Schulz v. City of Longmont, CO

F I L E D
United States Court of Appeals
Tenth Circuit
September 26, 2006
PU BL ISH
Elisabeth A. Shumaker
UNITED STATES COURT O F APPEALS Clerk of Court
TENTH CIRCUIT
STEPHEN SCHU LZ, DA RREN
B LO O M , WILLIA M C LA RK ,
STEVEN DEAL, SEAN HARPER,
TIM OTHY LAM BERT, CRAIG
M OR TENSON , SARA PIERCE,
R ACHA EL SLO A N , B RIA N SM ITH,
M ICH AEL STOG SDILL, JENN IFER
A N D ERSO N , D EN ISE A RN ESON,
KEVIN BLUM ENSHINE, TRAVIS
C HA PM A N , C ASEY CLO U D ,
SHAYNE DOM BROW SKI,
M ICHELE G O LD M A N , LU K E
JASSO, TOD D LA ND IN, M ICH AEL No. 04-1418
M AJOR , JON ATH ON M ICH AEL,
SC OTT OPIE, A N TH O N Y PR IOLA,
A RTU RO RA M IR EZ, TR OY REED,
SU SA N HO GG , A M Y H EN N ION,
Plaintiffs - Appellants,
v.
CITY O F LONGM ON T,
C OLO RA D O ,
Defendant - Appellee.
Appeal from the United States District Court
for the District of Colorado
(D.C. No. 03-W Y-1552-AJ)
Darold W . Killmer (M ari Newman, with him on the briefs), Killmer, Lane &
Newman, LLP, Denver, Colorado, for Plaintiffs-Appellants.
Andrew D. Ringel (Thomas J. Lyons, with him on the brief), Hall & Evans,
L.L.C., Denver, Colorado, for D efendant-Appellee.
Before BR ISC OE, M cKA Y, and EBEL, Circuit Judges.
EBEL, Circuit Judge.
Due to declining revenues, the City of Longmont, Colorado (“the City”)
imposed a salary freeze on its employees for the year 2003. Plaintiffs-A ppellants
(“the Officers”), members of Longmont’s fire and police departments, sued the
City, alleging that when the City hired them, it had promised each of them annual
pay increases for approximately the first three years of their employment. The
Officers, who were eligible for such an annual pay increase in 2003, claimed that
the City, by imposing the 2003 salary freeze, 1) breached its employment contract
with these Officers; 2) in the alternative, was bound by promissory estoppel
principles to give the Officers a pay increase for that year; and 3) had deprived
the Officers of a property interest w ithout due process. W e conclude that,
because under Colorado law any promises made to the Officers at the time the
City hired them could not bind future City Councils, the district court properly
granted the City summary judgment on all of these claims.
I. B ACKGR OU N D
The City pays its police officers and firefighters on a step-pay system.
2
There are four pay steps. 1 The City always hires firefighters at pay step one,
while police officers reach step one after completing a probationary period. 2 The
City also hires police officers, but not firefighters, as lateral transfers from police
departments in other cities and, as such, the City gives those Officers credit for
their prior experience with those other cities.
A City ordinance required the City to move an Officer up to the next pay
step after the Officer had completed one year at a particular pay step, so long as
the Officer had performed satisfactorily. 3 That meant that after approximately
three years of satisfactory performance, an Officer would reach the highest pay
level, level four. The O fficers assert that the City was able to recruit and hire
new officers at lower salaries than other comparable cities because the City’s
1
After a police officer reaches the fourth pay step, there is a fifth “master
police officer” step available. That step, however, is not automatically awarded
and is not the subject of this litigation.
2
A police officer’s probationary period lasts between six and twelve
months.
3
Ordinance 3.04.160(C) specifically provided that
[i]f at the time of the employee’s annual performance review the
executive director or designee determines that the employee is
performing at a satisfactory level, the employee shall receive a pay-step
increase to the next highest pay step until the maximum step for the
salary range is reached. Once the maximum salary pay-step is
achieved, each employee shall continue to be reviewed for performance
at least every twelve months.
(Emphasis added.)
