justification for treating the employee differently than other members of the general public; and, lastly, whether the state would have taken the adverse employment action even absent the protected speech. Dahlia, 735 F.3d at 1067. At the last two steps, the burden shifts to the defendant government to show that the state's legitimate administrative interests outweigh an employee's First Amendment rights. Eng, 552 F.3d at 1071.
B. Analysis
1. Protected Speech and Adverse Employment Action
As noted in the F&R, Plaintiff has sufficiently plead the first two elements of a First Amendment retaliation claim-i.e., that Plaintiff spoke on matters of public concern as a Private citizen and that he suffered an adverse employment action. Ewing I, 2020 WL 1845814, at *6 (“The use of public money and budgeting for the City are matters of public concern, and Ewing sufficiently alleges the first element of the claim.”); id. at *7 (“Because Ewing alleges he received a Notice of Potential Termination and was terminated, Ewing sufficiently alleges he suffered adverse employment actions.”). Accordingly, the Court declines to discuss those elements further and adopts its reasoning as articulated in the F&R. See Ewing I, 2020 WL 1845814, at *5-7.
2. Substantial or Motivating Factor
Although there is no specified period in which an adverse employment action can automatically be held retaliatory, protected speech occurring “within three to eight months of the adverse employment action is easily within a time range that can support an inference of retaliation.” Howard v. City of Coos Bay, 871 F.3d 1032, 1046 (9th Cir. 2017) (quoting Coszalter, 320 F.3d at 978). Even adverse employment actions occurring nearly a year after protected speech have been found to support a First Amendment retaliation claim. Howard, 871 F.3d at 1046 (citing Allen v. Iranon, 283 F.3d 1070, 1078 (9th Cir. 2002)). Whether an adverse employment action is retaliatory in First Amendment claims is a factual question to be decided based on timing and surrounding circumstances. Howard, 871 F.3d at 1046 (citing Cozsalter, 320 F.3d at 978).
The F&R concluded that Plaintiff sufficiently plead a First Amendment retaliation claim against Defendant Martin, and for those same reasons Defendants' motion should be denied. See Ewing I, 2020 WL 1845814, at *7 (“Ewing has sufficiently pled ultimate facts to support a First Amendment Retaliation Claim against Martin”).
However, the F&R recommended granting the motion to dismiss as to Defendants Robinson and Smith without prejudice. Id. As to Defendant Robinson, the F&R explained:
Ewing's allegations do not show that Robinson knew of Ewing's pre-[termination] speech, or that he took or could have taken adverse employment action against Ewing. While Robinson did send a letter to the DOJ requesting it investigate Ewing, he did so only after Ewing's termination. Thus, Robinson's actions regarding Ewing did not occur in the course of terminating Ewing. Said another way, Ewing alleges no facts supporting that his speech was a substantial or motivating factor in Robinson terminating Ewing. Therefore, Ewing fails to allege facts to support a claim against Robinson and the claim should be dismissed without prejudice.Id. While the SAC does not cure all the temporal deficiencies outlined in the F&R, Plaintiff has sufficiently alleged that, in his position as City Attorney, Robinson “participated in, provided guidance and influenced the decisions made by and on behalf of the City” that adversely affected Plaintiff's employment. SAC ¶ 8. At this stage of the proceedings, that allegation is sufficient for the “court to draw the reasonable inference that [Robinson] is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678 (citation omitted). However, the events upon which Plaintiff relies that occurred after his termination-such as the statements Robinson made during the June 20, 2018 City Council meeting and his June 22, 2018 letter sent to DOJ requesting an investigation- cannot plausibly be said to have been a substantial or motivating factor in Plaintiff's termination. And therefore, Plaintiff's First Amendment retaliation claims should not be permitted to proceed on those grounds.
