Opinion
Civil Action No. SA-05-CA-762-FB.
November 16, 2005
ORDER REGARDING MEMORANDUM AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE
Before the Court is the Memorandum and Recommendation (docket no. 13) of the United States Magistrate Judge, plaintiff's amended written objections (docket no. 17) thereto, defendant's response (docket no. 22), plaintiff's reply (docket no. 24), and defendant's supplemental response (docket no. 25) to plaintiff's amended objections.
Where no party has objected to a Magistrate Judge's Memorandum and Recommendation, the Court need not conduct a de novo review of the Memorandum and Recommendation. See 28 U.S.C. § 636(b)(1) ("A judge of the court shall make a de novo determination of those portions of the report or specified proposed findings and recommendations to which objection is made."). In such cases, the Court need only review the Memorandum and Recommendation and determine whether it is clearly erroneous or contrary to law.United States v. Wilson, 864 F.2d 1219, 1221 (5th Cir.),cert. denied, 492 U.S. 918 (1989).
On the other hand, any Memorandum and Recommendation to which objection is made requires de novo review by the Court. Such a review means that the Court will examine the entire record, and will make an independent assessment of the law. The Court need not, however, conduct a de novo review when the objections are frivolous, conclusive, or general in nature. Battle v. United States Parole Comm'n, 834 F.2d 419, 421 (5th Cir. 1987).
The Court has thoroughly analyzed the parties' submissions in light of the entire record. As required by Title 28 U.S.C. § 636(b)(1)(c), the Court has conducted an independent review of the entire record in this cause and has conducted a de novo review with respect to those matters raised by the objections. After due consideration, the Court concludes plaintiff's objections lack merit.
Before the Court is the motion to dismiss for failure to state a claim filed by the Alamo Community College District ("the District") pursuant to rule 12(b)(6) of the Federal Rules of Civil Procedure. FED. R. CIV. P. 12(b)(6). The Magistrate Judge recommends the motion to dismiss be granted in part and denied in part such that plaintiff's only remaining cause of action is one for breach of the underlying settlement agreement. The Magistrate Judge further recommends, while plaintiff has stated a claim for breach of the underlying settlement agreement, this remaining cause of action should be dismissed for lack of jurisdiction.
As set forth in the Memorandum and Recommendation, Dr. William Miller was a tenured professor of chemistry with the Alamo Community College District ("the District" or "ACCD"), employed since 1965. The District terminated Dr. Miller's employment in 2001 based upon its investigation of complaints of sexual harassment against him. Dr. Miller brought suit against the District in federal court based on allegations he was denied due process in violation of 42 U.S.C. § 1983 when his employment was terminated. The action, styled Dr. William Miller v. Alamo Community College District, Civil Action No. SA-01-CA-545-FB, was randomly assigned to the docket of this Court. After four years, the parties reached a mutual settlement agreement. The settlement agreement provides in part:
(1) The District would pay Dr. Miller $150,000 for the payment of his attorney's fees;
(2) Dr. Miller would receive a hearing before a Faculty Hearing Panel to determine whether good cause exists for his termination pursuant to the District's policy applicable to the termination of tenured faculty members;
(3) The decision by the Faculty Hearing Panel would be reviewed by the Board of Trustees for a limited determination of whether substantial evidence supported its conclusion; and
(4) Dr. Miller would release the District "for any and all claims that he has or may have in the future arising from the termination of his employment with [the District] for alleged acts of sexual harassment other than he reserves the right to sue for a breach of the terms of this Agreement."
Following execution of the settlement agreement and dismissal of the previous action, a Faculty Hearing Panel convened and ultimately determined Dr. Miller engaged in sexual harassment but, while his actions were reprehensible, they did not rise to the level of "moral turpitude," a finding necessary to support his termination pursuant to the District's policy. For this reason, the Faculty Hearing Panel concluded Dr. Miller was terminated without good cause, and he should be reinstated. The panel's decision was reviewed by the Board of Trustees. The trustees ultimately overruled the panel's decision and concluded the District had good cause to terminate Dr. Miller based upon his acts of sexual harassment, pursuant to the District's policy which applies to allegations of sexual harassment against any District employee.
Dr. Miller then filed this action alleging the Board of Trustee's decision was arbitrary and capricious and constituted deprivations of his civil rights under 42 U.S.C. § 1983 including a constitutional taking of his property rights and a deprivation of procedural due process and substantive due process rights, violations of similar pendent state law claims under the Texas Constitution, breach of his employment contract, and breach of the parties' settlement agreement. The District moved to dismiss the action for failure to state a claim upon which relief may be granted. Specifically, the District argued it is entitled to dismissal of this action because it is apparent from Dr. Miller's complaint all of the asserted causes of action are based upon the alleged wrongful termination of his employment and he waived his right to assert such causes of action in the settlement agreement. Dr. Miller maintained he is entitled to assert all causes of action alleged and none are subject to dismissal regardless of the release of liability contained in the settlement agreement.
