Alvin v. Suzuki

Opinions of the United
2000 Decisions States Court of Appeals
for the Third Circuit
9-12-2000
Alvin v. Suzuki
Precedential or Non-Precedential:
Docket 99-3245
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Recommended Citation
"Alvin v. Suzuki" (2000). 2000 Decisions. Paper 195.
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Filed September 12, 2000
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
NO. 99-3245
JOHN D. ALVIN, general partner; PHARMAKON, INC.;
CLINICAL PATHOLOGY FACILITY, INC., a Pennsylvania
Corporation, former General Partner; A DELAWARE
CORPORATION, PRESENT GENERAL PARTNER AS
SUCCESSOR IN INTEREST TO, CLINICAL PATHOLOGY
FACILITY t/a PHARMAKON RESEARCH AND
DEVELOPMENT a limited partnership by and through
JOHN D. ALVIN, the managing general partner
v.
JON B. SUZUKI; UNIVERSITY OF PITTSBURGH MEDICAL
CENTER; CENTRAL LABORATORIES SERVICES, INC.;
UNIVERSITY OF PITTSBURGH
John D. Alvin; Pharmakon, Inc.; and Pharmakon
Research and Development, Appellants
On Appeal From the United States District Court
For the Western District of Pennsylvania
(D.C. Civ. No. 95-cv-01821)
District Judge: Honorable William L. Standish
Argued: January 10, 2000
Before: BECKER, Chief Judge, ALITO and BARRY,
Circuit Judges.
(Filed September 12, 2000)
RICHARD G. LEWIS, ESQUIRE
(ARGUED)
RICHARD B. SANDOW, ESQUIRE
LOUIS ALVIN, ESQUIRE
Jones, Gregg, Creehan &
Gerace, LLP
411 Seventh Avenue, Suite 1200
Pittsburgh, PA 15219-2303
Counsel for Appellants
LARRY A. SILVERMAN, ESQUIRE
(ARGUED)
Dickie, McCamey & Chilcote, P.C.
Two PPG Place, Suite 400
Pittsburgh, PA 15222-5402
LAZAR PALNICK, ESQUIRE
University of Pittsburgh Medical
Center
200 Lothrop Street
Pittsburgh, PA 15213
Counsel for Appellees
OPINION OF THE COURT
BECKER, Chief Judge.
John D. Alvin, Ph.D, a tenured professor at the
University of Pittsburgh ("UPitt" or "the University"), started
and operated two successful pharmaceutical companies,
Pharmakon, Inc. ("PKI") and Pharmakon, R&D ("PRD"),
which competed with university-related commercial
activities. He brought this civil rights action alleging that
the University contrived to deny him the benefits that
inhere in a tenured position to punish him for his
entrepeneurial activity. Alvin alleges that he was deprived of
expected pay increases, access to work with graduate
students, laboratories, faculty functions, and other faculty
privileges, and that his reputation was damaged in the
process. He also contends that his tenure in the UPitt
Pharmacology Department was improperly severed and that
2
he was transferred to a tenured position in the Dental
School without his consent.
Resolution of this appeal centers on Alvin's compliance
with the University's grievance process. Alvin contends that
the procedures failed him. He proffers evidence of extensive
correspondence between himself and several members of
the University's administration. He claims that he followed
the grievance procedure laid out in the faculty handbook,
but that he was never afforded a hearing in which he could
defend himself and explain both the propriety of his
conduct and the unjustness of the deprivations he alleges
that he suffered. The gravamen of Alvin's suit is therefore
that he was deprived of his Fourteenth Amendment right in
the property of his tenure without due process of law.
Named as defendants were UPitt, Dr. Jon B. Suzuki, Dean
of UPitt's School of Dental Medicine, and two health care
providers connected with the University--the University of
Pittsburgh Medical Center and Central Laboratory Services,
Inc. Alvin seeks damages and injunctive relief under 42
U.S.C. S 1983 and Pennsylvania state law.
The District Court granted summary judgment for the
defendants on Alvin's S 1983 claim, concluding that he had
not demonstrated that he had been deprived of a property
interest, and dismissed the pendent state claims without
prejudice. The District Court's opinion focused largely on
the question whether the alleged incidents comprised such
a significant erosion of the incidents of his tenure that he
was deprived of a property interest. We do not reach this
difficult (and interesting) question, however, because,
whether or not Alvin has alleged a property deprivation, he
has failed to adduce evidence that the defendants infringed
upon whatever property right he possessed without due
process of law.
A careful examination of the correspondence
demonstrates that, although he sent a battery of letters and
complaints to several members of the UPitt faculty and
administration, he did not comply with the two-step
grievance procedure laid out in the faculty handbook, a
procedure that, if complied with, would appear to provide
due process. Furthermore, with respect to some of Alvin's
claims--that he was deprived of secretarial support, that
3
his yearly evaluations were conducted unfairly, and that his
tenure was transferred--he adduced no evidence that he
attempted to use the grievance procedure to resolve them.
Finally, Alvin claims that pre-termination notice and a
hearing was required prior to the transfer of his tenure. The
context of that transfer--it was a routine matter as part of
a policy decision to transfer the entire faculty--
demonstrates that notice and a hearing were not required.
In sum, we will affirm the District Court's grant of
summary judgment on all aspects of the S 1983 claim.
PKI also sued the same defendants, claiming interference
with contractual relations, unfair competition, violations of
the Lanham Act, and civil conspiracy. After the plaintiffs
attempted both to amend the complaint and to add PRD as
a party plaintiff, the District Court dismissed the PKI
complaint with prejudice and denied the motion to join PRD
despite the absence of either bad faith in the efforts to
amend or prejudice to the defendants. The plaintiffs also
appealed this order. Given the liberal amendment
provisions of Rule 15, the amendment should have been
allowed. Because we conclude that the District Court
abused its discretion in dismissing PKI's claims with
prejudice and refusing to add PRD as a party, we will
vacate the judgment and remand for consideration of those
claims.
