Paul Kearney, M.D. v. University of Kentucky ( 2022 )

RENDERED: JANUARY 20, 2022
TO BE PUBLISHED
Supreme Court of Kentucky
2020-SC-0010-DG
PAUL KEARNEY, M.D. APPELLANT
ON REVIEW FROM COURT OF APPEALS
V. NO. 2018-CA-1270
FAYETTE CIRCUIT COURT NO. 15-CI-00551
UNIVERSITY OF KENTUCKY APPELLEE
OPINION OF THE COURT BY JUSTICE HUGHES
AFFIRMING
The Kentucky Whistleblower Act (KWA) protects the governmental
employee who brings to light his employer’s wrongdoing as defined by
Kentucky Revised Statute (KRS) 61.102(1). Wrongdoing includes violation of
“any law, statute, executive order, administrative regulation, mandate, rule, or
ordinance.” Upon this review of a summary judgment in favor of the University
of Kentucky (UK or University), we must determine whether the KWA protects a
UK employee who reports the violation of an internal administrative regulation,
here AR 3:14. We conclude that KRS 61.102(1) refers to an administrative
regulation duly promulgated pursuant to KRS Chapter 13A and thus the
employee’s allegations related to AR 3:14 do not constitute a disclosure
protected by the KWA. We also conclude that the employee’s other identified
communications do not meet the KWA’s requirements. The communication
related to UK’s alleged mismanagement of the Kentucky Medical Services
Foundation (KMSF)’s funding lacks objective facts or information, a
prerequisite for a disclosure protected by the KWA. Furthermore, the affidavit
related to KMSF’s use of funds, which was filed in the record of this case after
the employee’s disciplinary action concluded and after UK notified the
employee that his salary was being reviewed due to the material change in his
employment status, is not evidence sufficient to allow a reasonable person to
conclude the affidavit’s disclosures were a contributing factor in the employee’s
May 2016 salary reduction. On discretionary review, we agree with the trial
court and the Court of Appeals that summary judgment is proper in this case.
FACTUAL AND PROCEDURAL BACKGROUND
Dr. Paul Kearney, a trauma surgeon and tenured professor of surgery,
initiated this action against UK in February 2015, alleging claims under the
KWA, KRS 61.101-61.103. Dr. Kearney claims that UK retaliated against him,
including suspending his clinical privileges to practice medicine at the
University’s hospital and clinics, because he disclosed administrative
wrongdoing. UK counters that the acts which Dr. Kearney complains about are
disciplinary-related acts only and are the result of Dr. Kearney’s improper,
unprofessional behavior over many years when interacting with staff and
students, and more recently, a patient. UK moved the trial court for summary
judgment arguing that Dr. Kearney could not establish a prima facie case of
whistleblower retaliation. The trial court granted summary judgment, agreeing
2
that Dr. Kearney fails to qualify for whistleblower protection under KRS
61.102. The Court of Appeals affirmed the trial court. This Court granted
discretionary review to determine if any of Dr. Kearney’s statements at issue
are protected disclosures under the KWA.
Dr. Kearney identifies four statements which he alleges disclosed
wrongdoing, all statements related to the College of Medicine’s Practice Plan
Committee (PPC) and to the KMSF. Dr. Kearney believes his statements
brought to light the University administration’s non-compliance with an
administrative regulation, mismanagement, waste, fraud or abuse of authority.
This being a review of a summary judgment, the record must be viewed in a
light most favorable to Dr. Kearney and all doubts are to be resolved in his
favor. Steelvest, Inc. v. Scansteel Serv. Ctr., Inc., 807 S.W.2d 476, 480 (Ky.
1991).
The PPC was created in July 2009 by the UK Board of Trustees through
UK’s AR 3:14.1 AR 3:14, Article X, states in part, “The Committee shall meet
periodically and shall review the operation of the Plan and the College
Addendum, including matters relating to the applicability of the Plan to sources
of income, standard schedules of charges for services, and any other aspects of
the operation of the Plan.” As described by Dr. Kearney, AR 3:14 formed the
College of Medicine budgetary oversight committee and mandated that the
committee meet periodically to fulfill that budgetary watchdog role.
1 UK states that the role of the PPC is to review the operation of the medical
practice plan and make recommendations to the Dean of the College of Medicine.
3
The KMSF is a non-profit, non-member 501(c)(3) corporation. The KMSF
serves as a medical services organization collecting the billings generated by
the UK hospital clinical physicians and returning those funds back to the
physicians in the form of salaries and for research. KSMF’s board of directors
is comprised of the College of Medicine’s department chairs and six elected
faculty.
KMSF and UK have entered into an annually renewable contract. The
contract reads in part: “The parties agree that the University Internal Auditors
may conduct an audit of Foundation’s operations and accounts for period
ending June 30, 2014 and such other audits, including audits to determine
compliance with this agreement . . . .” The contract also carves out the
Academic Enrichment Fund for the College of Medicine. The contract provision
pertaining to the Academic Enrichment Fund directs that “eight percent (8%) of
the actual clinical income collected by said Foundation [is] to be used by the
Dean of the College of Medicine for the enrichment of the programs of the
College or for related purposes at his/her sole discretion.” Considering that the
College of Medicine’s department chairs are appointed by and serve at the
pleasure of the Dean of the College of Medicine, and that those department
chairs also serve on the KMSF board of directors, Dr. Kearney states that
absent a functioning PPC to act in the budgetary oversight role, the opportunity
for abuses of discretion regarding millions of dollars is real.2
2 Darrell Griffith, who served as the Executive Director of the KMSF from March
2006 to May 2014, states in his December 2015 affidavit that the KMSF was
responsible for collecting net revenue in excess of $200 million. Although no
4
The Faculty Council of the College of Medicine, 2013-14, was composed
of UK clinical physicians holding staff privileges at the University’s hospital and
non-medically licensed professors in the medical college. Dr. Kearney and
Professor Davy Jones, members of the Faculty Council, addressed that body at
a January 21, 2014 meeting about the PPC. Professor Jones relayed that
through open records requests he learned that the PPC had not met since its
creation in July 2009. The Faculty Council meeting minutes reflect Dr.
Kearney elaborated on Professor Jones’s presentation. Dr. Kearney, as a voting
practice plan member, made inquiries and obtained information confirming
there had never been a direct election for members of the PPC.3 After the
Faculty Council’s lengthy discussion of the PPC, the Faculty Council decided,
as a first step, to send recommendations to the Dean of the College, then Dr.
Frederick de Beer. In response, Dean de Beer sent a memo to the Faculty
Council informing it that then-Executive Vice President for Health Affairs
(EVPHA) Dr. Michael Karpf and General Counsel William Thro would like to
address the Faculty Council regarding a legal matter at its April meeting.
The Faculty Council met April 15, 2014. Dean de Beer, EVPHA Dr.
Karpf, General Counsel William Thro, and the faculty-elected trustee to the
University Board of Trustees, Dr. John Wilson, attended the meeting.
According to Dr. Kearney, he made two disclosures of wrongdoing at the April
timeframe is stated, Dr. Kearney’s summary judgment response indicates that Griffith
is referring to KMSF collecting annual revenues of $200 million.
3 The minutes reflect that a group of six faculty members was convened in
October 2013 and informed they constituted the PPC.
5
meeting. First, he reported the violation of AR 3:14, which governs the practice
plan and practice contracts that are signed with the physicians. Second, being
also concerned about mismanagement of KMSF funds, he spoke directly to
General Counsel Thro, stating, “I think we need to have an outside attorney,
somebody not affiliated with the university, look at the practice plan contracts
and how they were developed.” He then said, “I think we need an independent
audit of KMSF to look at the management of monies there.” Dr. Kearney
describes this statement being promptly followed by Dr. Karpf raising his voice,
pointing his finger at him, and saying, “Dr. Kearney, if you don’t like it here,
you can leave.” Dr. Kearney viewed this as a threat to fire him.
In the fall of 2014, Dr. Kearney was the subject of two new complaints
and the disciplinary action at issue in this case followed. In August 2014,
Dean de Beer suspended Dr. Kearney’s teaching duties following a student’s
complaint about a lecture filled with profanity and racist, sexist and other
offensive remarks. In September 2014, Dr. Bernard Boulanger, Chief Medical
Officer, suspended Dr. Kearney from clinical practice at the University’s
hospital because of a patient’s complaint.4 Dr. Kearney was placed on
administrative leave while the University investigated. Dr. Boulanger also
imposed an order prohibiting Dr. Kearney from communicating with UK
medical colleagues and banning Dr. Kearney from campus.
4 A quadriplegic patient’s mother stated that Dr. Kearney called her son “a
f**king quad,” a “f**king idiot,” and told a physician Dr. Kearney was supervising “just
f**king cut him.”
6
Dr. Kearney identifies his next disclosure as an email to UK Associate
General Counsel Cliff Iler on November 3, 2014, sent after Dr. Kearney was
placed on administrative leave. In that November communication, Dr.
Kearney, through his attorney, rejected UK’s offer to negotiate a severance
package. The email alleged that the most recent complaints against Dr.
Kearney were a contrived effort for the sole purpose of removing him from his
position in retaliation for “his public disclosure of Dr. Karpf’s impropriety i.e.,
attempting [to] gain control of KMSF practice plan funding contrary to
University regulations.”