3
compensation plan allowed the O fficers to reach the highest pay level more
quickly than officers in other cities.
In 2002, the City was facing a decline in revenues. In light of that, the City
manager, along with other City administrators, proposed to the Longmont City
Council (“Council”) a 2003 budget 4 that froze the wages of all city employees.
The proposed budget did include a “one time payment of $500 per regular
employee in appreciation of their hard work and dedication to the organization
during this difficult financial period.” 5 After several weeks of study and public
comment and discussion, the C ity Council approved the proposed budget. In
adopting this budget and its wage freeze, 6 the Council also suspended the
4
The 2003 budget was for the City’s fiscal year 2003, which ran from
January 1 to December 31, 2003.
5
The City was better able to make a one-time $500 payment to all City
employees because such a “one-time” payment could come from a “one-time”
funding source, such as a budget surplus. But the City, by its own policy, could
only pay salary increases, which would be ongoing once awarded, from ongoing
or operating revenues, such as sales tax revenues.
6
There were exceptions to the wage freeze. For example, the City was
required by law to give its apprentice electrical workers an increase:
Apprentice linemen operate under a written document approved by the
state Department of Labor. And if they complete the requirements
under whichever level they are in that apprentice program, . . . at that
time they would have been eligible for movement, because there w as a
written approved plan that said that they needed to do that to keep that
program eligible under the state D epartment of Labor.
In addition, the City Council made exceptions from the wage freeze for
(continued...)
4
ordinance requiring the City to give annual step increases.
The City’s revenue shortfall for 2003 was not as dire as predicted. As a
result, the City Council approved a 2004 budget that included step increases for
all Officers eligible for them and reinstated the ordinance requiring the City to
give eligible Officers an annual increase.
Twenty-eight Officers who were due to receive step increases in 2003, but
who did not receive them because of the wage freeze, filed suit against the City,
alleging: 1) breach of contract; 2) promissory estoppel; and 3) deprivation of a
property right without due process. The Officers asserted their first two claims
under Colorado law and their due process claim under 42 U.S.C. § 1983. The
Officers expressly based their claims, not on the City’s ordinance requiring the
City to pay annual step increases, but only on representations the Officers say the
City made w hen it hired them promising annual pay increases. The district court
granted the City summary judgment on all three claims. The Officers now appeal
from that decision. Having jurisdiction to consider this appeal under 28 U.S.C.
§ 1291, we AFFIRM .
II. STANDA RD O F REVIEW
This court reviews the district court’s summary judgment decision de novo,
6
(...continued)
“employees coming off probation, employees who were promoted to a higher pay
range per the personnel rules, [and] grant-funded positions.”
5
viewing the evidence in the light most favorable to the non-moving party. See
Roberts v. Printup, 422 F.3d 1211, 1214 (10th Cir. 2005). Summary judgment is
appropriate only “if the pleadings, depositions, answers to interrogatories, 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 .” Fed. R. Civ. P. 56(c).
III. D ISC USSIO N
A. Claims asserted under Colorado law for breach of contract and
promissory estoppel.
The Officers allege that the promises 7 the City made to pay annual step
increases resulted in a contractual obligation or, in the alternative, could be
7
The Officers bore the burden of establishing that the City had promised to
pay each of them an annual step increase for approximately the first three years of
their employment. See Elliott v. Colo. Dep’t of Corr., 865 P.2d 859, 860-61
(Colo. Ct. App. 1993) (agreeing with plaintiff that she has burden of proving
existence of contract); Luttgen v. Fischer, 107 P.3d 1152, 1155 (Colo. Ct. App.
2005) (holding that “a plaintiff must demonstrate justifiable reliance on the acts
or statements of another to succeed on claims of promissory estoppel”); Koerpel
v. Heckler, 797 F.2d 858, 863, 865 (10th Cir. 1986) (holding plaintiff bears
burden of proving he has a property interest protected by due process). For
purposes of this appeal, we will assume that the Officers presented sufficient
evidence to meet this burden. The district court, in granting the C ity summary
judgment, expressed some skepticism as to whether the Officers had actually met
their burden of asserting evidence that the City made such promises to each of the
O fficers. We share that skepticism. Nevertheless, as explained more fully below ,
even assuming the Officers were able to establish that the City made such
promises, Colorado law would in any event preclude the Officers’ reliance on
those promises. Therefore, we turn directly to that issue.