I. Facts
A. Background and Alleged Deprivations
In 1978, after three years of teaching and research at
UPitt's School of Pharmacy ("SPharm"), Alvin, a pharmacist
and pharmaceutical researcher, was offered, and accepted,
a tenured position as an Associate Professor of
Pharmacology at SPharm. In 1982, he organized PKI, a
commercial venture intended to provide specialty drug
services and high-tech drug research to medical
organizations, the government, and the private sector. In
1983, PKI, with the knowledge of the Dean of SPharm,
rented space from UPitt.
4
According to Alvin, PKI flourished, and its success
threatened others in the University-related medical world,
specifically the University of Pittsburgh Medical Center
("UPMC"), a non-profit corporation that operates the
teaching hospital, and Central Laboratory Services, Inc.
("CLSI"), a non-profit corporation that provides laboratory
services to UPMC. UPMC shares administrators with UPitt.
Alvin alleges that, starting in 1984, UPMC and CLSI began
to pressure UPitt to eliminate or purchase PKI. However,
when UPitt presented a takeover package to Alvin and PKI,
they were not interested.
Alvin contends that throughout the late 1980s and 90s,
UPMC and CLSI provided the same services as PKI and
solicited PKI's existing and prospective customer base. He
contends that UPitt intentionally contacted PKI's customers
and misrepresented the licensed status of PKI. According to
Alvin, this threatened PKI's existence, and led him in the
fall of 1991 to create PRD, a partnership between himself
and the Clinical Pathology Facility ("CPF "). PKI indisputedly
sold and leased equipment to CPF and PRD, but according
to Alvin it continued to exist as a separate entity
throughout the early 90s.
Alvin alleges that during the same time period, UPitt
deprived him of many of the benefits that inhere in tenure
because of his involvement with PKI and PRD. He avers
that from 1991 to 1995 he was denied a salary increase
because of his refusal to discontinue his commercial
ventures. He claims that from 1992 on, his use of research
facilities and laboratories was cut off and the defendants
made research difficult and refused to allow him to bring
foreign exchange scholars to work on his projects. He
contends that he was deprived of administrative services
and secretarial support. He submits that his yearly
evaluations were conducted unfairly and improperly and
that the University refused to process his conflict of interest
statements, thwarting his ability to submit grant
applications. He claims that he was selectively excluded
from departmental meetings, UPitt functions, departmental
assignments and duties, and he alleges that he was
obstructed in his ability to publish his research and
conduct collaborative research. It is undisputed that in
5
1995, Suzuki, the Dean of UPitt's SDM, ordered Alvin to
cease all research projects, on the ground that he was
researching in violation of UPitt's policy on conflict of
interest. However, according to Alvin, Suzuki refused to
reveal the basis for this conflict of interest charge.
Alvin asserts that none of these deprivations were
warranted, but rather were motivated by the threat he
posed the University medical organizations and UPitt's
desire to pressure him into allowing it to take over PKI and
PRD. The factual record regarding these claims was not
developed for this appeal because the defendants have not
presented evidence contradicting Alvin's allegations
regarding what happened. Instead, they argued that"even
if all of the adverse personnel actions alleged in the
Complaint occurred in the manner claimed by Alvin, these
adverse personnel actions do not, as a matter of law,
amount to deprivations of property rights under the Due
Process Clause of the Fourteenth Amendment." Appellee's
Br. at 11. Therefore, for the purposes of this appeal, we
assume all of Alvin's allegations regarding the deprivations
to be true.
B. The Faculty Grievance Procedure and Alvin's
Correspondence
The facts that we do examine are those regarding the
faculty grievance procedure and the evidence of the extent
to which Alvin attempted to avail himself of the University
processes. The University's 1988 Handbook explains the
two-step "Faculty Grievance Procedure." Thefirst step,
entitled the "Informal Process," requires the professor to
contact the chair of the Tenure and Academic Freedom
Committee ("TAFC") for an informal investigation.
Thereafter, the TAFC mediator should attempt to resolve
the complaint: "[e]very effort will be made to achieve a
satisfactory resolution within two weeks of the initial
contact with the aggrieved person." The mediator is then
supposed to write a letter to the faculty member with
"whatever findings and recommendations seem appropriate
under the circumstances."
6
The second step, the "Formal Process," is available if the
informal process does not resolve the dispute. The Faculty
Handbook provides that
[i]n the event that the informal investigation and
mediation process does not resolve the grievance
dispute, the aggrieved faculty member may submit to
the Provost a written statement of the grievance and
the circumstances out of which it arose. This written
statement will be the complaint that will initiate the
formal grievance procedure described below, and must
be submitted within 30 days of receipt of the TAFC
letter.
The formal process provides for a grievance panel which
reviews the case and makes recommendations to the
Provost. The faculty member may present documents,
evidence, testimony, and retain counsel.
Alvin contends that he attempted to use the University's
procedures. What follows is a summary, in the light most
favorable to Alvin, of pertinent parts of his correspondence
--those letters and communications, which, according to
him, demonstrate his attempt to pursue the grievance
procedure:
1. On May 17, 1990, Alvin wrote to Dr. Robert W. Koch,
Executive Associate Dean of the School of Dental Medicine,
complaining about the reallocation of laboratory space and
requesting that he be informed "as quickly as possible of
the formal appeals procedures that are available to me and
any interested colleagues both within and outside of the
School of Dental Medicine."
