Ronald Kramer v. Mary Cullinan ( 2018 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
RONALD H. KRAMER, No. 14-36103
Plaintiff-Appellee,
D.C. No.
v. 1:13-cv-00340-PA
MARY CULLINAN,
Defendant-Appellant, OPINION
and
SOUTHERN OREGON
UNIVERSITY; OREGON
UNIVERSITY SYSTEM; GEORGE
PERNSTEINER,
Defendants.
Appeal from the United States District Court
for the District of Oregon
Owen M. Panner, District Judge, Presiding
Argued and Submitted June 7, 2017
Portland, Oregon
Filed January 3, 2018
Before: A. Wallace Tashima, Ronald M. Gould,
and Johnnie B. Rawlinson, Circuit Judges.
Opinion by Judge Rawlinson
2 KRAMER V. CULLINAN
SUMMARY*
Civil Rights
The panel reversed the district court’s order, on summary
judgment, denying qualified immunity to Dr. Mary Cullinan,
the former-President of Southern Oregon University, in an
action filed by Ronald Kramer alleging that Dr. Cullinan
violated his liberty interest by releasing stigmatizing
information in connection with his termination.
The panel held that Dr. Cullinan was entitled to qualified
immunity. The panel held that a letter drafted by counsel
concerning Kramer’s employment, which became publicly
available, did not contain stigmatizing content. The panel
held that the letter stopped short of actually imputing to
Kramer any bad faith, willful misconduct, intentional acts,
waste or fraud, and the letter did not reference the type of
stigmatizing statements that this Circuit has held to be
actionable, i.e., those accusing terminated employees of
dishonesty, immorality and the like. Viewing this evidence in
the light most favorable to Kramer, the panel concluded that
the district court’s characterization of the letter’s contents as
stigmatizing was erroneous, and that Dr. Cullinan was
entitled to qualified immunity. The panel further held that
even if the content were stigmatizing, it was not clearly
established law that charges other than fraud, dishonesty, and
immorality would trigger the requirements of a name-clearing
hearing. The panel therefore reversed the district court’s
decision denying qualified immunity and remanded with
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
KRAMER V. CULLINAN 3
directions to enter summary judgment in favor of Dr.
Cullinan.
COUNSEL
Brenda K. Baumgart (argued), Amy Joseph Pedersen, Andrea
H. Thompson, and Rachel C. Lee, Stoel Rives LLP, Portland,
Oregon, for Defendant-Appellant.
Christine N. Moore (argued) and Richard S. Yugler, Landye
Bennett Blumstein LLP, Portland, Oregon, for
Plaintiff-Appellee.
OPINION
RAWLINSON, Circuit Judge:
Dr. Mary Cullinan (Dr. Cullinan), former-President of
Southern Oregon University (SOU), appeals from the district
court’s denial of her motion for summary judgment seeking
qualified immunity in an action filed by Ronald Kramer
(Kramer) alleging that Dr. Cullinan violated his liberty
interest by releasing stigmatizing information in connection
with his termination. Because it is unlikely that the
information released was stigmatizing, and because it was not
clearly established as a matter of law that the information was
stigmatizing, Dr. Cullinan was entitled to qualified immunity.
I. BACKGROUND
SOU employed Kramer on an annual appointment basis
in a dual role, as Executive Director of Jefferson Public Radio
4 KRAMER V. CULLINAN
(Public Radio) and as Executive Director of a related
foundation, the JPR Foundation, Inc. (Foundation). Kramer
reported directly to Dr. Cullinan.
At some point, Dr. Cullinan became concerned about
costly capital projects being undertaken by Foundation, such
as the acquisition and renovation of a theater and a
warehouse. Dr. Cullinan notified Foundation and the Oregon
University System (University System) Chancellor
(Chancellor Pernsteiner), of the potential financial risk to
SOU as a result of Foundation’s projects. Dr. Cullinan also
raised the issue of conflict-of-interest situations between
Public Radio and Foundation.