6
enforced against the City under a theory of promissory estoppel. 8 Under Colorado
law , however, a municipality’s authority to enter into contractual obligations is
circumscribed by statute and ordinance. See Colo. Springs Fire Fighters Ass’n v.
City of Colo. Springs, 784 P.2d 766, 773-74 (Colo. 1989); see also Shaw v.
Sargent Sch. Dist. No. RE-33-J ex rel. Bd. of Educ., 21 P.3d 446, 449-50 (Colo.
Ct. App. 2001). These restrictions are incorporated into any contract the
municipality makes. See Keeling v. City of Grand Junction, 689 P.2d 679, 680
(Colo. Ct. App. 1984); see also Colo. Invs. Servs., Inc. v. City of W estminster,
8
Colorado law recognizes both “express contract[s] . . . evidenced by the
parties’ w ritten or oral words,” as well as contracts implied in fact, which are
“based on the conduct of the parties to the agreement.” Agritrack, Inc. v. DeJohn
Housemoving, Inc., 25 P.3d 1187, 1192 (Colo. 2001) (quotation omitted). “In
both cases, a contract is created by the meeting of the minds to contract with each
other,” and “[t]here is no difference in legal effect between express and implied
in fact contracts.” Id. (quotation omitted). In either case, it is the O fficers’
burden to prove the existence of a contract. See Elliott, 865 P.2d at 860-61.
Alternatively, if the Officers are unable to establish the existence of a
contract, they might still recover under a theory of promissory estoppel.
“Promissory estoppel is an extension of the basic contract principle that one who
makes promises must be required to keep them.” Patzer v. City of Loveland, 80
P.3d 908, 912 (Colo. Ct. App. 2003).
The elements of promissory estoppel are: (1) the promisor made a
promise to the promisee; (2) the promisor should reasonably have
expected that the promise would induce action or forbearance by the
promisee; (3) the promisee in fact reasonably relied on the promise to
the promisee’s detriment; and (4) the promise must be enforced to
prevent injustice.
Id. To recover under a theory of promissory estoppel, then, the O fficers “must
demonstrate [their] justifiable reliance on the acts or statements” made by the
City. Luttgen, 107 P.3d at 1155.
7
636 P.2d 1316, 1318 (Colo. Ct. App. 1981). And anyone that contracts with a
municipality is charged with constructive knowledge of those restrictions and,
therefore, cannot claim any justifiable reliance on representations made beyond
the municipality’s contractual authority. Colo. Springs Fire Fighters Ass’n, 784
P.2d at 774 (holding that “[p]ersons dealing with the City are on constructive
notice of the scope of authority possessed by the municipal officials with whom
they are dealing;” further holding that “[t]his constructive notice includes the
knowledge that the city council acted pursuant to the authority granted it by the
city charter and subject to the limitations provided therein”); Keeling, 689 P.2d at
680 (holding that “[o]ne who contracts w ith a municipality is charged with
know ledge of its limitations and restrictions in making contracts”); Colo. Invs.
Servs., Inc., 636 P.2d at 1318 (same). 9
9
The Officers rely upon Normandy Estates M etropolitan Recreation District
v. Normandy Estates, Ltd., 553 P.2d 386 (Colo. 1976), and several other cases, to
argue that “Colorado courts have long held that a city may not hide behind a
claim of ultra vires contract to avoid its duty to justly compensate for benefits
received under an agreement.” These cases on which the O fficers rely, however,
are distinguishable from the situation in this appeal.
In Normandy Estates, the Colorado Supreme Court was concerned with the
inequities that may occur when a private party has already conferred a benefit on
a government entity pursuant to a contract that turns out to have been created
contrary to that entity’s authority. See 553 P.2d at 389. The Colorado Supreme
Court determined that, in such a case, to permit the government entity to avoid its
obligations under an unenforceable contract would permit an “unduly harsh and
inequitable” result. Id. Therefore, in Normandy Estates, the Colorado Supreme
Court “adopt[ed] what appears to be the prevailing rule: that where property is
furnished to a municipal corporation under an unenforceable contract, and the
(continued...)