As to Defendant Smith, the F&R explained:
Ewing's only allegation regarding Defendant Smith, prior to his termination concerns the July 11, 2017 City Council meeting, where Ewing, as a private citizen, criticized Smith for her expenditure of city funds, a matter of public concern. However, Ewing fails to plead facts showing any employment action taken against him by Smith as a result. Ewing states that Martin terminated him and fails to otherwise allege facts that the Court can use to infer that Smith, or any other defendant, took part in his termination.Id. at *8 (citation omitted). Similar to Defendant Robinson, Plaintiff may not relay on events that occurred after Plaintiff's termination to establish a First Amendment retaliation claim. However, the SAC does allege that “as Mayor, Smith encouraged Martin to terminate Ewing, and approved, condoned, and ratified the termination.” SAC ¶ 46. Contrary to Defendants' contention, assuming such an allegation is true as the Court is required to at the motion to dismiss stage, such an allegation is sufficient for the Court to infer that Defendant Smith participated in the decision to terminate Plaintiff.
III. 42 U.S.C. § 1983, Due Process Liberty Interest
The SAC next alleges a Due Process Liberty Interest claim against all remaining Defendants, which they move to dismiss. SAC ¶¶ 69-76; Defs.' Mot. 12-15, ECF No. 53.
A. Analytical Framework
“The Due Process Clause forbids the governmental deprivation of substantive rights without constitutionally adequate procedure.” Shanks v. Dressel, 540 F.3d 1082, 1090-01 (9th Cir. 2008). The Supreme Court has repeatedly recognized that “the Government has a much freer hand in dealing ‘with citizen employees than it does when it brings its sovereign power to bear on citizens at large.'” NASA v. Nelson, 562 U.S. 134, 148 (2011) (quoting Engquist v. Oregon Dep't of Agric., 553 U.S. 591, 598 (2008)). “This distinction is grounded on the ‘common-sense realization' that if every ‘employment decision became a constitutional matter,' the Government could not function.” Id. at 148-49 (quoting Connick, 461 U.S. at 143); see also Bishop v. Wood, 426 U.S. 341, 350 (1976) (“The Due Process Clause ... is not a guarantee against incorrect or ill-advised personnel decisions.”).
To prevail on a procedural due process claim, a plaintiff must establish: (1) a constitutionally protected liberty or property interest; (2) a deprivation of that interest by the government; and (3) the lack of adequate process. Shanks, 540 F.3d at 1090. “To establish a substantive due process claim, a plaintiff must, as a threshold matter, show a government deprivation of life, liberty, or property.” Nunez v. City of Los Angeles, 147 F.3d 867, 871 (9th Cir. 1998). Thus, “[a] threshold requirement to a substantive or procedural due process claim is the plaintiff's showing of a liberty or property interest protected by the Constitution.” Wedges/Ledges of California, Inc. v. City of Phoenix, 24 F.3d 56, 62 (9th Cir. 1994). Because both procedural and substantive due process claims require the deprivation of a constitutionally protected property or liberty interest, the Court must first assess whether Plaintiff adequately alleged such an interest.
The Fourteenth Amendment protection against deprivation of liberty includes the right of persons to engage in any of the common occupations of life. Hyland v. Wonder, 972 F.2d 1129, 1141 (9th Cir. 1992). If, when terminating an employee, the government engages in conduct “that so severely stigmatize[s] the employee that she cannot avail herself of other employment opportunities, a claim for deprivation of liberty will stand.” Id. (quoting Board of Regents of State Colleges v. Roth, 408 U.S. 564, 573-74 (1972). Defamation by a state official, however, must “occur in the course of the termination of the employment.” Paul v. Davis, 424 U.S. 693, 710 (1976).