After completion of the investigation and a resolution with Dr. Kearney
was not reached, Dr. Boulanger summarily suspended Dr. Kearney in January
2015, finding violations of both UK Healthcare Medical Staff Bylaws and the
Behavioral Standards in Patient Care Commitments to Performance. The
matter proceeded to the Medical Staff Executive Committee (MSEC), the self-
governing body of UK Healthcare’s medical staff, consisting of twelve
physicians. On January 29, 2015, the MSEC resolved to conduct an
independent investigation into the allegations against Dr. Kearney. Two of the
MSEC’s members were appointed to conduct the investigation, and on
February 5, 2015, they presented their findings to the full MSEC. The MSEC’s
investigators reviewed complaints from staff, students, and Dr. Kearney’s peers
concerning Dr. Kearney’s behavior dating back to 1992. They also interviewed
a number of individuals, including Dr. Kearney, concerning the patient
7
incident. In February 2015, the MSEC voted to affirm Dr. Kearney’s
suspension and recommended a revocation of clinical privileges.5
Dr. Kearney requested a hearing before a Fair Hearing Panel, a panel
composed of three of his medical staff colleagues. In a two-day hearing in late
May, the panel heard testimony and received exhibits. Dr. Kearney cross-
examined UK’s witnesses, called his own witnesses, and testified on his own
behalf. The panel issued a written decision unanimously concluding Dr.
Kearney violated both the UK Healthcare Medical Staff Bylaws and the
Behavioral Standards in Patient Care Commitments to Performance and
recommending revocation of his medical staff privileges.6
Dr. Kearney appealed this decision to UK’s Board of Trustees’ Health
Care Committee where three trustees were appointed to hear his appeal.
Following briefing and oral arguments, the trustee panel also unanimously
recommended permanent revocation of privileges. On August 24, 2015, the full
Health Care Committee unanimously affirmed the revocation of Dr. Kearney’s
clinical privileges but modified the Appellate Review Panel’s recommendation,
reaffirming Dr. Kearney’s status as a tenured faculty member. The Committee
stated that
the University will (1) allow Dr. Kearney to have access to campus;
(2) allow Dr. Kearney to have an office in an appropriate location;
(3) allow Dr. Kearney to communicate with his university
5 Dr. Kearney alleges that he was not notified and afforded the opportunity to be
at the MSEC hearing held the afternoon after he was interviewed. Dr. Kearney does
not raise due process claims.
6 The Report is undated but from internal references appears to have issued in
late June or early July 2015.
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colleagues; and (4) lift the suspension of Dr. Kearney’s university e-
mail account. Dr. Kearney’s access to campus will be no greater or
less than those of a tenured faculty member who lacks clinical
privileges. This reaffirmation should happen immediately.
At this point, Dr. Kearney remained a tenured faculty member. On
August 28, 2015, UK communicated through counsel that because Dr.
Kearney’s status had materially changed as a result of the Committee’s action,
at the direction of the University President a group of appropriate persons was
immediately formed to comprehensively define Dr. Kearney’s roles and
responsibilities going forward. UK acknowledged that to avoid confusion, Dr.
Kearney should have been informed that such a review was underway and that
it would communicate the results as soon as possible. UK stated that because
the Committee had reaffirmed his status as a tenured professor within the
College of Medicine, it was faced with the challenge of finding an appropriate
role for Dr. Kearney, given his unique status as a tenured faculty member in
the Department of Surgery who lacked clinical privileges.
Beginning with the August 2015 letter, UK communicated to Dr. Kearney
the limitations on his role at the University. According to UK, given the
requirement of the University’s accrediting body, without clinical privileges Dr.
Kearney could not teach in the College of Medicine.7 UK stated that because
Dr. Kearney’s status had materially changed, UK would continue to review
7 UK’s March 2016 letter to Dr. Kearney also stated that in preparing his
detailed plan for making future contributions to the University in general and for
becoming a productive researcher in particular, Dr. Kearney must recognize “because
of accreditation concerns and his previous behavior in a classroom setting[], he may
not interact with medical students or graduate medical students.”
9
every aspect of his employment, including his compensation. According to UK,
when its efforts to move Dr. Kearney into a productive research role, beginning
with his submission of a detailed plan, a so-called “Distribution of Effort,” were
not successful, Dr. Kearney’s salary was reduced. Dr. Kearney received his
reduced salary until he retired from the University in October 2019. Dr.
Kearney views his salary reduction as a continuation of the reprisals he
experienced, stating that others teach in the UK College of Medicine without a
medical degree or license to practice medicine.
Dr. Kearney filed his action against UK in Fayette Circuit Court on
February 12, 2015, while the proceedings regarding revocation of his clinical
privileges were well underway. Based upon a September 2014 order not to
communicate with UK,8 Dr. Kearney views his complaint and the Griffith
affidavit that was filed in the court record a year later, in February 2016, as
other disclosures of regulation violation, mismanagement, waste, and abuses of
authority by UK administration. In his affidavit, Darrell Griffith, the Executive
Director of KMSF from March 2006 to May 2014, identified certain KMSF
business dealings which Dr. Kearney views as mismanagement of funds.
These business dealings, for example, included the leasing of an airplane with
a separate agreement for the pilot. Griffith stated that KMSF exceeded its
8 Dr. Boulanger’s September 5, 2014 communication to Dr. Kearney regarding
the administrative leave stated, “All communications you have with the University will
be with me through my office.”
10
scope and described an alleged breach of the KMSF Board of Directors’
fiduciary duty to inform the UK Clinical Faculty of KMSF’s business activities.
After an unsuccessful motion to dismiss and the discovery period that
followed, in February 2018 the University moved for summary judgment. UK
argued that Dr. Kearney could not establish his comments at the April 15,
2014 Faculty Council meeting were a disclosure because all information
contained in Dr. Kearney’s complaints concerning AR 3:14 and the PPC was
either publicly known or publicly available information and the comments did
not reveal any violation of law or rule. UK argued particularly that the
comments concerning an alleged violation of an internal University regulation
are not protected under the KWA “because University regulations are not a
regulation of ‘the United States, the Commonwealth of Kentucky, or any of its
political subdivisions’ (i.e., counties).” UK posited that the complaint about the
PPC is nothing more than a complaint of allegedly deficient communication
among University employees, that is between PPC Board members and the
Faculty Council and/or other physicians who are plan members.
UK also argued that Dr. Kearney’s non-specific request for a KMSF audit
was too vague to constitute a report of either a violation of law or of
mismanagement, fraud or waste. In relation to the allegations of KMSF fund
mismanagement and KMSF’s breach of its fiduciary duty contained in Griffith’s
affidavit, UK asserted that the affidavit, filed in the record by Dr. Kearney in
February 2016 when responding to UK’s renewed motion to dismiss, is not a
disclosure related to the alleged retaliation because the University’s
11
disciplinary proceedings against Dr. Kearney concluded six months before the
affidavit was filed.9 During the hearing on the motion, Dr. Kearney disagreed
with the timing argument, asserting that the reprisals against him did not stop
when the full Health Care Committee unanimously affirmed the revocation of
his clinical privileges. He contended that the reprisals were ongoing, noting
among other actions, UK did not allow him to teach.
As to the November 3, 2014 email to the General Counsel’s office and Dr.
Kearney’s pleadings in this case being additional KWA reports, UK maintained
that none of these “reports” revealed concealed or publicly unknown
information. UK further contended that Dr. Kearney’s email, complaint, and
pleadings center on the same statements he made at the April 15, 2014 Faculty
Council meeting concerning AR 3:14, the PPC, and a general request for an
audit of KMSF.
In regard to Dr. Kearney’s allegation that he blew the whistle to then-
Dean of the College of Medicine, Dr. de Beer, then-EVPHA Dr. Karpf, UK
General Counsel Thro, and Trustee Dr. Wilson in April 2014, UK argued that
Dr. Kearney’s complaints were also not made to an appropriate body or
official.10 As for the April 2014 KMSF statements, UK maintained that since
9 UK made this argument in its summary judgment motion reply. In addition to
the April 2014 statements discussed in UK’s motion, Dr. Kearney’s response identified
disclosures made via the November 2014 email to UK’s General Counsel’s office, his
pleadings, and Griffith’s affidavit.
10 Given General Counsel Thro’s presence at the meeting, UK contended that
Pennyrile Allied Community Services, Inc. v. Rogers, 459 S.W.3d 339, 345 (Ky. 2015),
holding that a complaint during a staff meeting to the boss about the boss’s own
action was not a report to an appropriate authority, imposed a significant limitation on
Workforce Development Cabinet v. Gaines, 276 S.W.3d 789 (Ky. 2008). Gaines held
12
KMSF is an organization independent from the University, UK General Counsel
Thro is not an appropriate person for reporting complaints concerning KMSF.11
that a report to the general counsel’s office in the Workforce Development Cabinet may
constitute an internal disclosure.
11 Dr. Kearney’s complaint states:
The defendant university, by and through its authorized agents
including Dr. Michael Karpf has caused and continues to cause,
improper access to Kentucky Medical Service Foundation’s financial
resources. The Kentucky Medical Services Foundation is a non-profit
entity separate and apart from the university. The manner and method
employed by the defendant university to access the funds of the
Kentucky Medical Services Foundation were kept from public disclosure.
