Kelly v. Sayreville ( 1997 )

Opinions of the United
1997 Decisions States Court of Appeals
for the Third Circuit
3-5-1997
Kelly v. Sayreville
Precedential or Non-Precedential:
Docket 96-5342
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"Kelly v. Sayreville" (1997). 1997 Decisions. Paper 57.
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UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 96-5342
CHARLES F. KELLY,
Appellant
v.
BOROUGH OF SAYREVILLE, NEW JERSEY;
DOUGLAS A. SPRAGUE, CHIEF OF POLICE OF
THE BOROUGH OF SAYREVILLE
On Appeal from the United States District Court
for the District of New Jersey
(D.C. Civ. No. 94-05460)
Argued February 11, 1997
BEFORE: GREENBERG, COWEN, and MCKEE, Circuit Judges
(Filed: March 5,1997)
Richard J. Kaplow (argued)
53 Elm Street
Westfield, NJ 07090
Attorney for Appellant
Robert T. Clarke (argued)
Daniel P. Murphy
Apruzzese, McDermott, Mastro
& Murphy
25 Independence Boulevard
P.O. Box 112
Liberty Corner, NJ 07938
Attorneys for Appellee
Robert E. Anderson
Public Employment Relations
Commission
CN 429
Trenton, NJ 08625
Attorney for Amicus
1
Curiae Public Employment
Relations Commission
OPINION OF THE COURT
GREENBERG, Circuit Judge.
Charles Kelly, a police officer, appeals in this action
involving his ongoing disputes with the appellees, the
municipality which employs him and its chief of police, from the
district court's order dismissing his complaint brought under 42
U.S.C. § 1983. The district court entered the order on the
grounds that by reason of prior New Jersey administrative
proceedings involving the subject matter of Kelly's current
action, the New Jersey entire controversy doctrine barred this
case and that, in any event, the complaint failed to state a
claim upon which relief may be granted. Kelly v. Borough of
Sayreville, 927 F. Supp. 797 (D.N.J. 1996). Inasmuch as we hold
that the district court properly dismissed the complaint on the
latter ground, we need not consider the entire controversy
ruling, though we note that we have significant reservations
concerning the district court's disposition of that issue.
1. Jurisdiction and Standard of Review
The district court had jurisdiction under 28 U.S.C. §§
1331 and 1343(a)(3), and we have jurisdiction over Kelly's timely
appeal pursuant to 28 U.S.C. § 1291. We exercise plenary review
over the district court's dismissal of Kelly's complaint. See
2
Schrob v. Catterson, 948 F.2d 1402, 1408 (3d Cir. 1991). In
considering this appeal from an order dismissing a complaint for
failure to state a claim upon which relief can be granted, we
accept Kelly's allegations as pleaded as true, and we draw all
reasonable inferences in his favor. See id. at 1405. We can
affirm the dismissal only if it is certain that Kelly cannot
attain relief under any set of facts that he could prove. See
id. at 1408.
2. Background
On November 20, 1992, appellees, the Borough of
Sayreville and its Chief of Police, Douglas Sprague, filed a
formal written preliminary notice of disciplinary action against
Kelly, a Sayreville police officer who serves as the president
and employee representative of the Sayreville Policemen's
Benevolent Association Local No. 98. The disciplinary notice
delineated 12 charges against Kelly and stated that Sayreville
and Sprague were seeking his permanent removal from the police
department. In response, Kelly and the PBA filed an application
for an order to show cause with temporary restraints and an
unfair practice charge with the New Jersey Public Employment
Relations Commission ("PERC") alleging that in bringing the
charges the appellees violated the New Jersey Employer-Employee
Relations Act, N.J. Stat. Ann. § 34:13A-1 et seq. (West 1988),
and infringed Kelly's First Amendment free speech rights.
PERC issued an order to show cause on the application
on January 4, 1993, and a PERC hearing examiner held a hearing on
3
the order to show cause on February 17, 1993. The examiner,
however, did not restrain the prosecution of the disciplinary
proceedings against Kelly because Sayreville agreed to postpone
those proceedings pending the disposition of the PBA unfair
practice charge. A PERC hearing examiner then held hearings on
the unfair practice charge on May 27 and 28, and June 3, 8, and
17, 1993. At these hearings, the PBA requested that PERC order
the withdrawal of the disciplinary proceedings directed toward
Kelly's removal from the police department.