8
Applying these principles, Colorado courts have specifically determined
that municipalities retain the ability to change the compensation and benefits they
provide to their employees. For example, in Keeling, 689 P.2d 679, the Colorado
Court of Appeals addressed the manner in which the City of Grand Junction
compensated its police officers and firefighters. See id. at 680. Grand Junction
had “initiated an educational incentive pay program,” w hich increased an officer’s
base pay “when a participant earned a specified number of college credits and
accumulated a specified number of years of law enforcement [or fire fighting]
experience.” Id. Grand Junction decided to terminate that program and instead
“equalize[] the salaries of all police officers and fire[fighters] having similar rank
and time in grade within each department without regard to individual educational
9
(...continued)
municipality has not paid for the property, then the seller or person supplying the
property may, upon equitable terms, recover it In specie.” Id.The other cases relied upon by the Officers, M ountjoy & Frewen v.
Cheyenne County High School District, 240 P. 464, 464-65 (Colo. 1925), and
City of Colorado Springs v. Colorado City, 94 P. 316, 316, 320 (Colo. 1908), can
similarly be distinguished because in each case the city had already received and
retained the benefits provided by the contracts and only afterwards sought to
avoid paying for those benefits. Further, those cases, decided more than
seventy-five years ago, must be read in light of Colorado’s modern authority
discussed above in the text.
Here the Officers sought to enforce what was then a future right to a step
increase, rather than payment for a benefit already conferred on the City. The
City approved the 2003 budget, with its wage freeze, in 2002; therefore, the
Officers knew before they worked in 2003 that they were not going to receive any
step increase that year.
9
levels.” Id. Several police officers and firefighters challenged the change in the
manner in which they were to be compensated, suing Grand Junction for breach of
contract and, in the alternative, recovery under promissory estoppel principles.
See id.The Colorado Court of Appeals in Keeling noted that, like Longmont’s City
Council, the Grand Junction City Council was “vested with all the legislative
power of the City.” Id. The court held that
[a] city council, in the exercise of its legislative power, cannot enter
into a contract which will bind succeeding city councils and thereby
deprive them of the unrestricted exercise of their legislative power.
Among the legislative powers of a city council is the fixing of
salaries of city employees. Therefore, the Grand Junction City
Council, being vested with all the legislative power of the City, had
the power to adopt a new pay plan setting forth rates of pay for all
city employees and terminating the prior program.
Id. (citations omitted). The Colorado Court of Appeals, therefore, rejected the
arguments of the officers and firefighters in Keeling that they were entitled to
recover for breach of contract or, in the alternative, under a theory of promissory
estoppel:
One who contracts with a municipality is charged with knowledge of
its limitations and restrictions in making contracts. The existing law
at the time and place of the making of the contract, including the city
charter, becomes a part of the contract.
Charged with knowledge that succeeding city councils are not
bound by the legislative acts of their predecessors in setting salaries
for city employees, plaintiffs cannot prevail on the basis of contract.
Because the fixing of salaries is subject to change and the receipt of
a salary is contingent upon continued employment with the City,
10
plaintiffs do not have a vested contractual right in the continuance of
a particular rate or method of compensation.
For the same reasons, plaintiffs could not have reasonably
relied upon continuing payments under the program, and therefore,
their claims based on promissory estoppel must fail.
Id. at 680-81 (citations omitted).
The Colorado Supreme Court later relied on Keeling to address the manner
in which the City of Colorado Springs provided medical benefits to retired city
employees in Colorado Springs Fire Fighters Association, 784 P.2d at 773.