In his summary judgment response, explaining the allegations of UK’s
mismanagement of money generated by the UK Clinical physicians and the structure
through which that occurred, citing KMSF President Dr. Marcus Randall’s July 2016
deposition, Dr. Kearney stated: “As a non-profit, non-member 501[(c)(3)] corporation
KMSF maintains that it is not affiliated with the University of Kentucky [and is] thus
beyond the purview of the UK Board of Trustees.” Relatedly, Griffith’s affidavit states,
“During my tenure . . . [KMSF] operated as a private non-stock, nonprofit corporation
organized under the laws of the Commonwealth of Kentucky. As a non-stock,
nonprofit, private corporation[,] [KMSF] was not subject to Open Records Requests.”
Dr. Randall was questioned during his deposition about the Attorney General’s KMSF
“public agency” decision in an Open Records case and noted that the Attorney
General’s decision was being appealed.
When the trial court concluded that the KMSF was a private entity and
therefore UK administration was not the proper authority to remedy complaints
against KMSF, Dr. Kearney argued to the Court of Appeals that the trial court failed to
address the contractual relationship of KMSF, the UK Board of Trustees, and the
Dean’s Enrichment Fund and that by the terms of their contract, UK and KMSF are
inextricably intertwined. Dr. Kearney further argued that the contract between KMSF
and UK empowers the Board of Trustees to audit the books and accounts of KMSF
thereby squarely placing Trustee Dr. John Wilson as the “appropriate” person under
Gaines to address the disclosure regarding KMSF as well as the report of the AR 3:14
infraction.
At the point UK moved for summary judgment (February 8, 2018), the Kentucky
Attorney General had issued a decision, In re: Lachim Hatemi/Kentucky Medical
Services Foundation, Inc., 15-ORD-205 (Nov. 6, 2015), concluding that KMSF is a
public agency for open records purposes pursuant to KRS 61.870(1)(j) (defining “public
agency” as including any board, commission, committee, subcommittee, ad hoc
committee, advisory committee, council, or agency, except for a committee of a
hospital medical staff, established, created, and controlled by a public agency as
defined by the other paragraphs within KRS 61.870(1)). The Attorney General’s
decision is aptly summarized:
13
Because discussions between the “Office [of the President of the
University of Kentucky] and the administration of the College of Medicine
[relating to the implementation of the 1978 University Board of Trustees’
approval of ‘a geographic full-time medical service plan’] resulted in the
formation and incorporation of the Kentucky Medical Services
Foundation, Inc.,” the Foundation was “established [and] created” by the
University and its College of Medicine, both public agencies. Evidence
that the University and College of Medicine exercise extensive ongoing
“control” of the Foundation through their annual agreements with the
Foundation, under the terms of which the University’s and/or College of
Medicine’s approval is required before the Foundation can carry out its
business and affairs, supports the conclusion that the Foundation is a
public agency for open records purposes pursuant to KRS 61.870(1)(j).
Id. at *1 (internal footnote omitted) (brackets original).
Prior to that decision, in a 1982 advisory opinion, OAG 82-216, the Attorney
General opined that KMSF was not a public agency for open records purposes
pursuant to the part of the Open Records Act now codified at KRS 61.870(1)(h)
(defining “public agency” as including entities that received 25% or more of their
funding from state or local authority). The opinion did not address the application of
any other part of KRS 61.870(1)’s definitions of the term “public agency.” Id. at *2.
UK appealed Hatemi, id., filing suit December 4, 2015. By its order dated May
29, 2019, the Fayette Circuit Court, in Civil Action No. 15-CI-04417, consolidated with
Case Nos. 16-CI-01571, 16-CI-01572, and 16-CI-02474, other Hatemi/KMSF Open
Records Act cases, ruled that KMSF is a “public agency” subject to the Open Records
Act. UK appealed this decision to the Court of Appeals. The Court of Appeals’ cases
that presented the question whether KMSF is a “public agency” subject to the Open
Records Act were dismissed August 3, 2021. At the point Dr. Kearney filed his brief to
this Court, he noted that given the Circuit Court’s Open Records Act “public agency”
opinion, the trial court’s and the Court of Appeals’ rulings that KMSF is a private
corporation beyond the reach of the Whistleblower Act is not a foregone conclusion.
While we do not reach the question whether KMSF is a private corporation
beyond UK’s control, despite Dr. Kearney’s complaint describing the KMSF as a non-
profit entity separate and apart from UK, Dr. Kearney’s summary judgment response
indicates his disagreement with that characterization. It is unclear how the trial court
and the Court of Appeals concluded that the KMSF is a private entity and UK
administration is not an appropriate body to which reports regarding the need to audit
KMSF may be made. Like in the 2015 Attorney General Hatemi analysis, UK’s control
of KMSF would be relevant in an “appropriate body” whistleblower analysis. KMSF
being a private corporate entity does not necessarily exclude UK from effectively
controlling it. See, e.g., KRS 164A.550(3) (defining an “affiliated corporation” of a
postsecondary educational institution as being a corporate entity which is not a public
agency and which is organized pursuant to the provisions of KRS Chapter 273 over
which an institution exercises effective control, by means of appointments to its board
of directors, and which could not exist or effectively operate in the absence of
substantial assistance from an institution).
14
UK also argued that even beyond Dr. Kearney’s failure to engage in an activity
protected under the KWA, he cannot establish a causal connection between his
alleged disclosures and the disciplinary action taken against him.
The trial court granted UK summary judgment.12 On appeal to the Court
of Appeals, Dr. Kearney argued that the trial court erroneously found Professor
Jones to be the sole whistleblower, Professor Jones having made the initial
disclosure in January 2014; Dr. Kearney’s April 2014 disclosure to be a
“thought” rather than a disclosure; the report in April 2014 to be solely to the
wrongdoers and KMSF to be a private corporation which has no University
oversight. Dr. Kearney also argued that the trial court erred when it found that
the disclosure in his complaint was a “bare-bone” legal conclusion and that the
Griffith affidavit was filed after the personnel (disciplinary) action concluded.
Like the trial court, the Court of Appeals also concluded that none of Dr.
Kearney’s communications were protected disclosures under KRS 61.102,
agreeing with, and supplementing, the trial court’s reasoning.
Upon review, we affirm the trial court and the Court of Appeals.
Considering the content of the communications, and the timing of the filing of
Griffith’s affidavit in relation to the salary-related communications from UK, we
conclude summary judgment is proper. Because the content and timing
analyses resolve the matter, we do not reach the issues of whether Dr. Kearney
12 The motion for summary judgment was originally heard by Judge John
Reynolds, Fayette Circuit Court, Third Division. This case was subsequently
transferred to Judge Ernesto Scorsone, Fayette Circuit Court, Seventh Division.
Judge Scorsone held an additional hearing on the motion.
15
communicated the alleged wrongdoings to an appropriate authority and
whether KMSF is a private agency for which UK has no oversight.
ANALYSIS
The primary issue before this Court is whether the trial court and the
Court of Appeals correctly concluded that Dr. Kearney’s communications, as a
matter of law, are not the kind of disclosures covered by the KWA and thus Dr.
Kearney’s suit against the University must be dismissed. As noted, we find
summary judgment for UK was appropriate.
Kentucky Rule of Civil Procedure (CR) 56.03 authorizes summary
judgment “if the pleadings, depositions, answers to interrogatories, stipulations,
and admissions on file, together with the affidavits, if any, show 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.” Thus, summary judgment is designed to
expedite the disposition of a case when it is clear that a trial is unnecessary,
i.e., that a rational trier of fact could not return a verdict for the non-moving
party. Steelvest, 807 S.W.2d at 480, 482; Welch v. American Publ’g Co. of Ky.,
3 S.W.3d 724, 730 (Ky. 1999) (citing Steelvest, 807 S.W.2d at 482-83).
Determination that a fact is material or immaterial rests on the
substantive law’s identification of which facts are critical and which facts are
irrelevant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). But as
CR 56.03 reflects, the inquiry is not simply whether an issue of material fact
exists but what facts the parties are able to prove. See Steelvest, 807 S.W.2d
at 483; Barton v. Gas Serv. Co., 423 S.W.2d 902, 905 (Ky. 1968). An issue of
16
material fact is “genuine” at the summary judgment phase when discovery has
revealed facts which make it possible for the non-moving party to prevail at
trial. See Welch, 3 S.W.3d at 730. Because summary judgment is not a
substitute for trial, Steelvest, 807 S.W.2d at 483, it should not be granted
unless “it appears that it would be impossible for the respondent to produce
evidence at the trial warranting a judgment in his favor and against the
movant.” Paintsville Hosp. Co. v. Rose, 683 S.W.2d 255, 256 (Ky. 1985)
(quoting Roberson v. Lampton, 516 S.W.2d 838, 840 (Ky. 1974)); Perkins v.
Hausladen, 828 S.W.2d 652, 654 (Ky. 1992) (explaining that when determining
the “impossibil[ity] for the respondent to produce evidence” as recited in the
summary judgment standard, “impossible” is used in a practical sense, not in
an absolute sense). As framed by CR 56.03 then, the movant is entitled to
summary judgment when the movant points to evidence of record revealing
facts which show it is not possible for the adverse party to prevail. Welch, 3
S.W.3d at 730; see Paintsville, 683 S.W.2d at 256 (citing Kaze v. Compton, 283
S.W.2d 204 (Ky. 1955)).