In response to Dr. Cullinan’s concerns, Chancellor
Pernsteiner initiated an asset and liability review of Public
Radio and Foundation. The resulting report (Audit Report)
concluded that Foundation’s new projects could impose
“additional strain” on community fund-raising and “may not
align with policy interests of SOU.” The Audit Report also
noted inherent problems, including actual, apparent, and
potential conflicts of interest with Kramer serving as
Executive Director of both Public Radio and Foundation. One
consequence of that arrangement was “a lack of segregation
of duties by the Executive Director of [Public Radio] when
entering into contracts,” which was a conflict of interest
because “one individual cannot adequately represent the
interests of two separate parties to the same agreement or
contract.” The Audit Report determined that this situation
was contrary to SOU’s contract policy.1
1
Additionally, Oregon Administrative Rule 580-046-0025(2)
provided that a foundation’s governing body, employees, and agents
“[s]hall not be subject to control by the institution or an institution
KRAMER V. CULLINAN 5
The Audit Report concluded that there was high internal
control risk regarding the key areas examined. The report
included recommendations to reduce those risks, including
prohibiting one person from serving as Executive Director of
both Public Radio and Foundation. In response, Dr. Cullinan
agreed to address the concerns raised by the Audit Report and
eliminate the conflict of interest posed by Kramer’s dual
roles. Dr. Cullinan convened a task force to address
implementation of the recommendations in the Audit Report.
Kramer resisted limiting his employment to one role, and
insisted that it was crucial to Public Radio and Foundation
that he continue serving as Executive Director of both
entities. The task force completed its work, but no
recommended resolution of the conflict presented by
Kramer’s dual roles was presented to Dr. Cullinan.
In the meantime, Kramer launched a counteroffensive,
drafting and distributing proposed resolutions to the
Foundation Board (Board). The resolutions would have
dramatically altered the relationship between SOU and
Foundation, deprived SOU of assets, and secured Kramer’s
position at Foundation. The resolutions were to be voted upon
at the Board meeting scheduled for March 22, 2012.
Upon learning of Kramer’s proposed resolutions, Dr.
Cullinan sought the advice of counsel, who sent a letter
(Miller Nash Letter) to Foundation’s attorney, dated the same
day as the scheduled board meeting. The Miller Nash Letter
included a copy of the Audit Report and highlighted the
recommendation that SOU eliminate the conflict of interest
employee” and “[s]hall not give the appearance that the institution or any
of its officers or employees control the foundation or its property.”
6 KRAMER V. CULLINAN
presented by Kramer’s dual role. The Miller Nash Letter
informed Foundation that SOU considered Kramer’s
proposed resolutions counterproductive, and requested that
Foundation’s Board not adopt the proposed resolutions. The
Letter also outlined potential avenues of legal redress against
Foundation, its Board, and/or Kramer, to protect SOU’s rights
in Public Radio and its assets.
The Miller Nash Letter also addressed the directors’ and
Kramer’s potential liability, outlining reasons why they might
not be protected by directors’ and officers’ liability insurance.
It is this portion of the Miller Nash Letter that precipitated
Kramer’s claim of stigmatization. In the course of explaining
why indemnification might not be available to Kramer or
Foundation’s directors, the Miller Nash Letter opined that
directors’ and officers’ liability policies generally “exclude
coverage for intentional acts, waste, or fraud.” The Miller
Nash Letter contained the following language that Kramer
also identified as stigmatizing:
Nor do we see a clear path to indemnity.
Article X of the bylaws forbids
indemnification for actions taken in bad faith
or through willful misconduct. If any actions
of Mr. Kramer or the Foundation’s directors
(including past actions and the adoption of the
Proposed Resolutions) are determined to have
been made in bad faith or through willful
misconduct, neither Mr. Kramer nor the
Foundation’s directors will be entitled to
indemnification, and they are unlikely to be
entitled to protection under any directors’ and
officers’ liability insurance.