The stigma must be severe and “genuinely debilitating, ” foreclosing an employee's freedom to take advantage of other employment opportunities. Hyland, 972 F.2d at 1141. The charges against the employee must amount to accusations of moral turpitude-such as dishonesty or immorality-to trigger constitutional protection. Id. at 1142. However, “injury to reputation alone is not sufficient to establish a deprivation of a liberty interest protected by the Constitution.” Ulrich v. City & Cty. of San Francisco, 308 F.3d 968, 982 (9th Cir. 2002) (citation omitted). Rather, courts apply the “stigma-plus” test when determining whether a plaintiff has established a claim for deprivation of liberty based on governmental defamation. Id. To prevail on such a claim under the “stigma-plus” test, a “plaintiff must show (1) public disclosure of a stigmatizing statement by the government, the accuracy of which is contested; plus (2) the denial of some more tangible interest such as employment, or the alteration of a right or status recognized by state law.” Green v. Transportation Sec. Admin., 351 F.Supp.2d 1119, 1129 (W.D. Wash. 2005) (emphasis added). Where these elements exist, the plaintiff is “entitled to notice and a hearing to clear his name”-i.e., a name-clearing hearing. Bollow v. Federal Reserve Bank, 650 F.2d 1093, 1100 (9th Cir. 1981).
The F&R thoroughly examined the incidents that Plaintiff alleged gave rise to a Due Process claim as they related specifically to Defendants Martin, Robinson, and Smith and concluded Plaintiff's claim should be dismissed because:
Ewing's due process claim should be dismissed as to all defendants because: (1) his alleged loss of liberty interest is based on events that do not relate to his termination; (2) Ewing fails to adequately allege that the Defendants' statements rise to the level of stigmatizing; and (3) even if Ewing had adequately alleged that the government publicly stigmatized him during the course of terminating him, Ewing failed to adequately allege facts showing that he has suffered the loss of other employment opportunities as a result of publicly-disseminated, stigmatizing statements made by Defendants. By failing to allege facts supporting that Defendants publicly disclosed stigmatizing statements made in connection with his termination, and that those statements subsequently prevented him from finding employment post-termination, Ewing fails to articulate a protected liberty interest and the motion to dismiss should be granted without prejudice as to all defendants.See Ewing 1, 2020 WL 1845814, at *9-11 (numbering altered).
Specifically, regarding Defendants Martin and Robinson the F&R explained:
First, from Ewing's allegations it is unclear what false information Martin gave Robinson, or when he did so. Ewing makes only a conclusory statement accusing Martin of making false statements to Robinson about him. Thus, the Court cannot determine if the statements were stigmatizing, or whether they occurred in the course of his termination or instead after Ewing was terminated. Ewing also failed to allege that he has been unable to garner employment as a result of the statements. Even had Ewing plausibly alleged that Martin deprived Ewing of a protected liberty interest in his reputation through publicly disseminating stigmatizing statements about Ewing in the course of his termination, and that Ewing had suffered unemployability as a result, Ewing still fails to allege sufficient facts showing Martin deprived him of a pre-termination hearing as required by due process. And, in fact, Defendants allege facts supporting that Martin did offer Ewing a pretermination hearing. Thus, Ewing fails to allege deprivation of a protected liberty interest and his claim against Martin should be dismissed without prejudice.
Ewing I, 2020 WL 1845814, at *9 (citations omitted). And regarding Smith, the F&R concluded: Ewing alleges that the pamphlet Smith handed out accuses him of dishonest conduct and illegal activities. First, Ewing's name does not appear in the pamphlet, which refers to “former employees.” During oral argument, Ewing argued that Toledo is a small town, and thus it would be obvious to the public as to whom the statements referred. However, the statements do not imply that the former employees' acts were illegal, or otherwise so stigmatize Ewing as to prevent further employment. Some of the arguably most insulting statements in the pamphlet are “Three former Toledo city employees want Toledo's City Council to fire City Manager, Craig Martin. Their reason? He held them accountable for their unacceptable behavior and practices, ” and “[T]hese former employees...have rallied a group of angry supporters through malicious name calling, unsubstantiated allegations, and misinformation on social media, on their recall petitions, and to the press.” Id. The Court finds that it is possible for citizens to conclude Ewing was one of the three former employees, and the statements are critical of those employees; however, the Court does not find that as a matter of law the statements are stigmatizing. The published statements do not imply dishonest or illegal actions by the employees. The statements do not support Ewing's allegations that Smith labeled Ewing's actions illegal or dishonest. Moreover, nowhere in his Complaint does Ewing allege he subsequently suffered an inability to find work as a result of Smith's statements.Ewing I, 2020 WL 1845814, at *10 (citations omitted).