On December 6, 1993, the examiner issued a report and
recommendation finding that Sayreville had violated the New
Jersey Employer-Employee Relations Act. He recommended that PERC
order Sayreville to cease and desist from violating the Act, that
the disciplinary charges against Kelly be withdrawn, and that
Sayreville expunge any references to the charges from his
personnel file. H.E. No. 94-11, at 33-34 (Dec. 6, 1993). On
April 29, 1994, PERC issued its decision and order remanding the
matter to the hearing examiner for clarification of his report
and recommendation. P.E.R.C. No. 94-104 (Apr. 28, 1994). The
examiner then issued a supplemental recommended order on July 22,
1994. H.E. No. 95-5 (July 22, 1994). On May 24, 1995, PERC
issued its final decision, incorporating the hearing examiner's
findings and ordering that the disciplinary proceedings against
Kelly be withdrawn and that Sayreville cease and desist from
discriminating against Kelly on the basis of his actions in the
performance of his duties as PBA president. P.E.R.C. No. 95-97,
at 12 (May 23, 1995). Neither the hearing examiner nor PERC
4
considered Kelly's First Amendment claim on the merits, P.E.R.C.
No. 94-104, at 3, and neither Kelly nor appellees appealed PERC's
decision to the New Jersey courts.
On November 17, 1994, Kelly filed the complaint in this
case in the district court seeking damages, alleging that the
appellees violated 42 U.S.C. § 1983 in their treatment of him.
In particular, Kelly asserted that during his tenure as the PBA
president the appellees subjected him to an unjustified
continuous series of reprimands, disciplinary actions, reprisals,
and job-related actions motivated by Sprague's personal dislike
for and malice toward him. Kelly asserted that the appellees'
actions violated his liberty and property interests without due
process of law. Kelly claimed he therefore suffered substantial
monetary loss, humiliation, damage to his reputation, and
emotional and physical injury. He did not specify, however, the
basis for his claim of monetary loss, and thus he did not claim
that he lost compensation or other employment benefits by reason
of appellees' actions. The district court complaint mirrors the
PERC charges for Kelly acknowledges that "the specific factual
allegations of [his] District Court complaint refer directly and
specifically to the underlying facts and circumstances which were
raised and litigated in the PERC administrative proceeding. . .
.” Br. at 10. The administrative and district court proceedings
differ, however, in that in the court action, unlike in the
administrative proceeding, Kelly alleged a claim for damages for
reputation and psychological injuries.
5
The appellees filed a motion to dismiss which the
district court granted by order of May 10, 1996, holding that
because Kelly could have raised his federal constitutional claims
before PERC, the New Jersey entire controversy doctrine barred
his district court action. Kelly, 927 F. Supp. at 805. The
district court also dismissed the complaint for failure to state
a claim upon which relief could be granted. Id. at 805-06.
Kelly then filed this appeal. As we have indicated, we address
only the second ruling.
3. Discussion
Initially we point out that the district court found
that Kelly had not responded to the motion to dismiss for failure
to state a claim upon which relief could be granted. Kelly, 927
F. Supp. at 806. The court nevertheless decided the motion on
the merits rather than grant it as unopposed. In these
circumstances, we, too, will address the merits of the motion to
dismiss.
In his complaint, Kelly asserted a section 1983 action
based on the alleged violation of his rights under the Fifth,
Sixth, Eighth, and Fourteenth Amendments to the Constitution. He
claimed that the appellees injured him by repeatedly filing
groundless disciplinary charges against him. The district court
held that Kelly could not state a claim for violation of his
Fifth, Sixth, and Eighth Amendment rights. Id. at 805-06. In
arriving at this result, it indicated that Kelly's Fifth
Amendment claim fails because he has not alleged wrongdoing on
6
the part of the federal government, his Sixth Amendment claim
fails because he is not a criminal defendant, and his Eighth
Amendment claim fails because he is not a convicted criminal
defendant subjected to punishment in the context of criminal
proceedings. We will affirm these dispositions summarily because
we agree with the district court that the Sixth and Eighth
Amendments are clearly not applicable here, and Kelly's remaining
claims raise due process of law contentions which in this action
against a municipality and one of its officials we consider under
the Fourteenth Amendment. The district court dismissed the
Fourteenth Amendment claim on the ground that the appellees'
action had not deprived Kelly of any liberty or property
interest, and we will address that disposition at length.
On appeal, Kelly argues that his complaint sufficiently
alleged the constitutional violations of which he complains. He
contends that "[a]ll of the required elements of [his] theory of
injury and resulting harm are adequately set forth in the
complaint." Br. at 31. In his complaint Kelly alleged damage to
his liberty interest in his reputation and his property interest
in his employment. Appellees argue, however, that any reputation
damage Kelly may have suffered due to their filing of
disciplinary charges is not sufficient to support a cause of
action for violation of the due process clause of the Fourteenth
Amendment. They argue further that even if Kelly identified a
right that their actions altered or extinguished, he cannot
establish that his liberty interest in his reputation was
violated by their publication of false information about him.