KRAMER V. CULLINAN 7
The Miller Nash Letter also contained a request that
Foundation’s attorney transmit the Letter to Board members.
At the Board meeting, copies of the Miller Nash Letter
were made available. Members of the press were in
attendance. In a prepared statement to the Board, Dr. Cullinan
discussed SOU’s need to act as a “good steward of public
assets,” and expressed her hope for a mutually beneficial
outcome. She stated in part:
While I continue to hope for a mutually
beneficial solution, I must be clear that, if the
board passes some of the resolutions before it
today, SOU must take prompt action to
protect the interests of [Public Radio], its
donors and the University. As you know, SOU
is a public university and has a legal
obligation to be a good steward of public
assets. In light of that obligation, we have
consulted external legal counsel about the
possible consequences of the actions before
the [Public Radio Foundation] board, and we
will follow the advice of counsel in taking
whatever action is warranted should these
resolutions pass. Our attorneys have drafted a
letter outlining the serious potential risks
associated with the proposed resolutions, and
they have asked the [Public Radio]
Foundation’s attorney to share that letter with
you all.
Dr. Cullinan urged SOU and Foundation to address their
issues through mediation, rather than legal action. Still, she
expressed a belief that if the resolutions were passed, “and
8 KRAMER V. CULLINAN
SOU is required to take protective legal action, this situation
will quickly move past the point where we can reach an
amicable resolution.”
After the Board rejected the proposed resolutions,
Foundation and SOU engaged in mediation resulting in an
agreement that was not approved by the Board.
The day following the Board meeting, Dr. Cullinan sent
Kramer a potential non-renewal notice (the March 23 Notice).
The March 23 Notice informed Kramer that his annual
appointment with SOU “may not be renewed for the
upcoming 2012-2013 fiscal year” and that his employment
with SOU “may terminate on June 30, 2012.”
On June 25, 2012, Dr. Cullinan informed Kramer that his
appointment definitely would not be renewed (the June 25
Non-Renewal). The non-renewal was without cause. Kramer
challenged the non-renewal of his appointment and received
a hearing before SOU’s Grievance Hearing Committee (the
Committee). Due to the equivocal phrasing of the March 23
Notice, the Committee determined that Kramer had not
“received proper notice of his non-renewal.” The Committee
recommended that Kramer be given 90 days’ salary and
benefits to remedy the insufficient notice, which Dr. Cullinan
approved and SOU paid. The Committee also confirmed that
SOU policy did not require any reason to be stated in a notice
of non-renewal.
Following completion of the grievance procedures,
Kramer brought suit in federal district court against Dr.
Cullinan, Chancellor Pernsteiner, SOU, and the University
System (collectively the Defendants), asserting various
claims related to his separation, including a civil rights claim
KRAMER V. CULLINAN 9
against Dr. Cullinan for deprivation of a liberty interest
without due process of law.2 Defendants moved for summary
judgment on all claims, including the state law claims, against
Dr. Cullinan and Chancellor Pernsteiner. In a well-reasoned
order, the district court granted summary judgment in favor
of Defendants on all claims, with the exception of the civil
rights claim against Dr. Cullinan for deprivation of a liberty
interest without due process of law.3
Addressing Kramer’s liberty interest claim against Dr.
Cullinan, the district court concluded that the Miller Nash
Letter contained stigmatizing charges against Kramer, that
the charges were made public, and that the charges were
connected to Kramer’s termination. The district court also
held that Kramer’s constitutional right was clearly
established. This claim against Dr. Cullinan is the only issue
remaining for resolution on appeal.
2
Kramer also alleged violation of his property interest without due
process (against Dr. Cullinan), violation of equal protection under the
Fourteenth Amendment (against Chancellor Pernsteiner), and state law
claims of blacklisting (against SOU and Dr. Cullinan), tortious
interference with economic relations, breach of contract, and wage and
hour violation.