The SAC fails to cure the specific deficiencies identified in the F&R. Instead, Plaintiff's opposition to Defendants motion asserts that “[t]he issue raised by Plaintiff's 14th Amendment Liberty claim is that he was not given an opportunity for a name-clearing hearing, as required.” Pl.'s Opp'n 12. The SAC does allege that Defendants “could have accorded [Plaintiff] an impartial name-clearing hearing” and that he was not afforded such a hearing. SAC ¶¶ 58-59. However, assuming without deciding that Plaintiff met the requisite standard for such a nameclearing hearing, the SAC still fails to establish that Plaintiff suffered the loss of some “tangible interest such as employment, or the alteration of a right or status recognized by state law, ” which is a necessary element of a “stigma-plus” test. Green, 351 F.Supp.2d at 1129. In other words, Plaintiff has not “adequately allege[d] facts showing that he has suffered the loss of other employment opportunities as a result of publicly-disseminated, stigmatizing statements made by Defendants” as specifically identified in the F&R. Ewing I, 2020 WL 1845814, at *10.
Because it may be possible to cure this deficiency through amendment, Plaintiff should be given one final attempt to amend his complaint to address the issues thoroughly discussed in this F&R and Ewing I, if possible.
IV. State Law Whistleblower Retaliation
Finally, the SAC alleges a whistleblower retaliation claim under multiple Oregon statutes against the City of Toledo as well as Defendants Smith and Robinson. SAC ¶¶ 77-85. Defendants again move to dismiss. Defs.' Mot. 15-23, ECF No. 53.
Before analyzing the whistleblower claims against specific Defendants, the Court must first address Defendants' threshold argument that the City is the only proper Defendant for these claims. Or. Rev. Stat. (“ORS”) § 30.265 provides in relevant part:
If an action is filed against an officer, employee or agent of a public body, and the plaintiff alleges damages in an amount equal to or less than the damages allowed under [the limitations on statutory liability in ORS §§ 30.271, 30.272, 30.273], the court upon motion shall substitute the public body as the defendant.
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(4) If an action under [the OTCA] alleges damages in an amount greater than the damages allowed under [the limitations on statutory liability], the action may be brought and maintained against an officer, employee or agent of a public body, whether or not the public body is also named as a defendant[.]ORS § 30.265(3)-(4) (emphasis added). Defendants assert that because Plaintiff's complaint does not include a precise dollar figure amount in damages, this Court is required to substitute the City for the individual Defendants. Defs.' Mot. 14-15. The Court disagrees.
The SAC specifically alleges that, “[t]he amount of economic and non-economic damages are expected to exceed the applicable limits set forth in ORS 30.272.” SAC ¶ 8. However, as courts in this district have explained when addressing substantially similar substitution arguments under the OTCA:
Plaintiffs cannot leave their damages amount a mystery forever. In order to maintain their suit against individual defendants, Plaintiffs will eventually have to allege damages that exceed the applicable cap in accordance with ORS § 30.265(4). But, where the amount of damages has not yet been specified, I agree with Judge You and DENY Defendants' request for substitution of parties.Achcar-Winkels v. Lake Oswego Sch. Dist., 2017 WL 2291338, at *10 (D. Or. May 25, 2017) (capitalization in original); see also McLean v. Pine Eagle Sch. Dist., No. 61, 194 F.Supp. 3D 1102, 1123 (D. Or. 2016) (“Because Plaintiff does not ‘allege[ ] damages in an amount equal to or less than' the statutory damage limit, Defendants cannot rely on [ORS § 30.265(3)] to support their motion to substitute Pine Eagle for the individual school district-affiliated Defendants.”) (bracketing in original; citation omitted). Accordingly, Plaintiff may maintain this action against the City and individual Defendants.