7
They also contend that they did not injure his property
interests. For these reasons, they argue that the district court
properly dismissed his claim of a Fourteenth Amendment violation.
"To establish a claim under 42 U.S.C. § 1983, [a
plaintiff] must demonstrate a violation of a right secured by the
Constitution and the laws of the United States [and] that the
alleged deprivation was committed by a person acting under color
of state law." Mark v. Borough of Hatboro, 51 F.3d 1137, 1141
(3d Cir.) (citation and internal quotation marks omitted), cert.
denied, 116 S. Ct. 165 (1995). Inasmuch as the appellees
undoubtedly acted under color of state law, our inquiry focuses
on whether they violated Kelly's property or liberty interests.
State law creates the property rights protected by the
Fourteenth Amendment. Clark v. Township of Falls, 890 F.2d 611,
617 (3d Cir. 1989) (looking to Pennsylvania law to determine
whether police officer enjoys a property right in the retention
of his assigned duties). Thus, we must look to New Jersey law to
determine what property interests Kelly enjoys in his employment
as a police officer. Under New Jersey law:
[N]o permanent member or officer of the police
department or force shall be removed from his
office, employment or position for political
reasons or for any cause other than incapacity,
misconduct, or disobedience of rules and
regulations established for the government of the
police department and force, nor shall such member
or officer be suspended, removed, fined or reduced
in rank from or in office, employment, or position
therein, except for just cause as hereinbefore
provided and then only upon a written complaint
setting forth the charge or charges against such
member or officer.
8
N.J. Stat. Ann. § 40A:14-147 (West 1993). Kelly undoubtedly had
a property interest in his position. Furthermore, the appellees
repeatedly filed disciplinary actions against Kelly so that they
intended to interfere with that property interest. Nevertheless,
as Kelly conceded at oral argument before us, they never
suspended, removed, fined, or reduced him in rank, and he
suffered no loss of compensation by reason of these disciplinary
actions. Accordingly, while Kelly's complaint broadly asserts
that he suffered substantial monetary loss, he has clarified his
complaint to indicate that he seeks damages only for the
continued pattern of harassment through the filing of groundless
disciplinary charges, not for any particular adverse employment
action. We hold that in those circumstances he has not alleged a
property loss so that his claim cannot survive the motion to
dismiss.
Kelly cites Richardson v. Felix, 856 F.2d 505 (3d Cir.
1988), and Perez v. Cucci, 725 F. Supp. 209 (D.N.J. 1989), aff'd,
898 F.2d 142 (3d Cir. 1990) (table), in support of his argument
that he has asserted the deprivation of a protected property
right. Although Richardson and Perez support the unquestionably
correct proposition that public employees may enjoy
constitutionally protected property rights in their employment,
Richardson, 856 F.2d at 509; Perez, 725 F. Supp. at 243, these
cases are distinguishable as they involved interference with
employment rights. In Richardson the plaintiff was given the
option of resigning or being terminated, so that the government
impaired his property interest in his continued employment when
9
it deprived him of that interest without prior notice or hearing.
Richardson, 856 F.2d at 505. Similarly, in Perez the plaintiff
was demoted for precluded political reasons and without required
procedural protections. We reiterate that in contrast the
appellees never discharged or demoted Kelly, and he lost no
compensation or other employment benefits by reason of their
actions. Accordingly, the appellees never deprived Kelly of a
property interest in his employment, so he has failed to state a
claim for deprivation of a property interest in violation of the
Fourteenth Amendment.
Kelly also argues that he was deprived of his liberty
interest in his reputation. Yet, as we explained in Clark v.
Township of Falls, "reputation alone is not an interest protected
by the Due Process Clause." Clark, 890 F.2d at 619. Clark
relied on Paul v. Davis, 424 U.S. 693, 96 S. Ct. 1155 (1976),
which held that a plaintiff complaining that his liberty interest
in his reputation has been injured states an actionable claim
only if he has suffered an additional deprivation. Accordingly,
in Clark we held that because the plaintiff, a police lieutenant,
had not demonstrated the deprivation of any protectable right
beyond the injury to his reputation, he could not succeed on his
constitutional claim. Id. at 620. In particular the plaintiff
in Clark, like Kelly, maintained his rank within the police
department. Furthermore, we rejected the plaintiff's claim in
Clark to the extent that he predicated it on an argument that the
defendants' actions diminished his future employment prospects.