2. On June 6, 1990, Alvin again wrote to Koch, referring
in the letter to a meeting about the reallocation of
laboratory space a few weeks earlier. He expressed
dissatisfaction with the meeting, and asked again if Koch
would "please inform [him] of the formal appeals
procedures available to [him] within and outside the School
of Dental Medicine."
3. Some time in 1991, Alvin met with Dr. Sanford Golin
of the TAFC. Golin, according to Alvin, agreed to initiate the
grievance procedure regarding the use of research facilities
and equipment for post-doctoral exchange students.
7
4. On July 23, 1991, Alvin wrote Provost Donald
Henderson about a number of issues, addressing several
disagreements he had with University policies as well as
complaints about how the University had treated him, but
he did not mention a formal appeal process or grievance.
5. On February 23, 1992, Alvin wrote to Suzuki, stating
that he planned to appeal his decision regarding lab space
"through whatever procedures are available both within and
without the School of Dental Medicine."
6. On June 15, 1992, Alvin wrote to Regis Vollmer, the
Chairman of the Department of Pharmacology, complaining
of his treatment and asking, among other things:"Lacking
an information gathering process in advance, what is the
appeal process post facto? Why have my requests for appeal
gone unattended since February?"
7. On June 25, 1992, Suzuki wrote to Alvin, stating
that: "I have received your appeal of my decision that you
vacate the two labs presently assigned to you. Please be
advised that your request is denied based on the School of
Dental Medicine's policy of assigning space based on
research productivity and need." On July 7, 1992, Alvin
wrote to Suzuki again, asking about an interpretation of
Suzuki's letter ("Does this mean my request for an appeal
is denied or that my appeal based on the issues is
denied?"), and urging him to reconsider.
8. On September 7, 1992, Alvin wrote to UPitt
Chancellor Dennis O'Connor. The letter began, "I am
contacting you in the hope that I have not reached the
terminus in administrative review on the matters described
below. My appeals to the chairman of my department, the
dean of my school, and the provost have gone unanswered."
The letter went on to detail several of the complaints that
form the basis of this claim.
9. On September 16 and September 21, 1992, Alvin
wrote to Dr. James Holland, President of the University
Senate, detailing his complaints and stating that he was
"formally submitting his grievance." Along with these letters
he sent "A Grievance Concerning Revocation of Research
Facilities."
8
10. In October 1992, Alvin met with Dr. Tobias, the
Chair of the TAFC. Tobias told him that the grievance
process would go forward and that Alvin would have an
opportunity to present evidence and his point of view:
Dr. Tobias eventually met with me, in October, 1992.
Dr. Tobias assured me that he would conduct the
grievance process, that he would give me the
opportunity to submit relevant information, and that
he would conduct a grievance resolution meeting with
me and Dr. Suzuki (or Dr. Vollmer, my Chairman).
However, when a meeting (the only one I have been
able to discover) was held, I was not invited to it, was
not told it was going to take place, and was not given
the opportunity to submit information.
11. In November 1992, Alvin told Vollmer that he was
worried that the TAFC committee was not acting on his
case. Vollmer told him that Tobias had confidentially
contacted Vollmer, and that Vollmer was not sure if the
panel would be meeting with him. Vollmer told Alvin that
UPitt attorneys were on the case.
12. On December 22, 1992, Tobias and Golin wrote to
Alvin on behalf of the TAFC, informing him that they had
rejected his claim, and that he could pursue an appeal by
following the second, formal step laid out in the Faculty
Handbook.
Alvin admits that after this series of correspondence, he
did not pursue any further review by any faculty
committee. The record also reflects that he failed to present
evidence suggesting that he ever attempted to trigger a
grievance process regarding his allegations (1) that he was
denied secretarial support; (2) that he was treated unfairly
in connection with his grant proposal; (3) that his 1993-94
or 1994-95 annual review was biased; and (4) that his
transfer from the School of Dental Medicine to the School
of Pharmacy was improper.
C. The Conflict of Interest Claim
Alvin separately alleges that he was deprived procedural
due process when the University refused to respond to his
9
complaints that Suzuki had unfairly ordered him to stop all
research projects. The evidence regarding this claim
establishes that Alvin filled out forms entitled"Conflict of
Interest Disclosure Statements," which are intended to
reveal any conflicts a faculty member may have in their
research. On May 17, 1995, Suzuki wrote to Alvin, stating
that he would not approve Alvin's conflict of interest
statements. He wrote that there was an apparent conflict of
interest because of Alvin's involvement with PKI (but did
not detail its nature) and wrote that it was Alvin's burden
to prove that his PKI activities did not create a conflict with
his obligations to the University. He directed Alvin to "not
participate in any research or project without the express
written approval of Dr. Paul Moore, Director of Research,
who shall certify that he has examined the proposed
activity [to] determine whether there is in fact any conflict
of interest between the University and your interests in
Pharmakon." Suzuki also informed Alvin that he could
appeal the decision.
Alvin then wrote to the Provost, Dr. James Maher, to
complain. The record reflects that, during 1995, Maher and
Alvin corresponded frequently regarding these claims.
Maher told Alvin that a Conflict of Interest Committee had
been established to review Suzuki's decision. In October
1995, the Vice Provost wrote Alvin that he could supply
additional information, and that he should write to the
committee stating his position. Alvin responded that he
could not state his position fully without knowing what
Suzuki had said, and that he had no faith in the University
process. On November 29, 1995, the Vice Provost wrote to
Alvin explaining Suzuki's justification, and stating that "I
hope that this information has been helpful to you and that
we will be able to begin deliberations to have a
recommendation to the Provost in short order."