A. ORS § 659A.030(1)(f)-Analytical Framework
ORS § 659A.030(1)(f) makes it an unlawful employment practice:
For any person to discharge, expel or otherwise discriminate against any other person because that other person has opposed any unlawful practice, or because that other person has filed a complaint, testified or assisted in any proceeding under this chapter or has attempted to do so.
The statute “reflects the intention . . . of promoting unfettered access to remedial statutory mechanisms by prohibiting employers” from treating employees adversely when an employee engages in a “broad range of protected activities.” Portland State U. Ch. of Amer. Ass'n of U. Profs. v. Portland State U., 352 Or. 697, 712-13 (2012) (en banc).
To establish a prima facie claim under the statute, a plaintiff must allege they: (1) engaged in protected activity, such as filing a complaint regarding violations of law or otherwise opposing an unlawful practice; (2) was subjected to an adverse employment action; and (3) the plaintiff's statutorily protected activity was a substantial factor in the employer's adverse employment. Sereno-Morales v. Cascade Food Inc., 819 F.Supp.2d 1148, 1153 (D. Or. 2011); see also Portland State U. Ch. of Amer. Ass'n of U. Profs., 352 Or. at 712; Medina v. State, 278 Or.App. 579, 588 (2016).
Retaliation claims under this statute are premised on the plaintiff opposing any unlawful practice, or filing complaints, testifying, or assisting in proceedings. Sereno-Morales, 819 F.Supp.2d at 1154. In Portland State U. Ch. of Amer. Ass'n of U. Profs., the Court found that filing complaints with regulatory agencies was a protected activity. Id. at 717. And, “‘[o]pposition based on the employee's ‘reasonable belief' that the employer has engaged in an unlawful employment practice' suffices to show that the employee engaged in protected activity.” Lindsey v. Clatskanie People's Utility Dist., 140 F.Supp.3d 1077, 1086-87 (D. Or. 2015) (quoting Equal Emp. Opportunity Comm'n v. Crown Zellerbach Corp., 720 F.2d 1008, 1013 (9th Cir. 1983) (citation omitted)); see also Moyo v. Gomez, 32 F.3d 1382, 1385 (9th Cir. 1994) amended 40 F.3d 982 (9th Cir. 1994) (“An erroneous belief that an employer engaged in an unlawful employment practice is reasonable . . . if premised on a mistake made in good faith.”) (emphasis in original). But “in the Ninth Circuit, an employee's statement does not constitute protected activity unless it refers to some practice by the employer that is allegedly unlawful.” Sereno-Morales, 819 F.Supp.2d at 1153 (quotation altered).
For the employee's protected activity to be a substantial factor in the employer taking an adverse employment action against the employee, the employer's wrongful purpose must be a factor that makes a difference in the decision to take the adverse action against the employee. Bahri v. Home Depot USA, Inc., 242 F.Supp.2d 922, 953 (D. Or. 2002) (citing Estes v. Lewis and Clark College, 152 Or.App. 372, 381 (1998)).
1. Claim Against Martin
The F&R previously denied Defendant Martin's motion to dismiss this claim specifically as to Plaintiff's allegation relating to opposing Defendant Martin's budget proposals:
Ewing's allegations are sufficient to show that he opposed allegedly unlawful conduct by Martin. First, Ewing complained to Martin that Martin was failing to meet the legal requirements imposed upon him in his role as budget officer when Martin failed to provide accurate budget information. By alleging that Martin failed to meet legal criteria imposed upon him by state statute in his role as budget officer, Ewing successfully meets the first requirement of claim.
Ewing also successfully alleges that he suffered an adverse employment action when he alleges that Martin terminated him, thus fulfilling the second prong of the statute. Lastly, in considering whether Ewing's protected activity of opposing Martin's allegedly unlawful conduct was a substantial factor in causing his termination, the Court draws all inferences in favor of the non-movant and accepts all allegations as true. In doing so, the Court should conclude that Ewing has made the minimum allegations necessary to plausibly state a claim that his opposition to Martin about the budget was a substantial factor in his termination.Ewing I, 2020 WL 1845814, at *13. The Court expressly adopts the reasoning it articulated in the F&R and Defendants' motion should again be denied as to Defendant Martin.