The Magistrate Judge found "the determinant issue of this motion to dismiss is whether the individual causes of action asserted in the Original Complaint arise from Dr. Miller's ultimate termination of employment or from a breach of the terms of the Settlement Agreement." In the Memorandum and Recommendation, he found:
The specific portions of the Settlement Agreement pertinent to this determinant issue on all of the asserted causes of action are as follows. First, in Paragraph 7, Dr. Miller released [the District] "for any and all claims that he has or may have in the future arising from the termination of his employment with [the District] for alleged acts of sexual harassment other than he reserves the right to sue for breach of the terms of this Agreement." Next, Paragraph 4 provides the Board of Trustees:
Will review the determination and findings of the Panel pursuant to the substantial evidence rule . . . and Board Policy DMB (Local); the Board will be bound by such Panel determination if supported by substantial evidence; the parties agree that the Board will be advised by and bound by the determination of retired Texas district judge, Judge James Meyers, whether there is substantial evidence to support the Panel determination.
Based upon an analysis under this standard of review, the Magistrate Judge reviewed Dr. Miller's complaint to determine whether each cause of action arose from Dr. Miller's ultimate termination of employment or from a breach of the terms of the settlement agreement. If the claim arose from Dr. Miller's ultimate termination, the Magistrate Judge found Dr. Miller had failed to state a claim upon which relief can be granted and accordingly recommends the motion to dismiss be granted. Conversely, if the claim arose from a breach of the terms of the settlement agreement, the Magistrate Judge found Dr. Miller had stated a claim upon which can be granted. He therefore recommends the motion to dismiss be denied.
As noted in the Memorandum and Recommendation, Dr. Miller in his Original Complaint alleges he was deprived of liberty and property interests without due process purportedly in violation of 42 U.S.C. § 1983 and the Texas Constitution. Both procedural and substantive due process violations are alleged. Upon review of the complaint, the Magistrate Judge found it apparent from the face of this pleading that these allegations arise from Dr. Miller's termination of employment, not from any alleged breach of the parties' settlement agreement. He therefore recommends the District's motion to dismiss plaintiff's 42 U.S.C. § 1983 and Texas Constitution causes of action for failure to state a claim be granted.
Dr. Miller also alleges the District's actions constituted a breach of their employment contract. Specifically, he argues the District terminated him without good cause and failed to apply proper scrutiny for termination of a tenured professor as provided in the employment contract. The Magistrate Judge found "this action is obviously one arising from [the District's] termination of Dr. Miller's employment, not from a breach of the terms of the parties' Settlement Agreement." Because Dr. Miller "released his right to bring any action for breach of an employment contract by reserving only the right to sue for a breach of the terms of the Settlement Agreement," the Magistrate Judge recommends the District's motion to dismiss plaintiff's breach of employment cause of action for failure to state a claim be granted.
Dr. Miller additionally alleges the District's actions constituted a breach of the settlement agreement because it failed to properly apply the District's Policy DMB (Local) as anticipated by the specific terms of the settlement agreement. Dr. Miller alleges the Board of Trustees arrived at an arbitrary and capricious determination without consideration of the agreed upon "substantial evidence" review or of Judge Meyers' determination. The Magistrate Judge found the undisputed facts and evidence attached to Dr. Miller's Original Complaint show Dr. Miller was provided a hearing before the Faculty Hearing Panel and this decision was reviewed by the Board of Trustees in accordance with the terms of the settlement agreement. However, the Magistrate Judge continued, the Original Complaint contains nothing from which it may be determined whether the Board of Trustees based its decision upon the substantial evidence rule or violation of the District's Policy DMB (Local), whether it considered the determination of Judge James Meyers, or what was the determination of Judge Meyers. Due to this deficiency, and accepting as true Dr. Miller's factual allegations and drawing all reasonable inferences in his favor, the Magistrate Judge concluded "the face of the complaint does not show there is no doubt that Dr. Miller can prove no set of facts in support of his claim for breach of the Settlement Agreement which would entitled him to relief." Accordingly, the Magistrate Judge found "Dr. Miller has stated a claim for breach of the parties' Settlement agreement upon which relief may be granted." He therefore recommends the District's motion to dismiss plaintiff's breach of settlement cause of action for failure to state a claim be denied.
Interestingly, neither side informed the Court whether Judge Meyers participated or not.
Because the Magistrate Judge recommends all federal question causes of action asserted in the Original Complaint be dismissed, he also addressed in the Memorandum and Recommendation the issue of whether the Court should retain the state law cause of action for breach of the underlying settlement agreement. Finding no independent basis for federal jurisdiction over the settlement agreement, the Magistrate Judge recommends Dr. Miller's complaint be dismissed for lack of subject matter jurisdiction. See Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 381-82 (1994) (absent some independent basis for federal jurisdiction, "enforcement of a settlement agreement is for state courts").