On February 15, 1996, Alvin wrote the Provost, stating
that
[m]atters pertaining to the conflict of interest issues
which have been raised about me within the University
of Pittsburgh are involved in my pending litigation
against the University and others. I believe that it is
necessary and appropriate to follow the litigation path,
10
in part because of my inability to obtain full, fair and
due process within the University.
He added that given his experience with UPitt, he was left
with "no choice but to continue to attempt to protect myself
and obtain my legitimate rights through the court action."
D. The Transfer of Tenure
In 1987, UPitt developed a plan to transfer the entire
pharmacology faculty to UPitt's School of Dental Medicine,
leaving SPharm intact, but without faculty. According to
University records, on July 1, 1987, Alvin's tenure and
primary appointment in SPharm was terminated and
transferred to the Department of Pharmacology of the
School of Dental Medicine ("SDM"). On September 2, UPitt
wrote to Alvin, informing him that he had been, or would be
(the letter is ambiguous) transferred from SPharm to the
position of tenured Associate Professor of Physiology and
Pharmacology in the SDM, and asking for his approval.
Alvin did not sign this letter as requested, or otherwise
approve of or consent to the transfer. All other members of
the pharmacology faculty agreed to the transfer.
II. Procedural History
Alvin and PKI filed suit against CLSI, UPitt, and UPMC in
the Court of Common Pleas of Allegheny County,
Pennsylvania. Alvin sued under 42 U.S.C. S 1983 and
Pennsylvania state law. The original complaint by PKI
included claims for unfair competition, violation of the
Lanham Act, 15 U.S.C. S 1125, and civil conspiracy. The
defendants removed to the District Court for the Western
District of Pennsylvania.
The defendants moved to dismiss PKI's claim on the
ground that PKI was not a real party in interest. They
contended that PKI was essentially suing as a partner of
PRD, but lacked standing to do so. This argument
persuaded the District Court, which, in a hearing on
August 15, dismissed (without prejudice) all claims
concerning PKI because it concluded that PKI was"not a
proper party . . . under the allegations that have been
11
made" in the original complaint. The court stated to
Appellant's Counsel: "You can amend your complaint . . . .
But not substitute a party without leave of court." The
court made clear it was open only to an amendment that
explained the specific harm suffered by PKI, stating that
there "is going to be no amended complaint as to Dr. Alvin's
complaint." However, the written order that followed stated
"[t]he motion of defendants to dismiss the claims asserted
by plaintiff . . . (PKI) is granted without prejudice to the
right of plaintiffs, John D. Alvin and Pharmakon, Inc., to
file an amended complaint." PKI and Alvin represent that
the court's pronouncements led them to believe that they
could amend their complaint in more ways than one, and
they did so.
Alvin and PKI filed an amended complaint which detailed
how PKI had been separately harmed, and which joined
PRD as a new plaintiff. UPitt moved for dismissal, or in the
alternative, to strike the amended complaint. Alvin and PKI
then moved for leave to amend the complaint (in the form
of the amended complaint previously filed), and for leave to
join PRD as a party. On November 12, the District Court
granted the motion to strike the Amended Complaint,
dismissed PKI's original claims with prejudice, and denied
the Motion to Amend and to join PRD. When counsel
inquired as to whether PKI's amended complaint was legally
adequate, the District Court announced "I'm not making
any ruling; [the plaintiffs] did not comply with my order.
The complaint added a party. I didn't give leave to add a
party. I'm striking that amended complaint in its entirety
. . . [f]or that reason."
The District Court then granted summary judgment for
Suzuki on Alvin's S 1983 claims, concluding even if all he
alleged were true, he would not have been deprived of a
property interest. The court also dismissed the state claims
without prejudice. This appeal followed, in which the
plaintiffs challenge the District Court's ruling on Alvin's
S 1983 claims, the refusal to grant leave to amend the PKI
complaint and add PRD, and the resulting dismissal. We
have jurisdiction under 28 U.S.C. S 1291.
12
III. The Procedural Due Process Claims
The Fourteenth Amendment of the Constitution forbids a
state from depriving persons of life, liberty, or property
without due process of law. U.S. Const. amend. XIV,S 1.
UPitt is a state actor. See Braden v. University of Pittsburgh,
552 F.2d 948, 955-65 (3d Cir. 1977) (en banc). When a
plaintiff sues under 42 U.S.C. S 1983 for a state actor's
failure to provide procedural due process, we employ the
"familiar two-stage analysis," Robb v. City of Philadelphia,
733 F.2d 286, 292 (3d Cir. 1984), inquiring (1) whether "the
asserted individual interests are encompassed within the
fourteenth amendment's protection of ``life, liberty, or
property' "; and (2) whether the procedures available
provided the plaintiff with "due process of law."
A. Failure to Follow Processes
In order to state a claim for failure to provide due
process, a plaintiff must have taken advantage of the
processes that are available to him or her, unless those
processes are unavailable or patently inadequate."[A] state
cannot be held to have violated due process requirements
when it has made procedural protection available and the
plaintiff has simply refused to avail himself of them."
Dusanek v. Hannon, 677 F.2d 538, 543 (7th Cir. 1982); see
also Bohn v. County of Dakota, 772 F.2d 1433, 1441 (8th
Cir. 1985). A due process violation "is not complete when
the deprivation occurs; it is not complete unless and until
the State fails to provide due process." Zinermon v. Burch,
494 U.S. 113, 126 (1990). If there is a process on the books
that appears to provide due process, the plaintiff cannot
skip that process and use the federal courts as a means to
get back what he wants. See McDaniels v. Flick , 59 F.3d
446, 460 (3d Cir. 1995); Dwyer v. Regan, 777 F.2d 825,
834-35 (2d Cir. 1985), modified on other grounds, 793 F.2d
457 (2d Cir. 1986); Riggins v. Board of Regents , 790 F.2d
707, 711-12 (8th Cir. 1986).
