Lukan v. North Forest ISD ( 1999 )

UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 98-21158
OLUFEMI ANTHONY LUKAN,
Plaintiff-Appellee,
VERSUS
NORTH FOREST ISD; et al.,
Defendants,
GLORIA S. SCOTT, L.V. BRISCO,
Defendants-Appellants.
Appeal from the United States District Court
for the Southern District of Texas
July 28, 1999
Before EMILIO M. GARZA, DeMOSS, and PARKER, Circuit Judges.
ROBERT M. PARKER, Circuit Judge:
Olufemi Lukan filed suit against the North Forest Independent
School District, Dr. Gloria S. Scott, and L.V. Brisco, alleging a
free speech retaliation claim under 42 U.S.C. § 1983 and a state
law claim under the Texas Whistleblower Act. The district court
denied the Appellants’ motion for summary judgment on the ground of
qualified immunity. We reverse.
I. FACTS AND PROCEEDINGS
Lukan was first employed by the North Forest Independent
School District (“NFISD”) in 1986. Initially, he worked as an
accounting supervisor for three years under L.V. Brisco in the
district’s business office. In 1989, Lukan was promoted to the
district’s internal auditor position, where he responsible for
informing the superintendent of the district’s financial affairs
and working with external auditors on audits for the year.
In April, 1996, Dr. Gloria S. Scott succeeded Dr. Carroll
Thomas as the NFISD superintendent. In July, 1996, Scott
reorganized the entire NFISD administrative office. As a part of
the reorganization, Lukan, on Scott’s recommendation and the school
board’s approval, was appointed to the newly created position of
director of financial services. At this time, Scott contracted
with an independent public accounting firm, Saul & Pechacek, to
audit the district’s finances.
In August, 1996, Lukan discovered financial improprieties in
the business office. Lukan was confronted with requests from Scott
and Brisco for payments to a construction company that appeared to
circumvent the competitive bidding process. Lukan also found that
two laptop computers disappeared from the district that were
reported stolen from Brisco’s home during a burglary. Brisco’s
personal insurance paid him for the loss of the computers and he
had not yet paid the district for the losses. In addition, Lukan
discovered a questionable financial entry showing $7.3 million
attributed to a miscellaneous expenditures account. Finally, Lukan
noticed that Scott and Brisco had approved questionable wire
transfers of nearly $2.1 million to a third party with little or no
documentation. As a result, Lukan reported the suspected financial
improprieties to the Texas Education Authority (“TEA”) and the
Harris County district attorney’s office.
The record reflects that the district had a considerable
number of financial problems in addition to the suspected
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improprieties that Lukan discovered. In September, 1996, Scott
received the special audit report from Saul & Pechacek which was
critical of the district’s finances. The report noted that the
district’s bank accounts had not been reconciled in approximately
five years and criticized Lukan's job performance for failing to
inform the superintendent of the district's financial situation and
failing to conduct audits of the reconciliations. In October,
1996, in response to Lukan’s whistleblowing, the TEA sent auditors
to the district to investigate the finances. The TEA auditors
cited numerous problems with the district’s finances and
accounting. In March 1997, as a result of the TEA investigation,
Scott and Brisco were suspended by the NFISD Board of Trustees, and
in April, Scott was terminated. Scott and Brisco were later
reinstated when the composition of the board changed as a result of
a new board election.
In April, 1997, the TEA again visited the district to evaluate
the 1997 fiscal year (September, 1996 - August, 1997) budget. In
this evaluation, the TEA recommended external consultants to
improve the financial state of the district, and further, stated
that the district needed to reorganize the business office. The
external consultants also were critical of Lukan's job performance.
In June, 1997, upon TEA's recommendation, the district reorganized
the business office, creating three new positions, a chief
financial officer, an internal auditor, and a director of fixed
assets. Lukan applied and interviewed for the chief financial
officer position with five other candidates. After evaluating and
ranking each of the candidates on a numerical system, Lukan was not
selected by a four-member interviewing committee for the chief
financial officer position. Because the chief financial officer
position encompassed Lukan’s old job, the director of financial
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services, Lukan was reassigned to a position with the same pay as
the director of fixed assets position. Lukan also applied for the
internal auditor position. The committee again recommended another
applicant.
In September, 1997, Lukan filed suit under 42 U.S.C. § 1983
asserting a violation of his First Amendment rights, and further,
asserting violations of the Texas Whisteblower Act. See Tex.
Gov't Code Ann. § 554.002 (Vernon Supp. 1999). Defendants filed
motions for summary judgment on the basis of qualified immunity.
The district court denied defendants’ motions.
II. DISCUSSION
A. Appellate Jurisdiction
Before reaching the merits, we must determine whether we have
appellate jurisdiction in this interlocutory appeal. The district
court denied Appellants’ motion for summary judgment on the ground
that “several material fact issues” existed. We conclude that the
district court’s denial of summary judgment on the basis of
qualified immunity was based on a conclusion of law and that we
possess jurisdiction to hear this appeal.
“District court orders denying summary judgment on the basis
of qualified immunity are immediately appealable under the
collateral order doctrine, notwithstanding their interlocutory
character, when based on a conclusion of law.” Coleman v. Houston
Indep. Sch. Dist., 113 F.3d 528, 531 (5th Cir. 1997) (citing
Mitchell v. Forsyth, 472 U.S. 511, 530 (1985)). An order is purely
legal where it concerns only the application of established legal
principles to a given set of facts. See Johnson v. Jones, 515 U.S.
504, 513-14 (1995). The existence of disputed issues of material
fact does not necessarily preclude review of the case. See Wren v.