Similar to the step increases at issue in this case, the C olorado Supreme Court
noted that Colorado Springs’ healthcare benefits was one of the features of the
City’s benefit package that enabled the City both to hire and retain qualified
individuals. Id. Establishing and modifying “such an employee benefit has
traditionally been within the scope of legislative discretion.” Id. In that case, the
Colorado Supreme Court held that a 1966 ordinance providing that Colorado
Springs w ould pay the health insurance premiums for its retired employees did
not preclude the City from later passing another ordinance that instead limited the
City’s contribution toward its retired employees’ health insurance. Id. at 768-69,
773-74. In reaching that conclusion, the Colorado Court relied on the fact that
the Colorado Springs City Council, in passing the 1966 ordinance, did not intend
to create a binding contractual right; 10 the City Charter provided that neither the
10
Colorado law does recognize that “[a] statute or ordinance [can] be
(continued...)
11
City Council nor any city employee could incur any liability on the City’s behalf
“unless and until a definite amount of money shall have been appropriated;” and
concluded that interpreting the 1966 ordinance to bind Colorado Springs in the
future “would impose future liability upon the City by requiring subsequent
councils to annually appropriate the funds needed to fund the health premium
obligations. This interpretation is erroneous because it is inconsistent with the
limitations imposed by the city charter.” Id. at 773 (quotation omitted).
Applying Keeling and Colorado Springs Fire Fighters A ssociation to this
case, we conclude that the Officers did not have any legally cognizable
expectation of receiving annual step increases for approximately the first three
years of their employment. As a starting point, it is clear that the City’s C ouncil
had the authority to repeal the ordinance requiring it to pay annual step increases
and to pass a budget, by ordinance, that did not provide for any employee
increases. As a home rule municipality, Longmont’s Council was vested with
“plenary legislative authority over matters exclusively local in nature.” Colo.
10
(...continued)
considered a contract, [but] only when its language and the surrounding
circumstances manifest a legislative intent to create private contractual rights
enforceable against the state or municipality.” Colo. Springs Fire Fighters Ass’n,
784 P.2d at 773. There is a presumption, however, “that a law is not intended to
create private contractual vested rights, but merely declares a policy to be pursued
until the legislature shall ordain otherwise.” Id. (quotation omitted); see also
Alderton v. State, 17 P.3d 817, 819 (Colo. Ct. App. 2000). As mentioned
previously, however, the Officers expressly do not rely on any ordinance as the
basis for their claims that they have a contractual right to receive annual step
increases.
12
Springs Fire Fighters Ass’n, 784 P.2d at 773 n.18 (citing Colo. Const. art. XX).
This would include determining the salaries the City paid its employees. See id.
(considering benefits city paid its retired employees to be local in nature); see
also Keeling, 689 P.2d at 680 (noting that “the fixing of salaries of city
employees” is “[a]mong the legislative powers of a city council”). Further, the
City Charter required the Council to consider and adopt by ordinance an annual
budget. And such a budget would contain a plan to pay salaries. Under Keeling
and its progeny, the Council was not bound by the previous ordinance requiring
the City to pay annual step increases, nor by the City’s prior conduct in paying
those increases.
The Officers do not challenge this. They assert instead that the City
employees who promised the Officers annual step increases nevertheless bound
the City to pay those increases. But Keeling and related cases clearly preclude
such an argument. Pursuant to the City’s C harter, only the Council could create
monetary obligations. Therefore, City employees could not otherwise bind the
City contractually to an agreement that the Council did not validly create. See
Seeley v. Bd. of County Comm’rs, 791 P.2d 696, 700 (Colo. 1990) (holding
government employee cannot enforce terms of contract his government supervisor
was not authorized to create); cf. Cherry Creek Aviation, Inc. v. City of
Steamboat Springs, 958 P.2d 515, 519-20 (Colo. Ct. App. 1998) (holding that,
because “[c]ontracts executed by municipal corporations are void w hen there is a
13
failure to comply with the mandatory provisions of the applicable statutes or
charters,” City was not bound by contract improperly entered into by City’s
airport authority).
And, as discussed above, the Officers are deemed to have knowledge of the
limitations on the C ity’s ability to contract. See Colo. Springs Fire Fighters
Ass’n, 784 P.2d at 774; Keeling, 689 P.2d at 680. For that reason, they cannot
assert that they reasonably relied on any promises made by City employees for
purposes of promissory estoppel. See Keeling, 689 P.2d at 681; see also Seeley,
791 P.2d at 701 (holding government employee cannot recover on theory of
estoppel based on his supervisor’s assertions when supervisor was not authorized
to take that action or make that promise).