This requirement is to be distinguished from exhaustion
requirements that exist in other contexts. Alvin appears to
conflate the two, and contends, as an alternative to his
claim that he attempted to use the available procedures,
13
that he need not go through the processes available
because of the general rule there is no exhaustion
requirement for 42 U.S.C. S 1983 claims. See Patsy v.
Board of Regents of Florida, 457 U.S. 496, 516 (1982); Hohe
v. Casey, 956 F.2d 399, 408 (3d Cir. 1992). However,
exhaustion simpliciter is analytically distinct from the
requirement that the harm alleged has occurred. Under the
jurisprudence, a procedural due process violation cannot
have occurred when the governmental actor provides
apparently adequate procedural remedies and the plaintiff
has not availed himself of those remedies. See Zinermon,
494 U.S. at 126. Applying these principles to this case, we
conclude that, viewing the facts in the light most favorable
to Alvin, he did not avail himself of the procedures provided
by the University because he did not follow the University
regulations regarding the use of the grievance procedure.
Alvin contends that he triggered the first (informal) step
in the grievance procedure by his early letters, and the
formal step by his written grievance. According to Alvin, the
informal process was triggered by his first meeting with Dr.
Golin in 1991 (item #31), over a year prior to any review on
the part of the University. The problem with this contention
is that Golin was not the chair of the TAFC, which is the
party an aggrieved faculty member is supposed to contact
according to the faculty handbook. See supra Section I.B.
Alvin first contacted Tobias, who was the chair of the TAFC,
in October 1992 (item #10). After meeting Tobias, the TAFC
met and discussed the case, and Alvin learned of the
results of this informal proceeding in December 1992 (item
#12). This two-month delay is much greater than the two-
week time period set forth in the handbook as the time
period within which the informal process is supposed to
take. The handbook does not promise a two-week
turnaround; rather, it merely states that "every effort will be
made" to satisfactorily resolve the dispute within two
weeks. Alvin complained about the inordinate delay, but he
never actually triggered the formal process by submitting a
formal grievance letter to the Provost.
_________________________________________________________________
1. We refer in this and the next two paragraphs to the itemization in
supra Section I.B.
14
Alvin's 1991 letter to Provost Henderson (item #4) was
informal, and did not refer to the Faculty Grievance
Procedure. But even if that letter were intended to trigger
the formal procedures, the Provost cannot be expected to
have guessed at its purpose. Alvin's two letters to Dr. Koch
(items #1 & 2), while plaintive, do not purport to be
grievances, but rather constitute efforts to learn about the
grievance procedure, and both were sent prior to his initial
contact with Golin. The letter to Suzuki (item #5) and the
letter to his Department Chair, Dr. Volmer (item #6), are
both clearly outside the process laid out in the Handbook.
Alvin's strongest argument derives from the letters to
Chancellor O'Connor (item #8) and Dr. Holland, University
Senate President (item #9). In both letters, arguably after a
futile effort to trigger the informal process (his alleged
conversation with Golin), Alvin laid out his complaint; the
latter letter included a statement that he was "formally
submitting" his grievance, and was accompanied by a
formal grievance. But these letters were sent to the wrong
officials in the University. The President of the University
Senate is not the Provost. Furthermore, the letter to
Holland did not state that Alvin had attempted to use the
informal process. Though these may seem like minor
mistakes, the burden is on the aggrieved faculty member to
make the complaint in the right manner to the right
individual before he can claim that the process has failed
him.
Dr. Holland took the letter to be a request for initiation
of the informal processes (there was no suggestion in the
letter that Alvin had therefore attempted to use the informal
process), and shortly thereafter, the informal process
began. After the TAFC rejected Alvin's claims, Alvin was
informed by the December 22 letter that he could pursue
the formal process (item #12). When asked during a
deposition, Alvin admitted that he did not trigger the formal
process after December 22:
Q: At any time after December 22, 1992, did youfile a
formal complaint with the Provost under the Second
Step Formal Process arising out of the matters
discussed in this December 22 letter?
15
A: Not after this letter.
Q: Why not?
A: I had already done it . . . .
(1378). He goes on to detail his previous efforts to engage
his department and the Provost's office. While we are not
unsympathetic to Alvin's apparent misunderstanding of the
terms of the faculty grievance handbook, our sentiments do
not change the requirement that one use the procedures
available, which Alvin did not do.
In sum, Alvin simply did not follow the prescribed
processes in the Faculty Handbook. His battery of letters to
the right people in the wrong manner, and the wrong
people in the right manner, does not allow him to sustain
a claim that the procedures he did not use were
constitutionally flawed.2 Alvin may understandably have felt
that he did all that he could, and that any other efforts
would be useless. In fact, although he wrote far more than
he needed to in one sense, he ultimately wrote one letter
too little (and too late). If Alvin had (1) attempted to use the
informal process and then (2) after a few weeks had passed
without any result on the informal process, written a formal
grievance to the Provost, stating that the informal process
had failed, he could state a claim (presuming that the
process failed even after this effort). But even reading the
record in the light most favorable to Alvin, there is simply
insufficient evidence supporting his claim that he followed
through and triggered the second, formal step of the
procedure on any of the claims.3
_________________________________________________________________
2. In his supplemental brief requested by this panel, Alvin also suggests
that he did not have to use these procedures, noting that Dr. Detre,
Senior Vice Chancellor, testified that the correct appeals process is
"[d]epartmental chairman to the dean, from the dean to me, from me to
the provost, from the provost to the chancellor of the University."