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Towe, 130 F.3d 1154, 1157 (5th Cir. 1997). A petitioner may “claim
on appeal that all of the conduct which the District Court deemed
sufficiently supported for the purposes of summary judgment met the
Harlow standard of ‘objective legal reasonableness.’” Id. (quoting
Behrens v. Pelletier, 516 U.S. 299, 313 (1996)). See also Harlow
v. Fitzgerald, 457 U.S. 800 (1982).
Appellants claim that they are entitled to qualified immunity
as a matter of law because the facts at issue do not constitute a
clearly established violation of federal law or, in the
alternative, that their actions were objectively reasonable. As we
are addressing conclusions of law, we may exercise appellate
jurisdiction over this interlocutory appeal.
B. Standard of Review
This Court reviews the district court’s denial of a motion for
summary judgment based on qualified immunity de novo. See
Benningfield v. City of Houston, 157 F.3d 369, 374 (5th Cir. 1998).
Summary judgment shall be entered in favor of the moving party if
the record, taken as a whole, “show[s] that there is no genuine
issue as to any material fact and that the moving party is entitled
to a judgment as a matter of law.” Fed. R. Civ. P. 56(c). A
factual dispute is “genuine” where a reasonable party could return
a verdict for the nonmoving party. See Crowe v. Henry, 115 F.3d
294, 296 (5th Cir. 1997). If the record, taken as a whole, could
not lead a rational trier of fact to find for the non-moving party,
then there is no genuine issue for trial. See Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 597 (1986).
C. Qualified Immunity
The sole issue on interlocutory appeal is whether Appellants
were entitled to qualified immunity from Lukan’s § 1983 claim for
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the alleged violation of his First Amendment rights. In
determining whether a public official is entitled to qualified
immunity under § 1983, we apply a two-step analysis. First, if the
official’s conduct did not violate a clearly established
constitutional right, the official is entitled to qualified
immunity. See Jones v. Collins, 132 F.3d 1048, 1052 (5th Cir.
1998). Second, even if the official’s conduct violated a clearly
established constitutional right, the official is nonetheless
entitled to qualified immunity if his conduct was objectively
reasonable. See id.
A First Amendment retaliation claim must include facts showing
that: (1) the employee suffered an adverse employment decision;
(2) the employee’s speech involved a matter of public concern; (3)
the employee’s interest in commenting on matters of public concern
outweighs the defendants’ interest in promoting efficiency; and
(4) the employee’s speech must have motivated the defendants’
action. See Harris v. Victoria Indep. Sch. Dist., 168 F.3d 216,
220 (5th Cir. 1999). If the plaintiff carries this burden, then
the defendant must show, by a preponderance of the evidence, that
it would have taken the same action against the plaintiff even in
the absence of the protected conduct. See Mt. Healthy City Sch.
Dist. Bd. of Educ. v. Doyle, 429 U.S. 274, 283-87 (1977); Brady v.
Houston Indep. Sch. Dist., 113 F.3d 1419, 1423 (5th Cir. 1997).
At the outset, we note that Lukan has abandoned his First
Amendment retaliation claim against Brisco. Lukan has not
presented any evidence that Brisco retaliated or conspired against
Lukan. With respect to Scott, the parties do not dispute that
Lukan suffered an adverse employment decision, the speech involved
was a matter of public concern, and the matters of public concern
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outweighed interests in efficiency. Thus, we consider only whether
Lukan’s speech motivated Scott’s actions.
Lukan’s evidence fails to establish a causal connection
between the speech and the adverse employment actions that he
alleges. Lukan presented evidence of retaliation by Scott,
asserting that Scott removed tax and purchasing responsibilities
from his control and that she also recommended not renewing Lukan’s
employment contract. Lukan also suggested that Scott had a motive
to retaliate against Lukan because his speech led to Scott’s
temporary suspension and termination. Further, Lukan contends that
as the head of the hiring committee, Scott had the opportunity to
make negative comments and direct the interviewing committee to
select candidates other than Lukan for the chief financial officer
and internal auditor positions.
Our review of the record, however, shows that the interviewing
committee responsible for selecting the job candidates did not
retaliate against Lukan. The interviewing committee members
testified in affidavits that they did not have any knowledge of
Lukan’s whistleblowing activities against Scott. Lukan has not
alleged, nor can we find, any evidence that the committee’s process
was tainted or harbored any illegal motives. The interviewing
committee ranked Lukan and other candidates for the chief financial
officer and internal auditor positions on a numerical-based system
using a series of identical questions posed to each candidate. The
committee recommended the highest scoring candidates for the chief
financial officer and internal auditor positions to the NFISD
board. The NFISD, in turn, hired the recommended candidates.
Lukan has failed to establish a causal connection between his
speech and the alleged retaliatory conduct.
Moreover, our review of the record shows that even if Lukan
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established that his speech motivated their conduct, the defendants
would have taken the same action. The district was suffering from
severe financial problems prior to and during Scott’s tenure as the
superintendent. Multiple audits of the business office showed
ongoing performance problems such as failures to conduct bank
reconciliations, unrecorded checks and deposits, and large budget
deficits. The September, 1996, special audit report was critical
of the business office staff and the failures to reconcile the bank
accounts. The October, 1996, TEA evaluation highlighted a number
of financial and accounting problems in the district, and further,
recommended external auditors and reorganization of the business
office. The external auditors found the district’s financial
records “the worse they had ever seen.” In light of Lukan's job
performance and the critical state of the district's finances, the
Appellants would have taken the same action in the absence of
Lukan’s protected conduct. Thus, Appellants did not violate
Lukan’s constitutional rights and were entitled to qualified
immunity.
III. CONCLUSION
Based on the foregoing reasons, the district court’s denial of
summary judgment for Appellants is REVERSED.
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