2. Claim Against Smith
The F&R granted Defendants' motion to dismiss in relation to Defendants Smith and Robinson. Specifically, with regards to Defendant Smith, the F&R concluded that Plaintiff's statement at a city council meeting criticizing her budgetary decisions with regards to the fire department was not the type of disclosure contemplated by the statute:
Ewing fails to allege that his statement to Smith is a protected disclosure as envisioned by the statute. He did not file a report or other grievance; rather, Ewing simply complained in the course of his employment that he did not agree with Smith's decision to not fund an air compressor for the fire department as Ewing wished.Ewing I, 2020 WL 1845814, at *11.
The SAC again fails to address the specific deficiencies outlined in the F&R. Regarding Defendant Smith, Plaintiff fails to explain how his statement to Smith taking issue with her budgetary proposals is the type of disclosure the ORS § 659A.030(1)(f) was meant to protect. Moreover, as Plaintiff expressly notes, “[i]t is, concededly, difficult to draw a causal connection between Plaintiff's City Council appearance in June 2017, and his termination a year later.” Pl.'s Opp'n 17. As such, Defendant's motion should be granted on this claim in Defendant Smith's favor. Because Plaintiff did not make the type of disclosure the statute seeks to protect, the claim against Smith should be dismissed with prejudice because amendment would be futile.
3. Claim Against Robinson
The F&R also granted Defendants' motion to dismiss with regard to Defendant Robinson, explaining:
Beyond bare assertions of liability, Ewing fails to allege facts that allow the Court to draw inferences that Robinson aided or abetted any Defendant in retaliating against Ewing for engaging in protected activity of disclosing any defendants' unlawful practice. Actions alleged to have been taken by Robinson occurred only after Ewing was terminated; Ewing alleges that Robinson represents the City as its attorney, and that after his termination, and in bad faith, Robinson reported allegedly illegal conduct by Ewing to the Department of Justice. Ewing also alleges that Robinson accused Ewing of illegal actions at a June 20, 2018 City Council meeting. Because Ewing fails to allege how Robinson's actions contributed to his adverse employment action, he fails to make a prima facie case against Robinson under this statute, and the motion to dismiss should be granted without prejudice. To the extent that facts exist showing Robinson acted prior to Ewing's termination to aid and abet another Defendant in retaliating against Ewing, Ewing should be given leave to amend his complaint.Ewing I, 2020 WL 1845814, at *14.
The SAC includes the following additional language relating to Defendant Robinson:
49. During the June 20, 2018, City Council meeting, one week after Ewing's termination, in retaliation for Ewing's objections to Martin's mismanagement of the City and his handling of personnel matters, the expenditure of taxpayer money and the prioritization of City funding, and Ewing's exercise of his free speech rights to promote transparency in the budget process by disclosing the city's budget information to an expert for review, and to instigate the former Finance Director's review and report to the City Council about the budget deficiencies as described above, Robinson spoke, accusing Ewing of illegal release of “non-disclosable public records” and “tramp[ling] on the rights of other taxpayers in the process, ” insinuating that Ewing engaged in illegal activity, knowing the statements to have been false, or with reckless disregard for whether they were true or false, in that they were not supported in fact or law.
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51. On or about June 22, 2018, twelve days after Ewing's termination, defendant Robinson, on behalf of the defendant City, and in retaliation for Ewing's objections to Martin's mismanagement of the City and his handling of personnel matters, the expenditure of taxpayer money and the prioritization of City funding, and Ewing's exercise of his free speech rights to promote transparency in the budget process by disclosing the city's budget information to an expert for review, and to instigate the former Finance Director's review and report to the City Council about the budget deficiencies as described above, requested the Oregon Department of Justice (“DOJ”) to investigate Ewing for “criminal conduct perpetrated against the City, ” accusing Ewing of the following:
a) committing a computer crime pursuant to ORS 164.377;
b) tampering with public records pursuant to ORS 162.305;
c) “attempting to execute a scheme to defraud the City or to cover up financial misdeeds that [he] perpetrated;”
d) “theft of data.”