The party moving for judgment bears the burden of establishing the
apparent non-existence of a genuine issue of material fact. Barton, 423 S.W.2d
at 905. The burden then shifts, and the party opposing summary judgment is
obligated to present at least some affirmative evidence to show that a material
issue of fact exists for a jury to consider. Steelvest, 807 S.W.2d at 482. If,
after having an ample opportunity to conduct discovery, a party opposing a
properly supported motion for summary judgment fails to controvert the
17
evidence supporting the motion, summary judgment is then proper as there
has been no showing of a genuine or real issue of material fact for trial.
Blankenship v. Collier, 302 S.W.3d 665, 668 (Ky. 2010). With evidence of
record being at the heart of a summary judgment decision, summary judgment
is proper when the non-movant relies on little more than “speculation and
supposition” to support his claims. See Blackstone Mining Co. v. Travelers Ins.
Co., 351 S.W.3d 193, 201 (Ky. 2010) (citing O’Bryan v. Cave, 202 S.W.3d 585,
588 (Ky. 2006)).
When reviewing a summary judgment on appeal, we consider whether
the trial court correctly found that there are no genuine issues of material fact
and the moving party is entitled to judgment as a matter of law. Inter–Tel
Techs., Inc. v. Linn Station Props., LLC, 360 S.W.3d 152, 165 (Ky. 2012); CR
56.03. Because we are only faced with questions of law, we review the opinion
of the Court of Appeals de novo. Id.I. The Trial Court Properly Granted Summary Judgment
A. The Kentucky Whistleblower Act
The KWA protects disclosures made by “a person acting on his own
behalf, or on behalf of another, who reported or is about to report, either
verbally or in writing, any matter set forth in KRS 61.102.” KRS 61.103(1)(a).
Along with describing the matter to which a report must relate in order to
qualify as a disclosure, KRS 61.102(1) identifies who must receive the
disclosure in order for the disclosure to be considered protected whistleblowing
activity. Under KRS 61.102(1),
18
No [governmental13] employer shall subject to reprisal, or
directly or indirectly use, or threaten to use, any official authority
or influence, in any manner whatsoever, which tends to
discourage, restrain, depress, dissuade, deter, prevent, interfere
with, coerce, or discriminate against any [governmental14]
employee who in good faith reports, discloses, divulges, or
otherwise brings to the attention of the Kentucky Legislative Ethics
Commission, the Attorney General, the Auditor of Public Accounts,
the Executive Branch Ethics Commission, the General Assembly of
the Commonwealth of Kentucky or any of its members or
employees, the Legislative Research Commission or any of its
committees, members or employees, the judiciary or any member
or employee of the judiciary, any law enforcement agency or its
employees, or any other appropriate body or authority, any facts or
information relative to an actual or suspected violation of any law,
statute, executive order, administrative regulation, mandate, rule,
or ordinance of the United States, the Commonwealth of Kentucky,
or any of its political subdivisions, or any facts or information
relative to actual or suspected mismanagement, waste, fraud,
abuse of authority, or a substantial and specific danger to public
health or safety. No employer shall require any employee to give
notice prior to making such a report, disclosure, or divulgence.
In short, the KWA protects governmental “employees who possess
knowledge of wrongdoing that is concealed or not publicly known, and who
step forward to help uncover and disclose that information.” Davidson v.
Commonwealth, Dep’t. of Military Affs., 152 S.W.3d 247, 255 (Ky. App. 2004)
(quoting Meuwissen v. Dep’t. of Interior, 234 F.3d 9, 13 (Fed. Cir. 2000)).
Because no party to this case disputes that UK is an employer and Dr. Kearney
is an employee within this statutory framework, in order for Dr. Kearney to
prevail on a KWA claim, it remains for him to prove that 1) he made or
attempted to make a good faith report or disclosure of a) facts or information
13 See KRS 61.101(2).
14 See KRS 61.101(1).
19
relative to an actual or suspected violation of any law, statute, executive order,
administrative regulation, mandate, rule, or ordinance, or b) any facts or
information relative to actual or suspected mismanagement, waste, fraud,
abuse of authority; 2) to an appropriate body or authority; and 3) UK acted to
punish him for making the disclosure or acted in a manner to discourage the
making of the disclosure. See Woodward v. Commonwealth, 984 S.W.2d 477,
480–81 (Ky. 1998).
Harper v. University of Louisville, 559 S.W.3d 796 (Ky. 2018), decided
three months after the trial court entered summary judgment in favor of UK, is
this Court’s most recent whistleblower decision analyzing disclosure content.
Harper, addressing directed verdict issues, summarizes several principles also
useful for determining whether Dr. Kearney’s communications are protected
whistleblower disclosures which may survive summary judgment. See id. at
802-03. First, “[t]he statute protects the whistleblower who exposes
information not generally known.” Id. at 802 (citing Moss v. Ky. State Univ.,
465 S.W.3d 457, 460 (Ky. App. 2014)). Second, when the disclosure is not
made to one of the entities listed within KRS 61.102(1), it must be made to an
“appropriate body or authority” which has the power to remedy or report the
perceived misconduct. Id. at 802-03 (citing Gaines, 276 S.W.3d at 793). Third,
an employee’s direct complaint to his supervisor concerning the supervisor’s
own wrongful conduct generally cannot qualify as a whistleblower disclosure.
Id. at 802 (citing Pennyrile, 459 S.W.3d at 345). And fourth, “the nature of the
information disclosed cannot simply be an expression of a policy disagreement
20
based upon the whistleblower’s subjective opinion; it must objectively meet the
criteria for the kinds of misconduct described in the KWA, such as actual or
suspected conduct . . . that objectively viewed constitutes waste or fraud.” Id.
at 803 (citing Lachance v. White, 174 F.3d 1378, 1381 (Fed. Cir. 1999)).
B. Claim Alleging Violation of Administrative Regulation
Dr. Kearney views his report of UK’s noncompliance with AR 3:14 as a
KRS 61.102(1) report of a “violation of any . . . administrative regulation.” UK,
however, argues that the University’s internal administrative regulation is not
the same kind or the substantive equivalent of an administrative regulation
that KRS 61.102(1) contemplates. Specifically, UK states that AR 3:14 is part
of internal university policy, setting rules and requirements within the
employment setting. Because KRS 61.102(1) does not define what exactly
qualifies as an administrative regulation, UK suggests, citing Bell v. Bell, 423
S.W.3d 219, 223 n.12 (Ky. 2014), that the ejusdem generis doctrine is the
statutory construction rule to resolve any ambiguity in the statute’s text. Dr.
Kearney agrees that the doctrine is the most appropriate statutory construction
rule to apply here but argues that no matter how one may categorize AR 3:14,
KRS 61.102(1) also makes “mandates” and “rules” subject to disclosure of
actual or suspected violations. He contends that because UK’s governing
Board of Trustees enacted this provision to mandate how the University must
be run, the University’s internal regulations carry the full weight of a mandate
or rule which can only be altered by the Board of Trustees.
21
When dealing with issues of statutory construction, we begin with the
plain text. “The cardinal rule in construing statutes is, if possible, to ascertain
the meaning of the Legislature from the language used, and if that be plain,
clear, and unambiguous, resort to collateral rules of construction is
unnecessary.” Mills v. City of Barbourville, 117 S.W.2d 187, 188 (Ky. 1938).
KRS 446.080(1) provides that “[a]ll statutes of this state shall be liberally
construed with a view to promote their objects and carry out the intent of the
legislature . . . .” KRS 446.080(4) further provides: “All words and phrases
shall be construed according to the common and approved usage of language,
but technical words and phrases, and such others as may have acquired a
peculiar and appropriate meaning in the law, shall be construed according to
such meaning.” When a statute is plain and unambiguous on its face, we are
not at liberty to construe the language otherwise. Whittaker v. McClure, 891
S.W.2d 80, 83 (Ky. 1995). “Our ultimate goal when reviewing and applying
statutes is to give effect to the intent of the General Assembly. We derive that
intent from the language the General Assembly chose, either as defined by the
General Assembly or as generally understood in the context of the matter
under consideration.” Commonwealth v. Wright, 415 S.W.3d 606, 609 (Ky.
2013). We are mindful that “statutes [like the KWA] which are remedial in
nature should be liberally construed in favor of their remedial purpose.”
Gaines, 276 S.W.3d at 792 (citing Kentucky Ins. Guar. Ass’n. v. Jeffers ex rel.
Jeffers, 13 S.W.3d 606, 611 (Ky. 2000)).
22
With its full text presented above, a reminder of KRS 61.102(1)’s
particularly pertinent content is sufficient here:
No employer shall subject to reprisal . . . any employee who in good
faith reports, discloses, divulges, or otherwise brings to the
attention of . . . [an] appropriate body or authority, any facts or
information relative to an actual or suspected violation of any law,
statute, executive order, administrative regulation, mandate, rule,
or ordinance of the United States, the Commonwealth of Kentucky,
or any of its political subdivisions . . . .