However, Alvin never suggested that he did not need to use the channels
provided in the Faculty Handbook prior to the supplemental briefs to the
panel after oral argument. Therefore, this argument is waived. See Harris
v. City of Philadelphia, 35 F.3d 840, 845 (3d Cir. 1994) (holding that
issues raised for the first time on appeal will not be considered).
3. We also note that Alvin has not framed this case in the context of
cases involving inordinate delay, and neither party briefed those cases
nor discussed their framework at oral argument. Cf. FDIC v. Mallen, 486
U.S. 230, 242 (1988) (setting forth the framework for delay claims).
16
B. Futility
In the alternative, Alvin argues that he did not need to
trigger the formal process correctly, because it was clear
that it would be constitutionally inadequate, in that the
University would be entirely unresponsive. He does not
dispute that if the University followed its own regulations,
it would provide him constitutionally adequate process.
Rather, Alvin contends that regardless of the procedures
laid out in the handbook, his experience with the University
demonstrated that it was intransigent, and that it never
intended to fairly consider his complaints. Hence, he
argues, using the processes would have been futile.
When access to procedure is absolutely blocked or there
is evidence that the procedures are a sham, the plaintiff
need not pursue them to state a due process claim. See
Stauffer v. William Penn Sch. Dist., 829 F. Supp. 742, 749
(E.D.Pa. 1993); Moran v. Burns, No. 92-1765, 1993 U.S.
Dist. LEXIS 10365, *13 (D.N.J. July 26, 1993) (recognizing
that a plaintiff could present evidence of futility); see also
W. v. Tirozzi, 832 F.2d 748, 756 (3d Cir. 1987) (discussing
similar requirements when seeking injunctive relief under
S 1983 and IDEA). However, since Alvin never invoked the
second part of the processes available to him, which appear
facially adequate, we will not hold that this step would have
been unavailing (in procedure, if not in substance), absent
concrete evidence supporting such a contention.
We have previously encountered like cases, in which
plaintiffs have attempted to make a procedural due process
claim, charging that bias has infected a review of its
deprivation, although they have not used all the procedures
available to them. For example, in McDaniels v. Flick, 59
F.3d 446, 460 (3d Cir. 1995), we stated that
a discharged employee cannot claim in federal court
that he has been denied due process because his
pretermination hearing was held by a biased individual
where he has not taken advantage of his right to a
post-deprivation hearing before an impartial tribunal
that can rectify any possible wrong committed by the
initial decisionmaker.
17
Likewise, in Dykes v. Southeastern Pennsylvania
Transportation Authority, 68 F.3d 1564 (3d Cir. 1995), we
held that a dismissed employee failed to state a claim for a
due process violation after pursuing a three-level,
apparently biased, grievance procedure, when he did not
request arbitration, although arbitration was available to
him. We concluded that his failure to pursue the
arbitration available to him precluded his bringing a due
process challenge even when the "plaintiff allege[d] that the
defendants acted in concert to deprive him both of a
meaningful hearing and of arbitration" because the
"administrative process in place ha[d] incorporated
safeguards adequate to resolve these allegations in a
manner consistent with the demands of due process." Id. at
1572. Likewise, in this case, if Alvin failed to use the post-
deprivation procedures available to him, he cannot forego
attempting to use those processes simply because he thinks
that they will be followed in a biased manner.
Viewing the facts in the light most favorable to Alvin,
there is simply insufficient evidence that the formal hearing
would not be held in a fair and impartial manner. For
example, he has not brought forth evidence that he would
not be able to use a lawyer, present evidence, or explain
himself. The record supports his argument that the
informal proceedings were painfully slow, and that several
letters he wrote were not responded to, and even that
several members of the UPitt faculty and administration
were disposed against his claim. But as in Dykes , 68 F.3d
at 1572, an allegation that initial stages of a process had
been biased does not mean that the later processes will be
biased as well. In McDaniels, 59 F.3d at 460, we observed
that "[u]sually, an employment termination decision is
made initially by the employee's direct supervisor or
someone working in the same organization as the
employee," and that individuals in such a position may well
be influenced, or be alleged to be influenced, by "bias or
improper motivation." Regardless, we held that such claims
of bias do not give an employee license to conclude that the
entire system is biased. See id.
Therefore, while the fired professor in McDaniels wanted
to prove that his pre-termination hearing was not impartial,
18
the presence of arbitration and other apparently adequate
post-termination remedies foreclosed his ability to make a
procedural due process claim. See id. at 460-61. The
Constitution does not require perfection at every stage of a
process; like the plaintiff in McDaniels, Alvin has not used
all the processes available, and he cannot convert his
difficulties with quickly triggering the informal process into
a contention that the entire process, which he has not yet
used, is biased. See id.
C. The Conflict of Interest Claim
Alvin also makes a distinct claim based on the alleged
inadequacy of the process available to Alvin when Suzuki
ordered him to stop all research on the ground that there
was an apparent conflict between Alvin's commitments to
PKI and the University. A review of the evidence reveals that
this claim also fails due to Alvin's failure to complete the
processes provided by the University.
Alvin's correspondence with Maher in late 1995 and early
1996 demonstrates that, contrary to Alvin's contentions,
Maher was fairly responsive. While he did not give Alvin
what he wanted, he engaged him and his concerns and
triggered a review process. Moreover, Alvin's contention that
by the end of 1995 the Provost's Office had simply stopped
dealing with him is not supported. Rather, Alvin was
indisputedly the party that ended the process when he
precipitously wrote to Maher, informing him that he would
be pursuing his complaints through litigation. There is no
other way to read this letter. Furthermore, Alvin did not
even attempt to pursue an appeal of the conflict of interest
decision (or refusal to decide, as he characterizes it)
through the grievance process provided in the Faculty
Handbook. Therefore, even if we were to accept his
argument that the Provost's office had failed him through
direct review of Suzuki's decision, he was obligated to
trigger the formal process before bringing this claim. See
Dykes, 68 F.3d at 1571 (holding that failure of lower levels
of process do not justify skipping secondary levels before
filing a federal action).4
_________________________________________________________________
4. We do not hold that a party need wait forever before suing, but only
that, if the process is moving forward, and the avenues of internal appeal
have not been triggered, then a suit claiming inadequacy of procedural
protection is premature.