In reaching this result we explained that the "possible loss of
10
future employment opportunities is patently insufficient to
satisfy the requirement imposed by Paul that a liberty interest
requires more than mere injury to reputation." Clark, 890 F.2d
at 620. Here, inasmuch as Kelly has not suffered a deprivation
beyond the injury to his reputation, he has not pleaded a valid
claim based on a violation of his liberty interests.
In reaching our result, we point out that in Siegert v.
Gilley, 500 U.S. 226, 233-34, 111 S. Ct. 1789, 1794 (1991), the
Supreme Court relied on Paul v. Davis to hold that there is no
constitutional liberty interest in one's reputation and that a
claim that is essentially a state law defamation claim cannot
constitute a claim for violation of one's federal constitutional
rights. Thus, we must be careful not to equate a state
defamation claim with a cause of action under section 1983
predicated on the Fourteenth Amendment. See also Sturm v. Clark,
835 F.2d 1009, 1012 (1987) ("Absent the alteration or
extinguishment of a more tangible interest, injury to reputation
is actionable only under state defamation law."); Robb v. City of
Philadelphia, 733 F.2d 286, 294 (3d Cir. 1984) ("Stigma to
reputation alone, absent some accompanying deprivation of present
or future employment, is not a liberty interest protected by the
fourteenth amendment."). Indeed, even financial injury due
solely to government defamation does not constitute a claim for
deprivation of a constitutional liberty interest. Sturm, 835
F.2d at 1013. We emphasize that the crucial question is whether
the plaintiff “has alleged the alteration or extinguishment of
some additional interest." Id. (citation omitted). Kelly
11
simply has not done so. Therefore, his liberty interest claim,
resting solely on the alleged injury to his reputation, is not
sufficient to state a claim upon which relief may be granted for
violation of his Fourteenth Amendment rights.
4. Conclusion
Kelly has failed to allege that appellees deprived him
of a right cognizable under the Constitution, and he thus has
failed to state a claim upon which relief can be granted.
Accordingly, the district court properly dismissed the complaint.
Therefore, we will affirm the district court’s order of May 10,
1996.
12
KELLY v. BOROUGH OF SAYREVILLE, 96-5342
McKEE, Concurring
I agree that this case should be affirmed for the
reasons set forth by my colleagues and join their opinion.
However, I believe the district court’s reliance on the entire
controversy doctrine, as codified in New Jersey Court Rule 4:30A,
is too important to ignore, and I would therefore also
specifically hold that the district court erred in holding that
Kelly’s suit is barred by that doctrine.
The district court dismissed the instant suit because
Kelly and the Police Benevolent Association (“PBA”) had
previously initiated a proceeding before the Public Employment
Relations Commission (“PERC”). In that proceeding they alleged
that the Borough’s conduct constituted an unfair labor practice,
and that the defendant's proposed disciplinary proceedings
violated the New Jersey Employer-Employee Relations Act, N.J.
Stat. Ann. § 34:13A-1 et seq. (the “Act”), and Kelly's First
Amendment right to free speech1. PERC subsequently concluded that
the Borough had violated the Act. It recommended that the then -
pending disciplinary proceeding against Kelly be withdrawn, that
the defendants cease and desist from interfering with or
discriminating against the PBA or Kelly, and that any related
1
During the hearings before PERC, the unfair labor
practice charge was amended to delete Kelly as one of the named
charging parties.
1
disciplinary matters be expunged from Kelly’s record. The
instant suit under 42 U.S.C. § 1983 was filed before PERC issued
its ruling, and the administrative claim was therefore still
pending when this suit was filed. The district court held that
the entire controversy doctrine barred Kelly from bringing the
action under 42 U.S.C. § 1983 because of the prior administrative
action.
The New Jersey entire controversy doctrine is
a particularly strict
application of the rule
against splitting a cause
of action. Like all
versions of that rule its
purpose is to increase
judicial efficiency.
Thus it precludes not
only claims which were
actually brought in
previous litigation, but
also claims that could
have been litigated in
the previous litigation.
Bennun v. Rutgers State Univ., 941 F.2d 154, 163 (3d Cir. 1991).
The district court reasoned that Kelly had elected the
administrative forum, that the proceedings before PERC were
judicial in nature, and that Kelly had a fair opportunity to
litigate his claims before PERC. Kelly, 927 F. Supp. at 803. The
district court concluded that “to allow Kelly to deliberately
bypass New Jersey’s entire controversy rule would undermine the
policy considerations at the center of the doctrine.” Id. at
804.
