Betty Lou Dossett v. First State Bank

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 03-2624
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Betty Lou Dossett, *
*
Appellant, *
*
v. *
*
First State Bank, Loomis, Nebraska, *
*
Appellee. *
______________________ * Appeal from the United States
* District Court for the
Betty Lou Dossett, * District of Nebraska.
*
Appellant, *
*
v. *
*
Lauritzen Corporation, doing business *
as Financial Services Company, *
*
Appellee. *
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Submitted: June 16, 2004
Filed: February 28, 2005
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Before MORRIS SHEPPARD ARNOLD, RILEY, and COLLOTON, Circuit Judges.
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COLLOTON, Circuit Judge.
Betty Lou Dossett brought this action pursuant to 42 U.S.C. § 1983 against her
former employer, First State Bank of Loomis, Nebraska, (“Bank”) and the Lauritzen
Corporation (“Lauritzen”). Dossett claimed that the defendants conspired with the
Loomis School District (“School District”) to terminate her employment at the Bank
in retaliation for her exercising the constitutional right to freedom of speech at a
public school board meeting. Dossett appeals several decisions made by the district
court in the trial and re-trial of her case. We affirm in part, reverse in part, and
remand for a new trial.
I.
Dossett is a resident of Holdredge in Phelps County, Nebraska. In February
1994, she began working at the Bank, where she “did a little bit of everything,”
including serving as a teller and bookkeeper. On January 15, 1998, Dossett attended
a public meeting held by the Phelps County R-6 School District where the issue of
merging with the Loomis School District was discussed. At the meeting, she inquired
why no one from the Loomis School District had informed the public about potential
tax consequences of the proposed merger.
The Loomis School District was one of the Bank’s largest deposit accounts.
After the meeting, the Loomis School District superintendent and two members of the
Loomis school board spoke about the meeting with employees of the Bank, including
the president of the Bank, John Nelsen. The superintendent, Keith Fagot, who also
had his personal bank accounts at the Bank, informed Nelsen that he felt Dossett
inappropriately had questioned his integrity and the integrity of the Loomis school
board members. As a result, Fagot said that he would wait for another teller when
visiting the Bank in order to avoid contact with Dossett. Nelsen believed that as
superintendent, Fagot had the power to direct the School District’s funds elsewhere.
Nelsen also heard that school board member Nancy Morse, who maintained a
personal account at the Bank, was upset by Dossett’s remarks at the meeting. School
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board member Mike Thorell, a prospective customer of the Bank, also informed
Nelsen that he was offended by Dossett’s comments and would not be comfortable
with her waiting on him as a teller.
Nelsen reported the problem relating to Dossett to Dan O’Neill, the executive
vice president of Lauritzen and president of Financial Services Company, a division
of Lauritzen. O’Neill testified that Nelsen told him that several customers had
threatened to change banks or sever their relationships with the Bank because of
Dossett's remarks. Nelsen denied that any of the school board members or the
superintendent threatened to remove funds from the Bank or demanded that Dossett
be fired. Ultimately, on January 29, 1998 – two weeks after the public meeting
regarding the merger – Nelsen terminated Dossett's employment. At the termination
meeting, Nelsen informed Dossett that as a result of her comments, the Bank was on
the verge of losing two large depositors and loan customers. In a letter, Nelsen
further advised Dossett that her employment was terminated because of “comments
made by [her] during a meeting on January 15, 1998, which were negative about our
local school board and superintendent, thereby reflecting poorly on our community
and placing at risk substantial customers of the Bank.”
At the end of a first jury trial, the jury returned a verdict in favor of Dossett in
the amount of $1,555,678.76. The day after the verdict, the district court sua sponte
notified the parties that it was considering the grant of a new trial on both liability and
damages, because the court tentatively believed the verdict was excessive and the
product of passion and prejudice. After briefing and argument, the court ordered a
new trial. With regard to the first trial, Dossett appeals the district court’s decisions
granting a new trial, granting defendant Lauritzen’s motion for judgment as a matter
of law, and denying Dossett’s request for a punitive damages instruction.