Unlike UK and Dr. Kearney, we do not find the ejusdem generis doctrine
applicable to the text at issue. Recently decided Harper provides an example of
the type of circumstance in which the doctrine does apply. Harper relied upon
the ejusdem generis doctrine to address whether the news media qualified as a
recipient of whistleblower information under the generic provision “or any other
appropriate body or authority.” 559 S.W.3d at 811. Harper, relying on
McCarty v. Covol Fuels No. 2, LLC, 476 S.W.3d 224, 235 (Ky. 2015), stated:
Our interpretation of the meaning of that phrase is guided by
the traditional rules of statutory construction, including the
ejusdem generis doctrine. Ejusdem generis is a rule providing that
where a generalization within a statute follows a list of specifically
designated subjects or classes of persons, the meaning of the
general words will be presumed to be restricted by the particular
designation and to include only things or persons of the same
kind, class, or nature as those specifically enumerated, unless
there is a clear manifestation of a contrary purpose.
559 S.W.3d at 811.
Because KRS 61.102(1) identifies specific bodies to whom a
whistleblower report may be given but then provides that a report may be made
to “any other appropriate body or authority,” the application of the doctrine
was clear in that case. Harper explained:
23
The statute plainly lists governmental units and employees within
each of the three branches of state government. As desirable as it
may be to include newspapers or journalists as repositories of
whistleblower reports, the private news media and media outlets
bear no resemblance to the class of entities stated in the statute so
as to constitute an “appropriate body or authority.”
559 S.W.3d at 811.
Because the statute plainly and specifically states that it is applicable to
Kentucky’s or any of its political subdivisions’ administrative regulations, we do
not find the ejusdem generis doctrine particularly helpful. Rather, the issue
presented here is whether UK’s “administrative regulation,” AR 3:14, is an
“administrative regulation” to which KRS 61.102(1) applies.
UK asserts that because KRS 61.102(1) refers to a “law, statute,
executive order, administrative regulation, mandate, rule, or ordinance,” of the
United States, Kentucky or a Kentucky political subdivision, the KWA applies
to requirements that are implemented by lawmaking authorities in their
lawmaking capacities and have the force of law. UK argues that KRS 61.102(1)
does not list, and is clearly not applicable to, internal policies, even those that
are labeled an “administrative regulation,” like UK’s AR 3:14. While we have
generally described KRS 61.102(1)’s underlying dual purpose as “to discourage
wrongdoing in government, and protect those who make [such wrongdoing]
public,” see e.g., Gaines, 276 S.W.3d at 792, and as dealing with “violations of
law,” see e.g., Knott Cnty. Bd. of Educ. v. Patton, 415 S.W.3d 51, 55 (Ky. 2013),
we have never dealt with the specific scope of an “administrative regulation”
within KRS 61.102(1).
24
Although it is clear that proper KWA violation reporting goes beyond
legislative branch enactments because KRS 61.102(1) also applies to formally
created legal directives issued by the executive branch, i.e., executive orders, it
is safe to say that some terms used in the statute, i.e., “law,” “statute,”—and
perhaps “ordinance”—are also commonly recognized by the general public as
legislative enactments. Although that may not be so for an “administrative
regulation,” the term “administrative regulation” likewise has a “peculiar”
meaning in law, being used within the branch of law often referred to as
administrative law. Administrative law is understood as the “law governing the
organization and operation of administrative agencies . . . and the relations of
administrative agencies with the legislature, the executive, the judiciary, and
the public.” Black’s Law Dictionary (11th ed. 2019). Simply described,
administrative law consists of: “(1) the statutes endowing agencies with powers
and establishing rules of substantive law relating to those powers; [and] (2) the
body of agency-made law, consisting of administrative rules, regulations,
reports, or opinions . . . .” Id.15 An officially promulgated administrative
regulation is generally recognized as having the force of law and as typically
elaborating the requirements of a law or policy. Id. (see “administrative rule”).
KRS Chapter 13A contains Kentucky’s statutes regarding the creation of
administrative regulations. Given “administrative regulation” has special
meaning in the law as codified in KRS Chapter 13A, we must conclude that
15 Black’s Law Dictionary describes the third part of “administrative law” as “the
legal principles governing the acts of public agents when those acts conflict with
private rights.” Id.25
KRS 61.102(1) refers to an administrative regulation duly promulgated under
KRS Chapter 13A, rather than merely an internal administrative rule.
We turn to KRS Chapter 13A, KRS Chapter 164A, and the Kentucky
Administrative Regulations (KAR) to determine if UK’s AR 3:14 is an
administrative regulation recognized by KRS 61.102(1). KRS Chapter 13A,
governing the Commonwealth’s creation of administrative regulations, defines
a) who may promulgate an administrative regulation and b) what a regulation
is and is not. KRS Chapter 164A contains statutes related to higher education
finance. Finally, the KAR is the compilation of regulations which have been
authorized by statute and which follow the rule-making process.
KRS 13A.010(1) defines an “administrative body” as meaning “each state
board, bureau, cabinet, commission, department, authority, officer, or other
entity, except the General Assembly and the Court of Justice, authorized by
law to promulgate administrative regulations.” KRS 13A.010(2) then defines
“administrative regulation” as meaning “each statement of general applicability
promulgated by an administrative body that implements, interprets, or
prescribes law or policy, or describes the organization, procedure, or practice
requirements of any administrative body.” After explaining that “the term
includes an existing administrative regulation, a new administrative regulation,
an emergency administrative regulation, an administrative regulation in
contemplation of a statute, and the amendment or repeal of an existing
administrative regulation,” it pertinently describes things which are not
administrative regulations. An administrative regulation does not include
26
“[s]tatements concerning only the internal management of an administrative
body and not affecting private rights or procedures available to the public,”
KRS 131.010(2)(a), or the “[r]ules, regulations, and policies of the governing
boards of institutions that make up the postsecondary education system
defined in KRS 164.001[16] pertaining to students attending or applicants to the
institutions, to faculty and staff of the respective institutions, or to the control
and maintenance of land and buildings occupied by the respective
institutions,” KRS 131.010(2)(e).
KRS 13A.120(1)(a) provides that “[a]n administrative body may
promulgate administrative regulations to implement a statute only when the
act of the General Assembly creating or amending the statute specifically
authorizes the promulgation of administrative regulations or administrative
regulations are required by federal law.” Within KRS Chapter 164A there is a
section related to the financial management of institutions of higher education,
KRS 164A.555 to 164A.630. KRS 164A.560 states:
(1) The governing boards of the postsecondary educational
institutions electing to perform in accordance with KRS 164A.555
to 164A.630 regarding the acquisition of funds, accounting,
purchasing, capital construction, and affiliated corporations[17,18]
16 This includes the University of Kentucky Board of Trustees.
17 KRS 164A.550(3) defines an “affiliated corporation” as a
corporate entity which is not a public agency and which is organized
pursuant to the provisions of KRS Chapter 273 over which an institution
exercises effective control, by means of appointments to its board of
directors, and which could not exist or effectively operate in the absence
of substantial assistance from an institution.
18 KRS 164A.610, detailing the organization and operation of affiliated
corporations, states:
27
shall do so by regulation. The responsibility for this election is
vested with the governing boards, any other statute to the contrary
notwithstanding. The governing board may delegate these
responsibilities by regulation to appropriate officials of the
institution. . . .
(2) The governing boards of institutions may elect to receive,
deposit, collect, retain, invest, disburse, and account for all funds
received or due from any source including, but not limited to, state
and federal appropriations for the support or maintenance of the
general operations or special purpose activities of such
institutions. In the event of such election by the governing board:
(1) An institution may organize and operate one (1) or more affiliated
corporations to assist it in carrying out its programs, missions or other
functions. A qualified firm of certified public accountants experienced in
the auditing of colleges and universities and their affiliated corporations
shall be engaged to conduct an annual examination of the corporation’s
financial statements in accord with generally accepted auditing
standards for the purpose of rendering an independent opinion thereon
and preparing a report of findings and recommendations concerning
appropriate accounting controls and compliance with applicable statutes.
The affiliated corporation shall adhere to the principles of accounting and
purchasing used by the institution with which it is affiliated.
(2) The affiliated corporation shall provide the institution with an
accounting at least quarterly, of all income and expenditures of said
corporation in connection with contracts or grants with entities external
to the institution and the corporation, for the conduct of research or
other projects carried out, in whole or in part, through the use of
institutional facilities or personnel.
(3) The affiliated corporation shall pay to, or for the benefit of, the
institution any and all funds received by it from any person, corporation,
association or governmental agency external to the institution and the
affiliated corporation as reimbursement for indirect expenses incurred by
the institution in carrying out research or furnishing other goods or
services, deducting from such payments only the expenses attributable
to the procurement and performance of research grants and contracts
and other contracts for the provision of such goods and services and
such sums as may be essential to meet contractual obligations incurred
at the request of the institution’s governing board.
As reflected in 765 KAR 1:070, UK has elected to organize and operate
one or more affiliated corporations in accordance with KRS 162A.610. See n.20
below.
28
(a) The treasurer of the institution shall deposit on a timely
basis all tuition fees, fees for room and board, incidental
fees, contributions, gifts, donations, devises, state and
federal appropriations, moneys received from sales and
services, admittance fees, and all other moneys received from
any source, in a depository bank or banks designated by the
governing board.
(b) The governing board shall promulgate rules and
regulations limiting disbursements to the amounts and
for the purposes for which state appropriations have
been made, or for which other moneys have been
received. All disbursements shall be recorded in a system
of accounts as set forth in KRS 164A.555 to 164A.630. The
treasurer of each institution shall prescribe forms to be used
with the system of accounts, and no treasurer shall approve
any disbursement document unless he determines that the
disbursement is to satisfy a liability of the institution
incurred for authorized purposes and that the disbursement
is to be made from the unexpended balance of a proper
allotment.