3
The court concluded that Kramer “had no protected property
interest in his continued employment with SOU,” that “Pernsteiner’s
actions did not constitute a violation of Kramer’s right to equal
protection,” that there was “no evidence . . . that Defendants acted with the
malicious intent to injure Kramer” through blacklisting, that Kramer was
not entitled to any further remedy under his contract because he “received
ninety days of pay and benefits,” and that the Grievance Committee’s
award was not subject to Oregon’s wage collection statute.
10 KRAMER V. CULLINAN
II. DISCUSSION
Dr. Cullianan contends that she is entitled to qualified
immunity with respect to the claim that she “[v]iolated [n]o
Fourteenth Amendment [r]ight.” Specifically, Dr. Cullinan
maintains that the Miller Nash Letter contained no
stigmatizing charges, that the Letter was not sent in the
course of Kramer’s termination, and that the asserted
constitutional right was not clearly established at the time of
the alleged violation.
“We review a denial of qualified immunity de novo,
viewing the facts and drawing reasonable inferences in the
light most favorable to the party opposing summary
judgment. . . . ” Ames v. King Cty., Wash., 846 F.3d 340, 347
(9th Cir. 2017) (citation omitted).
To determine whether a public official is entitled to
qualified immunity, we consider whether 1) the official
violated a constitutional right, and 2) the “right was clearly
established at the time of the official’s alleged misconduct.”
Id. (citation omitted). It is within our discretion which prong
to address first. See id.
A) Whether Dr. Cullinan violated a constitutional right
The Fourteenth Amendment protects against deprivation
of liberty and property interests without due process of law.
See K.W. ex rel. D.W v. Armstrong, 789 F.3d 962, 972 (9th
Cir. 2015). “A person’s liberty interest is implicated if the
government levels a charge against him that impairs his
reputation for honesty or morality. . . . ” Guzman v. Shewry,
552 F.3d 941, 955 (9th Cir. 2009), as amended (citation and
internal quotation marks omitted). If the government, in the
KRAMER V. CULLINAN 11
course of terminating a person’s employment, publicly
discloses stigmatizing information, the employee is entitled
to a “name-clearing hearing.” Cox v. Roskelley, 359 F.3d
1105, 1110 (9th Cir. 2004).
To establish that she “has a protected liberty interest at
stake,” a plaintiff must demonstrate that: “(1) the accuracy of
the charge is contested, (2) there [was] some public disclosure
of the charge, and (3) the charge [was] made in connection
with the termination of employment . . .” See Guzman,
552 F.3d at 955 (citation and internal quotation marks
omitted).4
Whether a defendant’s statements rise to the level of
stigmatizing a plaintiff is a question of fact. See Campanelli
v. Bockrath, 100 F.3d 1476, 1480 (9th Cir. 1996). We have
previously held that charges made by an employer may be
sufficiently stigmatizing to implicate an employee’s liberty
interest. See, e.g., Guzman, 552 F.3d at 946 (accusing
employee of fraudulently avowing that medical devices were
FDA-approved); Campanelli, 100 F.3d at 1480 (charging
coach with “immoral conduct”); Vanelli v. Reynolds Sch.
Dist., 667 F.2d 773, 776–78 (9th Cir. 1982) (dismissing
teacher for “offensive conduct”).
Here, the Miller Nash Letter explained that if Kramer’s
proposed resolutions were approved by Foundation, SOU
might pursue legal redress. The Miller Nash Letter
specifically mentioned potential legal action against Kramer
individually for breach of fiduciary duty and violations of the
4
We assume, without deciding, that the Miller Nash Letter was sent
in the course of Kramer’s termination. It is undisputed that the other
requirements are met.