Plaintiff urges the Court to consider the above post-termination conduct in relation to his retaliation claim. Pl.'s Opp'n 16-18. Specifically, Plaintiff relies on the Oregon Supreme Court's decision in McLaughlin v. Wilson, which held that post-employment allegations of retaliation that “have a clear nexus to [a] plaintiff's prior employment” can be actionable under ORS § 659A.030(1)(f) in some circumstances. 365 Or. 535, 554 (2019). There, the plaintiff, who worked as a medical assistant, was subjected to sexual harassment by a surgeon, who also served as plaintiff's reference for a graduate MBA program to which she applied. McLaughlin, 365 Or. at 538. In response to the plaintiff filing a sexual harassment complaint after leaving employment in the clinic, the surgeon “reached out to the director of admissions to the MBA program and qualified that recommendation by making false statements about plaintiff's actions with her last two employers.” Id. at 554.
Ultimately, the McLaughlin court held “that ORS 659A.030(1)(f) is not strictly limited to acts inside an employment relationship and at least extends to retaliation with a nexus to past or future employment, ” reasoning that the “acts of retaliation alleged [had] a clear nexus to plaintiff's prior employment, because defendant's statements were made as plaintiff's former supervisor and pertained to her actions at” the clinic. 365 Or. at 553-54. The Court finds Defendants attempt to distinguish McLaughlin unavailing and concludes that, taking the allegations in the SAC as true as the Court is required, Plaintiff has sufficiently plead facts that plausibly support a retaliation claim under the statute. As such, Defendants' motion should be denied as to Robinson.
Before issuing the F&R, the Court ordered supplemental briefing on this claim. See ECF Nos. 34, 36. The Court recommended, and the district court adopted, denying Defendants' motion to dismiss. Ewing I, 2020 WL 1845814, at *14 (“Because this Court finds that the statute does apply to public employers, Defendants' motion to dismiss this claim should be denied.”). Accordingly, the Court expressly adopts its prior reasoning and Defendants' motion should again be denied as to Plaintiff's ORS § 659A.199 claims.
C. ORS § 659A.203-Analytical Framework
Under Oregon Revised Statute § 659A.203, it is unlawful for any public or nonprofit employer to:
(b) Prohibit any employee from disclosing, or take or threaten to take disciplinary action against an employee for the disclosure of any information that the employee reasonably believes is evidence of:
(A) A violation of any federal, state or local law, rule or regulation by the public or nonprofit employer;
(B) Mismanagement, gross waste of funds or abuse of authority or substantial and specific danger to public health and safety resulting from action of the public or nonprofit employer;
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(d) Discourage, restrain, dissuade, coerce, prevent or otherwise interfere with disclosure or discussions described in this section.ORS § 659A.203.
To establish a prima facie case under the statute, a plaintiff must show they: (1) engaged in a protected activity (i.e., made a qualifying disclosure or report); (2) suffered an adverse employment decision; and (3) there was a causal link between the protected activity and the adverse employment decision. Brunozzi v. Cable Communications, Inc., 851 F.3d 990 (9th Cir. 2017).
Protected disclosures or reports may be made to either internal or external authorities. Bjurstrom v. Oregon Lottery, 202 Or.App. 162, 169, 172 (2005); Bieker v. City of Portland, Case No. 3:16-cv-00215-BR, 2016 WL 3769753, at *5 (D. Or. July 14, 2016). Disclosures of employer misconduct are analyzed under an objective reasonableness standard. Hall v. State, 274 Or.App. 445, 453 (2015); Folz v. State, 287 Or.App. 667, 673 (2017).
The information disclosed must not be already publicly known or publicly available information. See Clarke v. Multnomah County, 303 Fed.Appx. 512 (9th Cir. 2008); Bieker, 2016 WL 3769753, at *5. In other words, to qualify for whistleblower protection, a disclosure or report must reveal to either an internal or external department, agency, or other authority, previously unknown information about employer misconduct.