(Emphasis added.)
Under this statute it is clear that the General Assembly recognized UK as
an administrative body authorized to promulgate its own particular
administrative regulations. Title 765 of the KAR contains promulgated
regulations for UK. The seven regulations within Chapter 1, Board of Trustees,
are respectively entitled 765 KAR 1:010. Acquisition and disbursement of
funds, accounting system – records and annual report;19 765 KAR 1:020.
19 765 KAR 1:010 states:
RELATES TO: KRS 164A.560, 164A.565
STATUTORY AUTHORITY: KRS 164A.560
NECESSITY, FUNCTION, AND CONFORMITY: The governing boards of
the public institutions of higher education may elect to perform the
financial management functions of KRS 164A.555 to 164A.630 by
issuing administrative regulations to do so. This administrative
29
Delegation of financial management responsibility; 765 KAR 1:030. Annual
audit; 765 KAR 1:040. Purchase – inventories – sales of surplus property –
capital construction procedures; 765 KAR 1:050. Issuance of bonds; 765 KAR
1:060. Fund for excellence; and 765 KAR 1:070. Affiliated corporations.20 Thus
regulation implements the provisions of KRS 164A.560 and 164A.565 at
the University of Kentucky.
Section 1. The University of Kentucky Board of Trustees elects to perform
the financial management functions set forth in KRS 164A.560, Section
(2), related to the receipt, deposit, collection, retention, investment,
disbursement, and accounting of all funds; and KRS 164A.565 related to
the installation of and accrual basis accounting system, other records
and annual reports.
Section 2. The University of Kentucky Board of Trustees elects to comply
with KRS 164A.560, Section (2)(b) to limit disbursements to the accounts
and for the purposes for which the state appropriations, or other monies
have been received for through the enacting resolution of the institution’s
annual operating budget.
Section 3. The University of Kentucky Board of Trustees shall use an
accrual basis accounting system and fund structure that conforms with
generally accepted accounting principles and procedures established for
colleges and universities by the National Association of College and
University Business Officers and the American Institute of Certified
Public Accountants, and shall act to ensure further compliance with
Sections (2), (3), (6), (7), and (8) of KRS 164A.565.
20 765 KAR 1:070 states:
RELATES TO: KRS 164A.610
STATUTORY AUTHORITY: KRS 164A.560
NECESSITY, FUNCTION, AND CONFORMITY: The governing boards of
the public institutions of higher education may elect to perform the
financial management functions of KRS 164A.555 to 164A.630 by
issuing administrative regulations to do so. This administrative
regulation implements the provision of KRS 164A.610 at the University of
Kentucky.
Section 1. The University of Kentucky Board of Trustees, under the
provisions of KRS 164A.560, elects to organize and operate one (1) or
more affiliated corporations in accordance with KRS 164A.610.
30
under the KWA, Dr. Kearney’s “administrative regulation” claim must be
premised on these promulgated regulations.21 Because it is not evident that
any of these Kentucky Administrative Regulations were violated by UK’s alleged
failure to adhere to AR 3.14, we must conclude that Dr. Kearney’s
“administrative regulation” communication is not a covered disclosure under
KRS 61.102(1). As to Dr. Kearney’s cursory argument22 that AR 3:14 is a
mandate or rule under KRS 61.102(1), because the General Assembly limits
administrative regulations which UK may implement through enabling
statutes, we believe similar restrictions must exist for instruments referred to
as “mandates” or “rules.”23 Although a university is not commonly recognized
as issuing “mandates,” currently, a UK “mandate” or “rule” subject to KRS
61.102(1) is in the form of an “administrative regulation,” i.e., a KAR. Given
our interpretation of KRS 61.102(1), as a matter of law, we must conclude
summary judgment in favor of UK on Dr. Kearney’s AR 3:14 communication is
proper.
C. Claim Alleging Fund Mismanagement: April 2014 Meeting
Turning to the April 2014 communication regarding KMSF, the trial
court and the Court of Appeals agreed that Dr. Kearney communicated vaguely
the “thought” that KMSF needed an audit and did not convey any intent to
21 Because an administrative regulation originates from an enabling statute, a
claim may also properly arise from that statute.
22 The argument consists of three sentences in the reply brief describing AR
3:14 as a mandate or rule.
23 An “administrative regulation” may be referred to as a “rule” written by an
agency. Black’s Law Dictionary (11th ed. 2019) (see “administrative rule”).
31
expose wrongdoing otherwise concealed. Both courts cite Pennyrile as
authority for their respective decisions.
In Pennyrile, we explained,
Each of the words used in the statute to denote the protected
conduct of the employee, “reports, discloses, divulges, or otherwise
brings to the attention of . . .” describes behavior that brings to
light facts not otherwise known to the recipient. . . . The phrases
“in good faith” and “brings to the attention of” clearly denote[] an
intent on the part of the employee to reveal or impart what is
known to the employee to someone else who lacks that knowledge
and, as further discussed below, is in a position to do something
about it.
459 S.W.3d at 345.
Dr. Kearney cites Harper for the premise that opinion disclosures of
suspected waste, mismanagement or abuse of authority are protected under
the KWA and cannot be recast as “personal opinions” so as to defeat the Act’s
protection. Dr. Kearney contends that likewise, viewing the evidence in a light
most favorable to him, it was erroneous for the trial court to recast his
disclosure as a thought when Dr. Karpf’s threat reflected that he, then-UK
EVPHA, got the message that Dr. Kearney suspected waste and
mismanagement of KMSF funds, amounting to a disclosure of that suspicion.
Dr. Kearney also argues that Dr. Karpf’s threat shut down Dr. Kearney’s
attempted disclosure, one that would later be fleshed out in the November
2014 email to UK Associate General Counsel Iler, which listed the unlawful
reprisals taken against Dr. Kearney up to that point.
Harper states the rule that “the nature of the information disclosed . . .
must objectively meet the criteria for the kinds of misconduct described in the
32
KWA, such as actual or suspected conduct that violates a law or administrative
regulation or conduct that objectively viewed constitutes waste or fraud.” 559
S.W.3d at 803. In Harper, a jury agreed that Harper’s job was eliminated in
retaliation for her numerous complaints to University of Louisville (UofL)
officials about suspected wasteful spending. Id. at 800. One disclosure at
issue involved UofL’s spending on a commercial. Id. at 805. In keeping with
her knowledge and experience, Harper reported a concern that an advertising
agency’s quote of $100,000 for the commercial was too high and out of line
with industry norms for that type of project and provided a recent comparison
of $50,000 being spent on a similar commercial. Id. Harper expressed concern
that an overpayment of that magnitude would waste taxpayer dollars,
especially when UofL’s programs were being cut back because of budget
constraints. Id. This Court disagreed with the Court of Appeals and concluded
that Harper’s disclosure, while perhaps an opinion, was objectively based and
that information was relayed to an appropriate UofL official; consequently KRS
61.102’s disclosure requirements were met. Id. at 806-07.
Harper’s disclosure stands in stark contrast to Dr. Kearney’s statements
made at the April 2014 meeting about the need to audit KMSF. Although not
discussing the text of KRS 61.102 which conveys that the disclosure must be
objectively based, that is, based upon “facts or information relative to actual or
suspected mismanagement, waste, fraud, abuse of authority,” the rule
expressed in Harper aligns with the statutory text. Here, unlike in Harper, Dr.
Kearney relayed no objective fact or information supporting the suggestion of
33
misconduct, instead simply saying he thought “we need an independent audit
of KMSF.” Stated differently, Dr. Kearney did not identify or report certain
University actions upon which it was clear he was blowing the whistle. Dr.
Kearney, to a certain extent, recognizes this in his argument that he was cut off
by Dr. Karpf in that attempted disclosure, but insists he completed the
disclosure in the November 2014 email. We conclude that Dr. Kearney’s
requests for an audit of KMSF, viewed individually or collectively, are not
protected disclosures under KRS 61.102.
D. Claim Alleging Fund Mismanagement: November 2014
Email
The trial court and the Court of Appeals concluded that the November 3,
2014 email was not a report to an appropriate body who could remedy the
alleged violation because it was sent to UK’s General Counsel office and
General Counsel is “alleged to have been involved in the retaliation of which
[Dr. Kearney] initially complained from the beginning.” As such, Dr. Kearney
was not reporting to an entity that lacked the knowledge of the suspected
violation.24 Because we have already determined that the contents of the April
2014 communications do not qualify as protected disclosures, we turn to UK’s
summary judgment argument that the email is a reiteration of previously
reported allegations. Having concluded that Dr. Kearney’s communication
24 In its summary judgment reply, UK disagreed with Dr. Kearney labeling his
email as a report because the email was not sent to anyone unaware of Dr. Kearney’s
April 2014 comments; that is, the email was sent to the University’s General Counsel
office and General Counsel was present at the April 2014 meeting.
34
concerning AR 3:14 and the unspecified need for an audit of KMSF do not
qualify as protected disclosures, we likewise do not view the content of the
email to the General Counsel’s office as meeting the disclosure requirement.