12 KRAMER V. CULLINAN
Standards of Conduct for officers of Oregon nonprofit
corporations. The Letter also expressed that in the event the
resolutions were passed, SOU did not “see a clear path
toward indemnity.” As discussed, it was in this context that
the language identified by Kramer as stigmatizing was
used—identifying “actions taken in bad faith or through
willful misconduct” and noting that “intentional acts, waste
or fraud” are generally excluded from coverage. The
difficulty with Kramer’s argument is that the Letter stopped
far short of actually imputing bad faith, willful misconduct,
intentional acts, waste, or fraud to Kramer. Rather, the Letter
stated that if the actions were later determined to constitute
bad faith or willful misconduct, insurance coverage would not
be available. This statement is not analogous to the
affirmative statements we have held to be stigmatizing. See,
e.g., Guzman, 552 F.3d at 946; Campanelli, 100 F.3d at 1480;
Vanelli, 667 F.2d at 776–78.
In Tibbets v. Kulongoski, 567 F.3d 529, 530 (9th Cir.
2009), former employees brought a § 1983 action against the
Governor of Oregon and other state actors alleging violation
of their Fourteenth Amendment due process rights. The
employees maintained that the state made stigmatizing
statements about them in press releases without providing
name-clearing hearings. See id. We reiterated that “a liberty
interest is implicated in the employment termination context
if the charge impairs a reputation for honesty or morality.” Id.
at 535 (citation omitted). We concluded that statements
referencing “strengthening accountability and transparency,”
“ethics,” “honesty,” and “openness” were “more analogous to
cases where honesty . . . has been implicated.” Id. at 537
(alteration omitted).
KRAMER V. CULLINAN 13
In Cox, a terminated employee brought a § 1983 action
alleging in part that county officials deprived him of his
liberty interest in his good name. We focused our analysis on
whether placing a stigmatizing termination letter in an
employee’s personnel file sufficiently publicized the
stigmatizing information. See 359 F.3d at 1109–12. We
accepted as true Cox’s assertion that the notice of termination
in his personnel file contained stigmatizing information,
explaining that “there is no doubt that the termination letter
charged improper conduct and could impair Cox’s reputation
for honesty or morality.” Id. at 1113.
The Miller Nash Letter stopped short of actually imputing
to Kramer any bad faith, willful misconduct, intentional acts,
waste or fraud, and the Letter did not reference the type of
stigmatizing statements we have held to be actionable, i.e.,
those accusing terminated employees of dishonesty,
immorality and the like. Viewing this evidence in the light
most favorable to Kramer, we conclude that the district
court’s characterization of the Letter’s contents as
stigmatizing was erroneous, and Dr. Cullinan was entitled to
qualified immunity.
B) Whether the asserted right was clearly established
Although we elected to first address the existence of a
constitutional violation, we would reach the same result had
we first examined whether the constitutional right asserted is
clearly established. See Pearson v. Callahan, 555 U.S. 223,
236 (2009) (holding that courts may “exercise their sound
discretion in deciding which of the two prongs of the
qualified immunity analysis should be addressed first”).
14 KRAMER V. CULLINAN
For a constitutional right to be “clearly established” its
“contours [must be] sufficiently definite that any reasonable
official in the defendant’s shoes would have understood that
he was violating it.” Plumhoff v. Richard, 134 S. Ct. 2012,
2023 (2014). Although a case “directly on point” is not
required for a right to be clearly established, “existing
precedent must have placed the statutory or constitutional
question beyond debate.” White v. Pauly, 137 S. Ct. 548, 551
(2017) (citation and internal quotation marks omitted). So
long as existing caselaw “did not preclude” an official from
reasonably believing that his or her conduct was lawful, the
official has a right to qualified immunity. Lane v. Franks,
134 S. Ct. 2369, 2381 (2014).
To evaluate whether a particular question is beyond
debate, a court looks for “cases of controlling authority in
[the plaintiff’s] jurisdiction at the time” or “a consensus of
cases of persuasive authority such that a reasonable officer
could not have believed that his actions were lawful.” Wilson
v. Layne, 526 U.S. 603, 617 (1999). The plaintiff bears the
burden of demonstrating that the right at issue was clearly
established. See Alston v. Read, 663 F.3d 1094, 1098 (9th Cir.