To show a causal link between the adverse employment decision and the protected activity, a plaintiff must show that his protected activity was a substantial motivating factor in the adverse employment decision, and that “but for” his protected activity, the adverse action would not have been taken. See Sandberg v. City of N. Plains, No. 10-cv-1273-HZ, 2012 WL 602434, at *7 (D. Or. Feb. 22, 2012); Whitley v. City of Portland, 654 F.Supp.2d 1194, 1223 (D. Or. 2009).
1. Claim against Smith
Regarding Defendant Smith, the F&R found that Plaintiff's report to Smith qualified as a protective activity; however, dismissal was appropriate because he failed:
to allege a causal link between his protected activity, the report to Smith, and his adverse employment action. His report to Smith occurred on July 11, 2017, and he was terminated almost a year later. The time from his report to the time of his adverse employment action is too attenuated to be successfully alleged as a substantial factor in his termination. Further, Ewing does not plead factual allegations to support that Smith terminated him. This claim should be dismissed against Smith, without prejudice.Ewing I, 2020 WL 1845814, at *15. Plaintiff's opposition fails to address the causal link deficiency identified above. Accordingly, Defendants' motion to dismiss relating to Smith on this claim should be granted. Because Plaintiff cannot establish a causal link between his alleged protected activity and some adverse employment action, the claim against Smith should be dismissed with prejudice because amendment would be futile.
2. Claim against Robinson
The F&R also concluded that the claim against Defendant Robinson was appropriate for dismissal because none of “the underlying [ORS § 659A.203] claims against the other Defendants should not survive the motion to dismiss, the aiding and abetting claim should be dismissed against” Robinson. Ewing I, 2020 WL 1845814, at *16. That same logic applies with equal force here because none of Plaintiff's ORS § 659A.203 claims pass muster. Defendants' motion should be granted and the claim against Robinson should be dismissed.
Plaintiff seems to argue that Defendant Martin violated ORS § 659A.203, Pl.'s Opp'n 20; however, that claim was “dismissed with prejudice because amendment would be futile.” Ewing I, 2020 WL 1845814, at *16.
RECOMMENDATION
The Court recommends that Defendants' Motion to Dismiss (ECF No. 53) be GRANTED IN PART and DENIED IN PART. The Court summarizes the recommended disposition for each claim as follows:
I. 42 U.S.C. § 1983 First Amendment Claim
| Defendant | Martin: | DENIED |
| Robinson: | DENIED in part and GRANTED in part as to the events that occurred after Plaintiff's termination | |
| Smith: | DENIED in part and GRANTED in part as to the events that occurred after Plaintiff's termination |
II. 42 U.S.C. § 1983 Due Process-Liberty Interest Claim
| Defendant | Martin: | GRANTED without prejudice |
| Robinson: | GRANTED without prejudice | |
| Smith: | GRANTED without prejudice |
III. State Law Whistleblower Retaliation Claims
| Defendant | City: | DENIED |
| Martin: | DENIED | |
| Smith: | GRANTED with prejudice | |
| Robinson: | DENIED |
B. § 659A.199
| Defendant | Smith: | DENIED |
| Martin: | DENIED | |
| Robinson: | DENIED |
C. § 659A.203
| Defendant | Smith: | GRANTED with prejudice |
| Robinson: | GRANTED without prejudice |
The Court should permit Plaintiff thirty (30) days to file a final Third Amended Complaint in which he may attempt to cure, if possible, the deficiencies outlined herein.
This recommendation is not an order that is immediately appealable to the Ninth Circuit Court of Appeals. Any notice of appeal pursuant to Federal Rule of Appellate Procedure 4(a)(1) should not be filed until entry of the district court's judgment or appealable order.
The Findings and Recommendation will be referred to a district judge. Objections to this Findings and Recommendation, if any, are due fourteen (14) days from today's date. See Fed.R.Civ.P. 72. Failure to file objections within the specified time may waive the right to appeal the District Court's order. Martinez v. Ylst, 951 F.2d 1153 (9th Cir. 1991).