Although Dr. Kearney views the email as publicly disclosing “Dr. Karpf’s
impropriety i.e., attempting [to] gain control of KMSF practice plan funding
contrary to University regulations,” the email refers only to violation of UK’s
internal administrative regulation, not a KAR, and perhaps generally (and
vaguely), KMSF fund mismanagement. In sum, the email content is not a
protected statement under KRS 61.102(1).
E. Claim Alleging Violation of Administrative Regulation and
Fund Mismanagement: Pleadings and Griffith Affidavit
The trial court and Court of Appeals concluded that the complaint
allegation is a bare-bone reiteration of the April 15, 2014 Faculty Council
meeting report and as a reiteration of an earlier report fails to be the initial
report as required by Moss. In regard to the Griffith affidavit, the trial court
and the Court of Appeals agreed with UK that chronologically the affidavit filed
February 2016 cannot be a report because it came after the alleged retaliation
occurred; Dr. Kearney’s disciplinary appeals concluded in August 2015.
In the face of the April 2014 and November 2014 communications being
rejected as protected disclosures by the lower courts under Moss and Pennyrile
because they were not initial disclosures25 and were not made to an
25 The trial court and the Court of Appeals, going beyond UK’s summary
judgment arguments, found that the Faculty Council’s January 2014 discussion was a
disclosure. In particular, the trial court gleaned that Professor Jones was the person
at the January meeting reporting that the PPC had not met since its creation in 2009,
35
appropriate authority, Dr. Kearney cites Davidson and pivots to argue that his
complaint and Griffith’s affidavit, also part of the court record, are disclosures
to an appropriate person, i.e., the judiciary, and there is no evidence the
judiciary had prior knowledge of the misconduct reported by Dr. Kearney. Dr.
Kearney contends that his reporting behavior followed Pennyrile’s guidance and
he made the effort to bring his claim to the attention of someone with the
power to remedy the mismanagement reported in his pleading. He contends
that the lower courts erroneously applied Pennyrile when rejecting the
disclosures made in the case record as protected because they were not an
“initial report.” Notably, UK’s discussion of Pennyrile and Moss in its brief
agrees with Dr. Kearney’s overall point as to the lower court’s interpretation of
despite the fact that conditions had occurred requiring the PPC to meet. The trial
court then, assuming the Faculty Council is a valid authority under the circumstances
of this case to whom a disclosure could be made (although it was not in dispute that
the Faculty Council did not have such authority), considered that it was Professor
Jones, not Dr. Kearney, who made the initial report. Relying on Moss, the trial court
then concluded that the PPC disclosure was not a protected disclosure. The Court of
Appeals, on the other hand, concluded there were other reasons that the statements
made during the January 2014 meeting were not protected disclosures. First, relying
on Pennyrile, the Court of Appeals reasoned that since Dr. Kearney and Professor
Jones’ statements were recorded in the meeting minutes, they were available and
known to Dean de Beer, General Counsel Thro, and Dr. Wilson. Second, since the
PPC was not required to meet at any set date or regularity, the statement that it had
not met since 2009 was not an accusation of wrongdoing.
In response to the trial court’s analysis, Dr. Kearney argued in his Court of
Appeals’ brief that Moss does not hold that the first in-time disclosure trumps
subsequent disclosure but stands for the proposition that a disclosure of that which is
widely or publicly known does not fall within the Whistleblower Act. But, Dr. Kearney
argued, if Professor Jones’s January disclosure falls within the Act as the trial court
suggests, so does Dr. Kearney’s January disclosure under KRS 61.102(2) since Dr.
Kearney aided and supported Professor Jones. Unsurprisingly, Dr. Kearney continues
to cite KRS 61.102(2)’s “supports, aids, or substantiates” provision to this Court.
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these cases.26 Although we do not rely on Pennyrile and Moss in our analysis
of Dr. Kearney’s complaint and the Griffith affidavit as disclosures, we take this
opportunity to clarify any confusion arising from the Court of Appeals’ opinion.
As described earlier, Moss holds that the KWA protects the whistleblower who
exposes information not generally known, and Pennyrile holds that an
employee’s direct complaint to his supervisor concerning the supervisor’s own
wrongful conduct generally cannot qualify as a whistleblower disclosure.
In Moss, Moss was employed in an accounting position with Kentucky
State University (KSU). 465 S.W.3d at 458. Her claims of alleged waste and
mismanagement stemmed from a job assignment; Napier, Moss’s supervisor,
assigned Moss the job of reconciling accounts receivable, a task Moss claimed
was impossible because the accounts had been unbalanced for many years.
Id. Moss claimed that her taxpayer-funded salary was wasted when she was
tasked with solving the unsolvable problem of reconciling KSU’s accounts
26 UK states:
Again, the rationale underlying Pennyrile presumes the reported
misconduct is unknown to others beside the wrongdoer. An employee
whose initial report discloses the misconduct to the wrongdoer can still
expose the information by making subsequent report to someone else
with authority to remedy the issue. The subsequent report in that
instance, since it exposes information that had continued to be
unknown, qualifies for whistleblower protection, even though it was not
the employee’s initial report. The same analysis, however, does not
extend to subsequent reports addressing “generally known” information
as in Moss . . . . Reports regarding generally known information—
regardless whether the information was reported once, twice, or more—
are not exposing any misconduct to further the law’s purpose and do not
qualify for whistleblower protection for that reason.
UK, however, goes on to state that Dr. Kearney’s focus on Pennyrile was
misplaced because the rulings below in denying whistleblower protection to Dr.
Kearney’s civil complaint were based on Moss, not Pennyrile.
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receivable. Id. The Court of Appeals concluded that Moss’s complaint did not
fall under the Whistleblower Act because KSU “was already aware of the
problems with reconciling their accounts receivable and financial statements
when Moss reported these issues. [KSU] was attempting to address this
accounting problem, and thus Moss’s complaints were hardly an initial report.”
Id. at 460.
In Pennyrile, Rogers was employed by Pennyrile Allied Community
Services, Inc. (PACS), a government program focused on rural development.
459 S.W.3d at 341. As part of her job, Rogers went to schools and made
presentations. Id. Gibbs, Rogers’ supervisor, went to Rogers’ home to verify
that Rogers was working, rather than spending the day at home. Id. This
Court concluded that Rogers’ subsequent visit to a deputy sheriff during which
she asked questions concerning property and privacy rights, and during which
she did not mention her supervisor, was not a disclosure under KRS 61.102.
Id. at 344-45. Then, when considering whether Rogers’ complaint to Gibbs
during a PACS meeting about his visit to her home constituted an “internal
disclosure,” we again reached the conclusion that Rogers did not make a
disclosure under KRS 61.102. Id. at 345. First, because Gibbs was well aware
of Rogers’ complaint, Rogers was not bringing to light facts not otherwise
known to the recipient, and second, because there was no one at the meeting
with supervisory authority over Gibbs, Rogers could not have been addressing
the comments to someone in a position to bring corrective action. Id. We
noted that “Rogers made no effort to bring her claim to the attention of anyone
38
with the power to remedy or report Gibbs’s behavior” and concluded that “[a]n
otherwise at-will employee cannot gain whistleblower status, and the
protections that come with that status, by simply complaining to her boss
about what she perceives as his misconduct.” Id. at 346.
In its opinion in this case, the Court of Appeals stated:
In order to be protected under KRS 61.102, an alleged disclosure
must be an initial report, not repeated or subsequent reports. See
Moss v. Kentucky State University, 465 S.W.3d 457, 460 (Ky. App.
2014); Pennyrile, 459 S.W.3d at 345 (tacitly recognizing that
repeated disclosures are not protected under the Whistleblower Act
since KRS 61.103(1)(a) requires a disclosure “bring[] to light facts
not otherwise known to the recipient”).
Simply put, we do not read Moss or Pennyrile as foreclosing a repeated or
subsequent report from ever being a disclosure under the KWA. Depending on
the circumstances, a repeated report up the chain of command or to another
appropriate authority who could remedy the complaint may qualify as a
disclosure.
Returning to the content of the complaint, Dr. Kearney alleges he
disclosed to UK officials in attendance at the April 2014 meeting, along with
other Faculty Council members, that UK officials violated University AR 3:14,
by failing to create a functioning PPC for a period of four years. He also alleges
that he requested an independent audit of KMSF as well as an outside
investigation by an independent law firm. He further alleges that university
administrators, particularly Dr. Karpf, were mismanaging KMSF funds in
violation of university regulations, in an abuse of their authority and in
violation of law. Because we found in the preceding analysis that the April
39
2014 meeting statements, and similarly the November 2014 email statements,
do not meet KRS 61.102(1) disclosure requirements, we likewise conclude that
Dr. Kearney’s complaint, its allegations relying on the April and November
statements, does not meet KRS 61.102(1) disclosure requirements. Hence,
without Dr. Kearney making protected disclosures, Dr. Kearney’s loss of
clinical privileges cannot be viewed as retaliation under the KWA.
Consequently, the only question remaining is whether there is a genuine issue
of material fact under the KWA related to the Griffith affidavit.
The Griffith affidavit filed in the court record is different from Dr.
Kearney’s complaint allegations. Griffith provided detailed spending
information as to KMSF funds, such as the financing of the Child Development
Center’s new building and its annual operating expenses in excess of $100,000
and loaning the Center a sum in excess of $5 million; loaning a pharmaceutical
company in excess of $400,000; and as mentioned earlier, leasing a plane and
contracting for a pilot’s services. While the affidavit may be considered
objective support of alleged misconduct, here, we conclude that even if Dr.