2
However, PERC has a well-established practice of
refusing to hear constitutional claims except insofar as they
relate to statutory claims properly before it under the Act. See
Hunterdon Cent. High Sch. Bd. of Educ.v. Hunterdon Cent. High
Sch. Teachers Ass’n, 416 A.2d 980 (N.J. Super. Ct. App. Div.)
(holding that PERC did not exceed its authority in resolving, on
a constitutional ground, a matter involving mandatorily
negotiable terms in a teachers contract), aff’d. 429 A.2d 354
(1981); see also In re Bd. of Educ., 494 A.2d 279 (N.J. 1985),
and Brief of Amicus Curiae at 6 (PERC's jurisdiction is limited
to resolving statutory claims under the Act, and that
“jurisdiction does not extend to resolving federal constitutional
claims unless necessary to resolve such statutory claims.”).2
The district court erred in applying the entire
controversy doctrine. Our analysis of that doctrine under the
facts before us is squarely controlled by Jones v. Holvey, 29
F.3d 828 (3d Cir. 1994), cert. denied, 116 S. Ct. 1329 (1996).
In Holvey, administrative charges were brought against a state
inmate for possession of a weapon in prison. A hearing officer
found Jones guilty of that offense. Jones unsuccessfully
challenged that decision administratively and then appealed to
the Appellate Division of the Superior Court of New Jersey. That
2
The Public Employment Relations Commission filed an amicus
curiae brief before this court to clarify the issue of its
jurisdiction. It took no position as to the merits of the
dispute. See Brief of Amicus Curiae at 1.
3
court reversed the decision of the hearing officer and vacated
all sanctions that had been imposed on Jones.
Jones then filed an action in federal court under 42
U.S.C. § 1983 in which he alleged that his right to due process
had been violated in the administrative proceeding. There, as
here, the district court granted the defendants’ motion for
summary judgment. The court held that Jones’s federal action
under section 1983 was barred by the New Jersey entire
controversy doctrine and the doctrine of res judicata. “The
court determined that Jones could have raised the section 1983
claim . . . in the New Jersey State Court proceeding . . . .”
Id. at 829. Jones appealed to this court, and we reversed. We
held:
[U]nder the entire controversy doctrine, a party will
not be barred from raising claims
that he could not have brought in
the initial action. As the New
Jersey Supreme Court has stated, if
the court in the first action would
clearly not have had jurisdiction
to entertain the omitted theory or
ground (or, having jurisdiction,
would clearly have declined to
exercise it as a matter of
discretion), then a second action
in a competent court presenting the
omitted theory or ground should not
be held precluded.
4
Id. at 831 (internal quotations and citations omitted).3 Here,
the hearing examiner refused to hear Kelly’s First Amendment
constitutional claim because that claim was not integral to the
resolution of the labor dispute which was properly before the
administrative body. The district court held “because Kelly had
a fair opportunity to have litigated his claims before PERC, the
Court finds that the entire controversy doctrine applies to the
case at hand.” Kelly, 927 F. Supp. at 803. That was error. See
Watkins v. Resorts Int'l Hotel & Casino, Inc., 591 A.2d 592, 599
(N.J. 1991). There, the New Jersey Supreme Court stated:
If, on the other hand, a claim could not have been
presented in the first action, then
it will not be precluded in a later
action. . . . If the plaintiffs
could not have asserted both state
and federal claims in a single
forum, it would be unfair to force
them to sacrifice the claims that
could not be so asserted in order
to bring a single action in one
forum.
Id. at 599.
It is even more clear here that the entire controversy
doctrine should not preclude the federal action. In Holvey, we
surmised that the Appellate Division would not have exercised
jurisdiction of the federal claim based upon the “sparsity of the
complaint.” Id. at 832. Here, the hearing examiner actually
3
None of the parties cited Holvey in their briefs or
argument before this court, and I can only assume that the
district court was therefore also without the benefit of citation
to this authority.
5
refused to hear Kelly’s First Amendment constitutional claim
because that claim was not integral to the resolution of the
labor dispute which was properly before the administrative body.
We need not guess. The federal claims Kelly asserts here were
not adjudicated in the PERC proceeding. Therefore, Kelly’s
action in federal district court should not have become ensnared
in the tentacles of the entire controversy doctrine. Holvey, 29
F.3d at 831. I believe that we should avail ourselves of this
opportunity to define the parameters of this troublesome doctrine
and clarify its operation. Thus, although I join in the opinion
of my colleagues, I write separately to express regret that we
have missed an opportunity to start putting this jurisprudential
genie back into its analytical bottle.
6