The O fficers seek to avoid this result, compelled by Colo. Springs Fire
Fighters Association and Keeling, by arguing that it was not the legislative action
of the City Council that deprived them of their step increases, but it was instead
the decisions made by City administrators, in administering the Council’s 2003
budget, that deprived the Officers of their step increases. Said another way, the
Officers argue that, even though the City Council repealed the ordinance
requiring the City to pay the O fficers’ annual step increases during their first
three years of employment, City administrators remained free to pay these
14
increases from money that was included in the City’s budget. 11 That argument,
however, is unavailing for several reasons.
As an initial matter, undisputed evidence in the record clearly indicates that
the City Council, in approving the 2003 budget, affirmatively decided to freeze
City employees’ wages and, as part of that freeze, decided not to pay the O fficers
11
It would have taken an additional $75,000 to pay all the step increases due
the Officers in 2003. There was money in the budget from which the City could
have paid this amount. City administrators had built into the proposed budget
enough money from which the City could have paid every officer in the City at
the highest pay level, step four. Those preparing the 2003 budget proposal
included this extra money because the City had run into trouble in 2002 when,
while adopting a new compensation system, the City “had some budgeting
failures w here we did not have proper amounts budgeted to be able to recover all
positions by trying to budget at the actual step” on which an employee was to be
paid. In light of those problems, “we determined that the safest bet for 2003 in
trying to project salaries would be to use the top step, as opposed to the actual
step, or the projected step, so that we would not underbudget any of those
positions.” This had been a common budgeting strategy in the 1990s. In M ay
2003, the Council eventually passed an ordinance removing this excess money
from the City’s General Fund.
In addition to the fact that there was extra money already built into the
approved 2003 budget, the projected revenue shortfall on which the 2003 budget
was based turned out to be overly pessimistic. In fact, the City took in $1.25
million more in revenues in 2002 than it had anticipated. And the C ity had a $2-3
million carryover from 2003 to 2004. In addition, the City had $13 million in its
General Fund at the end of 2002, and still more at the end of 2003, while it was
only required by City policy and state statute to retain several million dollars in
its General Fund for emergency purposes. W hile the Officers assert that the City
could have paid their step increases from these surplus funds, however,
undisputed evidence in the record indicates that City policy precluded using these
one-time surplus funds to pay ongoing salary increases.
15
any step increases for that year. 12 It is also clear that City administrators did not
have the authority to act contrary to the Council’s budget, adopted by ordinance,
and pay the Officers their step increases without Council approval.
M oreover, even if City officials could have paid the Officers their 2003
step increases without Council approval, this does not establish that the O fficers
12
Undisputed evidence in the record indicates that the City manager
specifically addressed the wage freeze in his letter presenting the proposed budget
to the Council on August 28, 2002:
[T]he budget does not include resources to adjust employee pay. This
is the first time in sixteen years that we have been in this situation. The
only way that resources could have been made available for salary
increases in 2003 would be to dram atically reduce ongoing service
levels to offset the level of ongoing expenses that would go tow ard
salaries.
The proposed wage freeze, and in particular the decision not to pay any step
increases, was the subject of specific comments made to the Council during
several public meetings by City employees, and council members. And the
ordinance by which the Council eventually adopted the 2003 budget specifically
suspended the previous City ordinance that had required the City to pay step
increases annually. This undisputed evidence clearly indicates that the Council
specifically considered and affirmatively decided not to raise City employees’
salaries in 2003, and that included not paying the Officers any step increases.
Further, although the proposed budget the Council approved actually
contained enough money to pay the Officers’ step increases, see infra note 11,
undisputed evidence in the record indicates that the Council did not specifically
know that. The evidence in the record indicates that the Council only approved a
lump sum for police and fire fighters’ salaries, and was not aware of individual
officers’ salaries. M oreover, regardless of the existence of that additional money
in the budget, the Council clearly chose not to pay the Officers those step
increases. Underlying this policy decision was the Council’s belief that, because
the City did not have enough money to give all City employees a wage increase,
the City should not give any employees an increase. And it would have taken
$1-1.5 million to fund the increases that all City employees anticipated in 2003.