2011).
By the time of Kramer’s termination, it was clearly
established law that an employer charging an employee with
fraud, dishonesty, or immorality is required under the
Fourteenth Amendment to afford that employee a name-
clearing hearing. See Guzman, 552 F.3d at 955; Tibbetts,
567 F.3d at 530; Campanelli, 100 F.3d at 1480. However, that
generalized statement of the law was not sufficient to put Dr.
Cullinan on notice that her particular actions violated
Kramer’s constitutional rights. See Mitchell v. Washington,
818 F.3d 436, 447 (9th Cir. 2016) (holding that it is not
KRAMER V. CULLINAN 15
enough “that the broad principle underlying a right is well-
established”) (citation and alteration omitted). Accordingly,
Kramer’s reliance on Tibbets and Cox as “clearly
establishing” precedent is not persuasive. Those cases did not
definitively place the question of whether the conditional
language in the Miller Nash letter was stigmatizing “beyond
debate.” Plumhoff, 134 S. Ct. at 2023. Indeed, as discussed,
the language in the Letter is not similar to phrasing that we
have found to be stigmatizing.
The district court failed to identify, the parties have not
cited, and we have not found a case where conditional
language was determined to be stigmatizing. Neither has a
case been referenced that found stigmatization in the absence
of a charge of fraud, dishonesty, or immoral conduct. In this
circumstance, Kramer has failed to place the stigmatizing
nature of the Letter “beyond debate.” White, 137 S. Ct. at
551; see also Alston, 663 F.3d at 1098 (placing this burden on
the plaintiff). Reliance on the broad principles espoused in
Tibbets and similar cases clearly establishing the stigmatizing
nature of charges of fraud, dishonesty, or immorality does not
place the question in this case “beyond debate” because the
Letter did not charge Kramer with fraud, dishonesty or
immorality. At worst, the Letter could plausibly be read to
imply a breach of fiduciary duty. But no precedent has been
brought to our attention clearly establishing a charge of
breach of fiduciary duty as stigmatizing.
The Supreme Court has cautioned us against defining
clearly established law “at a high level of generality.” White,
137 S. Ct. at 552. In White, the Supreme Court overruled a
decision of the Tenth Circuit denying qualified immunity
where “it failed to identify a case where an officer acting
under similar circumstances . . . was held to have violated the
16 KRAMER V. CULLINAN
Fourth Amendment.” Id. at 550, 552. The Supreme Court
reiterated that “the clearly established law must be
particularized to the facts of the case.” Id. at 552 (citation and
internal quotation marks omitted). There is simply no clearly
established law “particularized to the [unique] facts of [this]
case.” Id. This is not a case where the stigmatizing nature of
the charge is obvious as in Guzman, 552 F.3d at 946 (fraud),
or Tibbets, 567 F.3d at 530 (dishonesty), or Campanelli, 100
F.3d at 1480 (immorality), or Vanelli, 667 F.2d at 776–78
(“offensive conduct”). Dr. Cullinan’s conduct did not
constitute such a run-of-the-mill Fourteenth Amendment
violation. Instead, this case lacks an explicit charge of fraud,
dishonesty, or immorality, militating against a conclusion that
Dr. Cullinan’s actions violated a “clearly established” right.
White, 137 S. Ct at 552.
III. CONCLUSION
Dr. Cullinan was entitled to qualified immunity. The
Miller Nash Letter did not contain stigmatizing content, and
even if the content were stigmatizing, it was not clearly
established law that charges other than fraud, dishonesty, and
immorality would trigger the requirements of a name-clearing
hearing. The district court decision denying qualified
immunity to Dr. Cullinan is reversed, and the case is
remanded to the district court with directions to enter
summary judgment in favor of Dr. Cullinan.
REVERSED and REMANDED with directions.