Dr. Miller filed written objections to the Memorandum and Recommendation. He does not challenge the Magistrate Judge's conclusion that he has stated a breach of settlement cause of action. He does argue, however, that he has stated a claim for violations of his constitutional federal rights under 42 U.S.C. § 1983 and, therefore, independent federal jurisdiction exists to retain his breach of settlement cause of action. The District filed responsive briefing arguing the federal question causes of action Dr. Miller alleges (deprivation of civil rights, constitutional taking, deprivation of procedural due process and deprivation of substantive due process) arise from the termination of his employment, which Dr. Miller released in the settlement agreement. Accordingly, the District contends the Magistrate Judge correctly concludes that Dr. Miller is not entitled to raise a 42 U.S.C. § 1983 cause of action in this second, post-settlement lawsuit.
Dr. Miller argues throughout his objections that the settlement agreement created a property interest in his continued employment protected by the United States Constitution. The cases cited by Dr. Miller discuss a protected interest to the continued right of future employment which had or had not been gained by employees who brought suit based on their alleged wrongful terminations. If the plaintiff possessed such a property interest, he or she was entitled to certain procedural due protections. In these cases, the former employees brought suit for lost future wages to which they would have been entitled had they attained such a property interest. See e.g., Board of Regents v. Roth, 408 U.S. 564, 569 (1972) (determining whether an untenured professor had attained a property interest in his continued employment); Perry v. Sindermann, 408 U.S. 593, 601-02 (1972) (determining whether a college professor had property interest in his continued employment after his contract with college was not renewed);Muncy v. City of Dallas, 335 F.3d 394, 398 (5th Cir. 2003) (determining whether plaintiffs had property interest in continuing their employment at their ranks following demotion).
Unlike Dr. Miller, the plaintiffs in the cited cases had not released the college or limited the teacher's cause of action to breach of a settlement agreement contract. As discussed in the Memorandum and Recommendation, important to this case is the settlement provision wherein Dr. Miller released any and all claims he "may have in the future" which arise from the termination of his employment with the District. This provision anticipated any cause of action such as this, in which Dr. Miller might attempt to recover for his perceived wrongful termination after progression through the agreed-upon hearing and review process; the only allowed cause of action not released by the settlement is one for breach of the settlement agreement. As the Magistrate Judge reasoned, Dr. Miller and the District, upon entering into the settlement agreement specifically preserved and limited any future causes of action arising from the termination of Dr. Miller's employment to a breach of the settlement agreement claim. All of the claims Dr. Miller now asserts in this second lawsuit, other than the one for breach of the settlement contract, arise from the termination of his employment at the District and were therefore released when he signed the settlement agreement. Dr. Miller's only allowed cause of action not released by the settlement agreement is that for breach of the settlement agreement; he may not bring suit for any other cause of action which may arise because the District allegedly breached the settlement agreement. In the absence of a similar release, the cases cited are not persuasive authority.
Citing Ferguson v. Thomas, 430 F.2d 852 (5th Cir. 1970), Dr. Miller argues in his objections that the District did not provide him with minimum procedural due process requirements. "As the 5th Circuit has noted, a college may obligate itself by contract to provide due process or even extra procedures in due process, even if the Constitution had not otherwise required such, but at a minimum, the constitutional requirements must be followed." As Dr. Miller implies, the Fifth Circuit Court of Appeals inFerguson discussed the minimum procedural due process requirements a college must provide before termination of an individual with a protectable property interest in employment. Id. Dr. Miller, however, does not refer to the portion of the Ferguson case which states that "[t]he sufficiency of procedures employed in any particular situation must be judged in light of the parties, the subject matter and the circumstances involved." Id. The circumstances in this case are much different than those in Ferguson. Importantly, unlike Dr. Miller, there is no indication that Dr. Ferguson had released the college or limited his cause of action to breach of a settlement agreement contract. Moreover, the procedures employed after Dr. Miller was terminated and pursuant to the settlement agreement afforded Dr. Miller an evidentiary hearing and a review by the Board of Trustees. This, as the District notes, meets the minimum requirements for adequate due process under Ferguson.