Kearney made a report to an appropriate authority through the placement of
Griffith’s affidavit into the court record, a genuine issue of material fact does
not exist as to the affidavit disclosure being a contributing factor in Dr.
Kearney’s salary reduction.27
27 Although Dr. Kearney maintains his amended complaint was a part of the
disclosure leading to UK’s retaliation, Dr. Kearney experienced the pay cut before the
amended complaint was filed in September 2016.
40
Under the KWA, any covered disclosure must be shown by a
preponderance of the evidence to be a contributing factor in the personnel
action. KRS 61.103(3). KRS 61.103(1)(b) defines “contributing factor” as “any
factor which, alone or in connection with other factors, tends to affect in any
way the outcome of a decision.” KRS 61.103(1)(b) further provides that “[i]t
shall be presumed there existed a ‘contributing factor’ if the official taking the
action knew or had constructive knowledge of the disclosure and acted within a
limited period of time so that a reasonable person would conclude the
disclosure was a factor in the personnel action.”
Once a prima facie case of reprisal has been established and
disclosure determined to be a contributing factor to the personnel
action, the burden of proof shall be on the agency to prove by clear
and convincing evidence that the disclosure was not a material fact
in the personnel action.
KRS 61.103(3).
Dr. Kearney points out that three months after he filed the Griffith
affidavit, UK reduced his salary substantially, which he views as evidence that
reprisals continued against him. Dr. Kearney states that because Dean de
Beer and General Counsel Thro had either actual or constructive knowledge of
the Griffith affidavit disclosure, and his pay was cut a short time after he
placed the affidavit in the court record, he enjoys the presumption under KRS
61.103(1)(b) that the filing of the affidavit was a “contributing factor” in the pay
cut, an adverse job action. UK, on the other hand, responds that Dr. Kearney
improperly fails to account for all the facts leading up to the pay cut, facts
which undercut any potential whistleblower claim. UK details that when the
41
affidavit was filed in February 2016, a review of Dr. Kearney’s compensation in
light of his reduced duties was “in the works.”
The disciplinary proceeding against Dr. Kearney concluded August 24,
2015. General Counsel Thro communicated with Dr. Kearney in writing
August 28, 2015, and among other things, advised that his compensation was
under review. UK sent additional letters on October 24, 2015;28 November 11,
2015;29 and December 23, 2015,30 all before Dr. Kearney filed Griffith’s
affidavit in the court record on February 10, 2016. UK then sent other letters
28 The October 24, 2015 letter, discussing employment options, stated that Dr.
Kearney would have to undertake research and service activities as a full-time tenured
faculty member sufficient to justify his then annual salary of $350,000. UK stated to
that end, the College of Medicine Dean was prepared to work with Dr. Kearney so that
he would be positioned to do so, including facilitating his ability to generate external
research dollars. The letter continued, stating, that because Dr. Kearney’s duties no
longer included teaching or generating clinical income for the University, his base
salary likely would have to be adjusted to reflect his existing and potential
contributions to the University’s missions and the University would keep him informed
as any decisions were made.
29 The November 11, 2015 letter stated that because Dr. Kearney no longer had
clinical privileges, it was necessary to redefine Dr. Kearney’s “Distribution of Effort.”
Reiterating the University’s willingness to work with Dr. Kearney to position him for
success as a funded researcher, the letter informed Dr. Kearney that in advance of a
meeting with Dean de Beer he should submit to the Dean by December 1 a detailed
plan for making future contributions to the University in general and for becoming a
productive researcher in particular. The letter then stated, “Of course, Dr. Kearney’s
salary in both the short- and long-term will reflect his research and service
contributions.”
30 The December 23, 2015 letter stated that when Dean de Beer met with Dr.
Kearney on December 10, Dr. Kearney informed the Dean he would not comply with
the request to submit a detailed plan and his lawyer would be responding. The
University explained that tenured faculty members are expected to make significant
contributions to the University and to work with their Dean to develop a distribution of
effort. The University stated its expectation for Dr. Kearney to submit to the Dean by
January 18, 2016 a detailed plan for making future contributions to the University in
general and for becoming a productive researcher in particular. The University stated
that if Dr. Kearney failed to do so, it would immediately review his salary and his
status as a tenured faculty member.
42
on February 17, 201631 and March 24, 2016,32 to establish Dr. Kearney’s new
role at UK. Dr. Kearney contends that he submitted research and service plans
that were rebuffed by Dean de Beer. UK on the other hand, states that Dr.
Kearney did not engage in these efforts and failed to provide a sufficient plan,
and UK sent notice of his salary reduction on April 20, 2016.33
We agree with UK that its consistent communications to Dr. Kearney
about salary adjustment and research funding expectations before and after
the filing of the affidavit totally undermine KRS 61.103(1)(b)’s “contributing
factor” presumption. Cf. Harper, 559 S.W.3d at 804 (holding that Harper
31 The February 17, 2016 letter was limited to a discussion of Dr. Kearney’s
salary. It stated that because Dr. Kearney no longer generates clinical income for the
University, Dr. Kearney’s salary should reflect his expected contributions as a M.D.
who holds an appointment as a regular title series tenured professor in a basic science
department of the College of Medicine and advised that the Provost had accepted the
$133,713 salary recommended by the Dean for Dr. Kearney, and that Dr. Kearney’s
reduced salary would begin March 1. The letter also stated that Dr. Kearney had yet
to submit a plan that meets the Dean’s expectations of detail and clarity, and that
should Dr. Kearney be unwilling or unable to develop a significant research agenda
with appropriate external funding, the University would further adjust his salary to
reflect his contributions.
32 The March 24, 2016 letter stated that despite repeated requests, Dr. Kearney
had yet to submit a plan that met the Dean’s expectations of detail and clarity. The
University informed Dr. Kearney that he must submit a plan, meeting the
specifications contained in the letter, by April 8, and if he did not do so, the University
would regard the failure as a reason to further evaluate Dr. Kearney’s salary. The
letter ended stating, “If the University is to continue to pay Dr. Kearney a salary
consistent with his peers, then Dr. Kearney must perform at a level consistent with his
peers.”
33 The April 20, 2016 letter stated that to date, Dr. Kearney had failed to submit
a plan that met the Dean’s expectations of detail and clarity, and that he had made no
effort to contribute to the University during the 2015-16 academic year. The
University stated that as part of its consideration of whether to commence tenure
revocation proceedings, one step it was taking was reducing Dr. Kearney’s salary
appropriately (to $43,500), it being fundamentally unfair to pay Dr. Kearney more
than his peers who were actually contributing. The salary reduction was effective May
1, 2016.
43
enjoyed the benefit of the statutory presumption, given the elimination of
Harper’s position was announced immediately upon the heels of her last
wasteful spending disclosure). Consequently, as Dr. Kearney acknowledges,
the question becomes whether he has put forth some evidence which
reasonably supports his contention that filing the Griffith affidavit in the court
record was a contributing factor to the ultimate reduction in his salary three
months afterward, allowing him to survive summary judgment. Because Dr.
Kearney cannot simply rely on the fact that the affidavit was filed and three
months afterward his pay was cut (again), and he points to no other evidence
upon which a reasonable person could conclude that his pay cut was
retaliation for filing the Griffith affidavit in the court record, we conclude that
Dr. Kearney has not met his burden to survive summary judgment. Simply
put, Dr. Kearney fails to establish a genuine issue of material fact that
disclosing the alleged KMSF fund mismanagement through the filing of the
affidavit was a contributing factor in his salary reduction. Summary judgment
is also appropriate on this claim.
II. Discovery Issue
The remaining issue in this appeal is whether the trial court abused its
discretion by prohibiting Dr. Kearney from deposing Dr. Wendy Hanson, a
member of the Fair Hearing Panel. Dr. Kearney sought to depose her to
determine how and from whom the Panel secured information that Dr. Kearney
had multiple remediation actions, reprimands, leaves of absences and
warnings during his twenty-seven years at the University. UK responded
44
claiming the deliberative process privilege prevented the discovery and the trial
court agreed. Dr. Kearney continues to argue the privilege is not recognized in
Kentucky. Like the Court of Appeals, we decline to address the issue further
because Dr. Kearney does not suggest, much less explain, how his substantive
rights were prejudiced by the trial court’s denial of his motion to depose a
member of the Fair Hearing Panel. As noted, we are affirming the trial court
and Court of Appeals on the summary judgment decision based upon the
content and timing of Dr. Kearney’s communications, resulting in a dismissal
of his case. We decline to issue an advisory opinion on this issue which has no
bearing on the disposition of this case. Newkirk v. Commonwealth, 505 S.W.3d
770, 774 (Ky. 2016).
CONCLUSION
For the foregoing reasons, the Court of Appeals’ decision affirming the
trial court’s grant of summary judgment in favor of the University of Kentucky
is affirmed.
Minton, C.J.; Conley, Keller, Nickell, and VanMeter, JJ., sitting. All
concur. Lambert, J., not sitting.
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COUNSEL FOR APPELLANT:
Bernard Pafunda
Pafunda Law Office
COUNSEL FOR APPELLEE:
Bryan Howard Beauman
Donald Callaway Morgan
Sturgill Turner Barker & Moloney PLLC
46