19
D. Other Claims
Alvin admittedly did not attempt to use the informal
process for his other claims: (1) that he was denied
secretarial support; (2) that he was treated unfairly in
connection with his grant proposal; (3) that his 1993-94 or
1994-95 annual review was biased; and (4) that his tenure
was transferred from the School of Dental Medicine to the
School of Pharmacy (a claim we consider separately, see
Part IV, infra). He asserts that his experience had taught
him that the grievance process was a sham, and that in
such a circumstance, one need not go through a futile
exercise in order to state a due process claim. However, as
discussed above, he presents no evidence that the
procedures are inadequate, and, for the reasons explained
above, see Section III.A-C, supra, he cannot state a
procedural due process claim with respect to these aspects
of the case absent such evidence.
IV. Pre-termination Claim Regarding Tenure Transfer
Alvin's last claim is that he was denied constitutionally
mandated notice and a hearing before his transfer of tenure
from SPharm to the School of Dental Medicine. This is
distinct from his other claims, in which his quarrel with the
University concerns the adequacy of their post -termination
procedures.
A.
Alvin submits that he did not receive any notice or
hearing prior to being transferred, and the Constitution
requires that he have these pre-deprivation procedures.5
Unlike the other claims, a complete constitutional violation
has (allegedly) already occurred; if the Constitution requires
pre-termination procedures, the most thorough and fair
post-termination hearing cannot undo the failure to provide
such procedures. See Stana v. School Dist. of Pittsburgh,
775 F.2d 122, 129 (3d Cir. 1985) (indicating that following
_________________________________________________________________
5. We need not, and do not, decide whether there is a disputed issue of
material fact regarding whether Alvin received notice because we
conclude that even if he did not, notice was not required.
20
Cleveland Board of Education v. Loudermill, 470 U.S. 532
(1985), there can be no requirement to pursue post-
deprivation remedies when pre-deprivation notice or
hearing is required for due process). To determine whether
and what sort of pre-deprivation hearing is required, we
examine, and balance, three factors:
First, the private interest that will be affected by the
official action; second, the risk of an erroneous
deprivation of such interest through the procedures
used, and the probable value, if any, of additional or
substitute procedural safeguards; and finally, the
Government's interest.
Mathews v. Eldridge, 424 U.S. 319, 335 (1976). While,
under this test, a public employee is generally entitled to
notice and an opportunity to be heard prior to being
deprived of his or her property interest in employment, see,
e.g., McDaniels v. Flick, 59 F.3d 446, 456 (3d Cir. 1995),
this rule is not absolute, see Gilbert v. Homar , 520 U.S.
924, 929 (1997). The pre-termination hearing must be
examined in light of the "the last factor in the Mathews
balancing . . . the risk of erroneous deprivation and the
likely value of any additional procedures." Id. at 933. In
Codd v. Velgar, 429 U.S. 624 (1977), the Court concluded
that a pre-termination hearing was not required when there
was no underlying factual dispute to be hashed out in the
hearing: "[I]f the hearing mandated by the Due Process
Clause is to serve any useful purpose, there must be some
factual dispute between an employer and a discharged
employee which has some significant bearing on the
employee's reputation." Id. at 627-28 (emphasis added). As
in Codd, there was simply no factual dispute that a pre-
deprivation notice or hearing could have addressed. Alvin's
transfer was as part of a large and undifferentiated group--
all the SPharm faculty were transferred--and there were no
factual disputes that could have been resolved at a hearing.
Even Alvin's letters and complaint acknowledge that the
argument about the transfer is an argument about
University-wide policy--not a disagreement about
accusations against Alvin. Therefore, the "risk of error," as
it were, was nonexistent. In sum, while Alvin may be able
to make out a breach of contract claim for the transfer, we
21
find that the absence of pre-deprivation notice or a hearing
did not, in itself, violate his due process rights.
V. PKI and PRD's Claims
Leave to amend "shall be freely given when justice so
requires." Fed. R. Civ. P. 15. Although refusals to grant
leave to amend are reviewed for abuse of discretion, see
Rolo v. City Investing Co. Liquidating Trust, 155 F.3d 644,
654 (3d Cir. 1998), it is an abuse of discretion to deny leave
to amend unless "plaintiff 's delay in seeking amendment is
undue, made in bad faith, prejudicial to the opposing party,
or [the amendment] fails to cure the jurisdictional defect,"
Berkshire Fashions, Inc. v. M.V. Hakusan II, 954 F.2d 874,
886 (3d Cir. 1992); see also Foman v. Davis, 371 U.S. 178,
182 (1962) (holding that it is abuse of discretion to deny
leave to amend absent a clear or declared reason such as
delay, bad faith, prejudice, or a repeated failure to cure a
problem in the complaint); Boileau v. Bethlehem Steel Corp.,
730 F.2d 929, 938 (3d Cir. 1984) (trial court abused
discretion by refusing to permit plaintiff to amend
complaint where no prejudice to defendant was alleged or
proved). Leave to amend may be denied, however, if
amendment would be futile. See Smith v. NCAA, 139 F.3d
180, 190 (3d Cir. 1998), rev'd on other grounds , 525 U.S.