Dr. Miller also relies upon Grounds v. Tolar, 856 S.W.2d 417 (Tex. 1993), arguing that "any substantive limitation placed on the right of a public employer to terminate a public employee gives rise to a protectable property interest." In Grounds, the Texas Supreme Court considered the effect the Term Contractual Renewal Act had on a school district's right to terminate a teacher's employment. Id. at 420. The Court did not specifically state that "any substantive limitation" gives rise to a protectable property interest. While the opinion does reason that "[s]ome substantive limitation on the State's discretion is an essential characteristic of a property interest warranting constitutional protection," this statement was made in the context of describing the necessity for the Act, before which school districts could elect not to renew a teacher's contract without providing a reason. Id. at 418 n. 11. Moreover, theGrounds case does not involve a settlement agreement or release. Given these distinctions, this Court declines to find that the cited authorities support Dr. Miller's argument that the settlement agreement was a substantive limitation placed on the District's right to terminate Dr. Miller in violation of his protectable property interest in his continued employment.
Dr. Miller also objects to the Magistrate Judge's conclusion that the settlement agreement specifically precluded him from future causes of action relating to his property rights arising from the termination of his employment except for a breach of the terms of the settlement agreement. Dr. Miller's employment was terminated and his continued right of employment as a tenured faculty member and lost wages, damage to reputation, mental anguish, and procedural rights were the basis for his first suit against the District. The payment of $150,000 and the agreed process for appealing his termination resulted in the settlement agreement. The essence of his first lawsuit was that he, a tenured faculty member, was wrongfully terminated. After four years of litigation, the settlement agreement was entered into whereby hearings would be had to determine the appropriateness of Dr. Miller's termination. The agreement then provided for stipulated damages in the event Dr. Miller's termination was wrongful. As a result of the settlement agreement, any property interest Dr. Miller may have in his continued employment is limited to these lost wages and related damages. The continued interest as a tenured faculty member which he presently argues was addressed, finalized, and dismissed with prejudice in the settlement agreement.
The settlement agreement provided that Dr. Miller would be paid $487,237.57 by defendant in "full and final settlement of his claims" and "thereupon reinstated to his former position as a tenured professor of chemistry at San Antonio College." The agreement also provided that the District would work with Dr. Miller in providing a retirement account and that Dr. Miller would be entitled to have any references to his termination and its surrounding circumstances purged from his personnel records.
This does not mean, however, that Dr. Miller cannot now argue he was terminated without good cause under an improper standard of review. As noted above, the settlement agreement provides that Dr. Miller would receive a hearing before a Faculty Hearing Panel to determine whether good cause exists for his termination pursuant to the District's policy applicable to the termination of tenured faculty members. It also provided that the decision by the Faculty Hearing Panel would be reviewed by the Board of Trustees for a limited determination of whether substantial evidence as advised by retired Judge Meyers supported its conclusion. Thus, any breach of the settlement agreement based upon application of improper scrutiny for the termination of a tenured professor falls within Dr. Miller's cause of action for breach of the settlement agreement.
Dr. Miller also challenges the Magistrate Judge's failure to make clear that Dr. Miller's Original Complaint specifically alleges that Dr. Miller's property interest in the settlement agreement was also taken without due process. It appears to this Court that the Memorandum and Recommendation does make clear the allegations contained in the Original Complaint. In any event, there is no indication Dr. Miller will not receive ample due process should he choose to continue to pursue his allegations that the District breached the settlement agreement. As discussed above, the settlement agreement does not render Dr. Miller remediless, it merely limits his claims to that of breach of the settlement agreement contract. For these reasons, this Court agrees with the Magistrate Judge that Dr. Miller's allegations, with the exception of his breach of settlement cause of action, are subject to dismissal for failure to state a claim upon which relief can be granted.
The Magistrate Judge also recommends Dr. Miller's remaining claim for breach of the settlement agreement be dismissed for lack of subject matter jurisdiction. In Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 381-82 (1994), the Supreme Court of the United States determined that "enforcement of a settlement agreement is for state courts" absent some independent basis for federal jurisdiction. The Magistrate Judge makes a strong argument that there is no basis for federal jurisdiction because the Court did not make the settlement agreement part of the order of dismissal nor did the Court explicitly retain jurisdiction over the case. Alternatively, even if this Court has subject matter jurisdiction, Dr. Miller's federal claims are subject to dismissal and, therefore, this Court declines to exercise supplemental jurisdiction of the remaining state law claim pursuant to 28 U.S.C. § 1367(c)(3). Accordingly, plaintiff's breach of the settlement agreement cause of action shall be dismissed without prejudice to filing in state court.
IT IS THEREFORE ORDERED that the Memorandum and Recommendation (docket no. 13) of the United States Magistrate Judge is ACCEPTED pursuant to 28 U.S.C. § 636(b)(1) such that the defendant's motion to dismiss for failure to state a claim is GRANTED in PART and DENIED in PART such that plaintiff's sole remaining cause of action is for breach of the underlying settlement agreement;
IT IS FURTHER ORDERED that this sole remaining cause of action for breach of the underlying settlement agreement is DISMISSED WITHOUT PREJUDICE to filing in state court.
It is so ORDERED.