16
had a legally cognizable right to receive those increases. Based upon our
previous discussion, the Officers still would not have been justified in relying on
the previous representations of City employees that the City would pay the
Officers an annual step increase for the first three years of their employment.
For these reasons, we conclude the district court properly granted the City
summary judgment on the Officers’ contract and promissory estoppel claims
asserted under C olorado law . 13
B. Claims asserted under 42 U.S.C. § 1983 14 alleging the C ity
deprived the O fficers of a property right w ithout due process.
The O fficers also allege that the City deprived them of a property interest
in their annual step increase without providing them due process. “[T]he Due
Process Clause provides that certain substantive rights–life, liberty, and
property–cannot be deprived except pursuant to constitutionally adequate
procedures.” Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 541 (1985).
13
In light of this conclusion, we need not address the City’s alternative
argument – that any promises that the City made to pay the Officers an annual
pay-step increase violates the Colorado Constitution, as amended by the Taxpayer
Bill of Rights.
14
Section 1983 provides, in pertinent part, that
[e]very person who, under color of any statute, ordinance, regulation,
custom, or usage, of any State . . . subjects, or causes to be subjected,
any citizen of the United States or other person w ithin the jurisdiction
thereof to the deprivation of any rights, privileges, or imm unities
secured by the Constitution and laws, shall be liable to the party injured
in an action at law, suit in equity, or other proper proceeding for
redress . . . .
17
“An essential principle of due process is that a deprivation of life, liberty, or
property be preceded by notice and opportunity for hearing appropriate to the
nature of the case.” Id. at 542 (quotation omitted). “To determine w hether a
plaintiff was denied procedural due process, we engage in a two-step inquiry:
(1) Did the individual possess a protected interest to which due process protection
was applicable? (2) W as the individual afforded an appropriate level of process?”
Copelin-Brow n v. N. M . State Personnel Office, 399 F.3d 1248, 1254 (10th Cir.
2005) (quotation omitted). W e conclude that the Officers have failed to make a
showing of a protectable interest cognizable under the Due Process Clause.
Accordingly, we affirm summary judgment for the City on this claim, without
needing to address the second issue of the level of process provided by the City.
The procedural component of the Due Process Clause does not
protect everything that might be described as a “benefit”: To have a
property interest in a benefit, a person clearly must have more than
an abstract need or desire and more than a unilateral expectation of
it. H e must, instead, have a legitimate claim of entitlement to it.
Such entitlements are of course[] not created by the Constitution.
Rather, they are created and their dimensions are defined by existing
rules or understandings that stem from an independent source such as
state law.
Town of Castle Rock v. Gonzales, 545 U.S.748, 125 S. Ct. 2796, 2803 (2005)
(citations, quotations, alteration omitted). “[A] benefit is not a protected
entitlement if government officials may grant or deny it in their discretion.” Id.The determination of w hether an individual has a protected property interest
under state law is ultimately a matter of federal constitutional law. See id.18
“State law sources for property interests can include statutes, municipal
charters or ordinances, and express or implied contracts.” Kinsgford v. Salt Lake
City Sch. Dist., 247 F.3d 1123, 1128 (10th Cir. 2001); see also Hulen v. Yates,
322 F.3d 1229, 1240 (10th Cir. 2003) (per curiam). In this case, the property
interest the Officers assert they had in receiving their 2003 step increases is the
same purported contractual right to an annual step increase that underlies their
state-law claims for breach of contract and promissory estoppel. That claim of a
property right protected by due process fails for the same reasons that the
Officers’ claims alleging breach of contract and promissory estoppel fail. The
district court, therefore, did not err in granting the City summary judgment on this
due process claim.
IV . C ON CLU SIO N
For the foregoing reasons, we AFFIRM the district court’s decision
granting the City summary judgment on all claims.
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