459 (1999). An amendment is futile if the amended
complaint would not survive a motion to dismiss for failure
to state a claim upon which relief could be granted. See id.
The plaintiffs contend: (1) that the District Court should
have granted leave to amend PKI's complaint to clarify the
basis of its claim that it had been independently harmed;
and (2) that the court should have allowed PRD to be added
as a party. We agree. There was no evidence of bad faith,
delay, or prejudice, or any other reasons justifying the
denial of leave to amend. In fact the court did not justify its
denial of leave to amend for any of those reasons, but
because the plaintiff 's amended complaint did not comport
with the court's prior order about the scope of amendment.
The court stated: "The amended complaint clearly fails to
comply with the requirements I gave on August 15th at the
time we had our last argument in this case. I'm going to
grant the motion to strike the amended complaint," and
22
"you failed to follow the instructions that I gave on August
15." When the plaintiffs objected, both to the refusal to
allow amendment and the court's response, noting that a
dismissal with prejudice would interfere with PKI's rights
(given the statute of limitations), the court responded, not
in Rule 15 terms, but in something more like Rule 16(b)
terms,6 that it would be "easier to manage from the Court's
point of view. We're not going to permit any further
amendment to this complaint."
As this excerpt makes clear, the record supports PKI's
theory that the District Court refused the amendment
because of case management concerns, both in terms of the
course the case might follow, and a perceived need for
fidelity to the court's prior management plan, which did not
contemplate adding PRD as a party (and arguably included
a clear order not to do so). But these reasons are not
among those justifying a refusal of leave to amend.
Moreover, PKI was dismissed with prejudice, which is a
severe and disfavored remedy. See, e.g., Icon Group, Inc. v.
Mahogony Run Dev. Corp., 829 F.2d 473, 477 (3d Cir. 1987)
(holding that dismissal of a claim after the plaintiff made a
good faith, but unsuccessful, effort to comply with an order
to amend was inappropriate); Donnelly v. Johns-Manville
Sales Corp., 677 F.2d 339, 342 (3d Cir. 1982). Cf. Estate of
Leon Spear v. Commissioner of IRS, 41 F.3d 103, 111 (3d
Cir. 1994) ("We apply a sliding scale--the harsher the
sanction being imposed, the more the balance will have to
be against the party being sanctioned to justify the
sanction.").
The defendants argue that PKI's dismissal should be
upheld because the unfair competition claims could only
have affected PRD, and hence PKI cannot be the real party
in interest. Essentially, they are invoking the rule that, if
amendment would be futile, the court does not abuse its
discretion in denying leave to amend. See Smith , 139 F.3d
at 190. PKI, the defendants submit, was filing not on its
own behalf, but as a limited partner of PRD. Under
_________________________________________________________________
6. We refer to Federal Rule of Civil Procedure 16(b), which sets forth the
District Court's general case management power, establishing time limits
for filing motions, making amendments, and joining parties, inter alia.
23
Pennsylvania law, a limited partner loses the right to
conduct business in exchange for limited liability, and may
not sue for harms to the partnership. See In re Estate of
Hall, 535 A.2d 47, 56 (Pa. 1987); Kenworthy v. Hargrove,
855 F. Supp. 101, 104 (E.D. Pa. 1994). Alvin himself has
admitted that PKI had not engaged in business activity for
some time (it has not employed anyone since 1995), and
that all the lab employees work for PRD. This is in contrast
to PRD, which regularly engages in business.
However, the plaintiffs contend that the harm to PKI
occurred prior to the creation of PRD, and in fact led to the
creation of PRD. In particular, they allege that unfair
competition led PKI to make arrangements with CPF and
PRD; that the sale and marketing of PKI's technical
products was diminished; and that it could not engage in
its former operations. The proposed amended complaint
stated that PKI had engaged in independent business
through 1991, and continued to operate independently of
PRD to the date of the complaint. Regardless of the
substantive validity of the claims, PKI has at least alleged
sufficient facts that would render it a real party in interest.
This leads to the question whether PKI has stated a claim
that could survive a 12(b)(6) motion. See Smith , 139 F.3d at
190. This is a legitimate question, and if the court had
made a legally correct determination that PKI has not
stated a viable claim, we would uphold its decision to
refuse to allow PKI to amend its complaint. However,
nothing in the record suggests that the court even
considered whether PKI stated a viable claim by way of its
amended allegations, and the parties, on appeal, merely
argue about whether PKI is a real party in interest.
Therefore, because PKI's proposed amended complaint
colorably alleges specific harm to it, we conclude that the
court abused its discretion when it dismissed PKI's claims
with prejudice. Likewise, the District Court abused its
discretion in denying the motion to amend the complaint to
add PRD. There was no evidence of bad faith, delay or
prejudice, and there is no indication in the record that the
District Court even considered whether the addition would
be futile. Rather, the record supports PRD's theory that the
court refused to allow that amendment too for case
management purposes.
24
For the foregoing reasons, the judgment of the District
Court dismissing PKI, refusing to allow an amendment of
the complaint, and refusing to allow an amendment adding
PRD as a party will be vacated, and the claims remanded
to the District Court for further proceedings. The court can
consider the PRD and PKI claims on remand.
VI.
In sum, we will affirm the District Court's grant of
summary judgment for the defendants on Alvin's claims
and the dismissal, without prejudice, of his accompanying
state law claims.7 We will also reverse the dismissal, with
prejudice, of the PKI claims, and the refusal to amend the
complaint to add PRD, and will remand the case to the
District Court for further proceedings regarding those
claims. Parties to bear their own costs.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
_________________________________________________________________
7. Alvin also claims that he was deprived of a liberty interest without
due
process of law. We affirm the District Court's disposal of this claim for
the reasons set forth in the District Court's opinion.
25