After a second trial, the jury returned a verdict in favor of the Bank. Dossett
claims that one of the key jury instructions was erroneous. She complains about an
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instruction that required her to prove in her First Amendment retaliation claim that
the School District superintendent and board members, who allegedly conspired with
the Bank, had “actual authority” or “apparent authority” as agents of the School
District to enter into an agreement with the Bank to discharge Dossett in retaliation
for the comments she made at the school board meeting. Moreover, Dossett claims
that she was entitled to further discovery on this element of actual or apparent
authority, and that the district court erred in conditioning further discovery on her
payment of the Bank’s costs in preparing for trial. In addition, Dossett contends that
the district judge erred in denying her motion for recusal, a request for a punitive
damages instruction, and a motion for a new trial.
II.
At the conclusion of Dossett’s case-in-chief in the first trial, on February 11,
2003, the district court entered judgment in favor of Lauritzen pursuant to Federal
Rule of Civil Procedure 50(a). When the district court granted a new trial with
respect to claims against the Bank on February 28, 2003, it stated that for purposes
of Federal Rule of Civil Procedure 54(b), there was no just reason to delay entering
a final judgment dismissing with prejudice all claims against Lauritzen. At that point,
there was indisputably a final judgment subject to appeal, but Dossett did not file her
notice of appeal in this case until June 6, 2003. As a result, Dossett’s notice of appeal
with respect to Lauritzen was untimely under Federal Rule of Appellate Procedure
4(a)(1)(A), because it was not filed within 30 days after the district court entered
judgment in favor of Lauritzen. See Speer v. City of Wynne, 276 F.3d 980, 988 (8th
Cir. 2002). Accordingly, we lack jurisdiction to address Dossett’s claim that the
district court erred in granting judgment as a matter of law in favor of Lauritzen. See
Browder v. Dir., Dep’t of Corrs. of Ill., 434 U.S. 257, 264 (1978) (time limit set forth
in Federal Rule of Appellate Procedure 4 regarding when to file a notice of appeal is
“mandatory and jurisdictional”).
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III.
After the first trial, the district court advised the parties that the court was
considering an order for a new trial on its own motion pursuant to Federal Rule of
Civil Procedure 59(d). After consideration of the parties’ briefs and oral arguments,
the court ordered a new trial on Dossett’s First Amendment claim. Relying on
Sanford v. Crittenden Memorial Hospital, 141 F.3d 882, 884-86 (8th Cir. 1998), the
district court granted a new trial because the verdict of $1,555,678.76 was
“excessive” and “the finding of liability and the award of damages was the product
of passion and prejudice.” (J.A. at 183). Under our precedents, review of the district
court’s decision to grant a new trial based on the size of the verdict is “extraordinarily
deferential,” in view of the opportunity of the district court to hear the testimony,
observe the demeanor of the witnesses, and know the community and its standards.
Sanford, 141 F.3d at 884; see also Solomon Dehydrating Co. v. Guyton, 294 F.2d
439, 447-48 (8th Cir. 1961).
We cannot say that the district court abused its discretion in finding that the
jury’s verdict of over $1.5 million was excessive and a product of passion and
prejudice. The jury was instructed to base any award only on actual damages, which
in this case included lost wages and “emotional pain, suffering, inconvenience,
mental anguish, loss of enjoyment of life and reputation damage.” (J.A. at 155). The
jury was not instructed to consider punitive damages. Because the parties stipulated
that the amount of Dossett’s lost wages was $55,678.76, (id. at 513), it follows that
the jury awarded Dossett exactly $1.5 million for pain, suffering, and other non-
economic damages. Even Dossett’s attorney was not so bold as to argue for anything
close to that sum. During closing arguments, he urged only a total of $500,000 in
damages.
The first jury’s award, as far as we can tell, would represent an unprecedented
amount of damages in a First Amendment retaliation case. Dossett has not identified
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any comparable award, and our precedents generally involve damages well below the
seven-figure sum at issue here. See, e.g., Naucke v. City of Park Hills, 284 F.3d 923,
926-27, 930 (8th Cir. 2002) (upholding award of $8,542 in back pay, $50,000 for
emotional distress, and $100,000 for punitive damages for a fired chief of the fire
department, and $6,750 in back pay, $10,000 for emotional distress, and $30,000 in
punitive damages for a fired part-time fireman); Campbell v. Ark. Dep't of Corr., 155
F.3d 950, 957 (8th Cir. 1998) ($94,000 for back pay, mental and emotional distress,
humiliation, and loss of reputation); Casey v. City of Cabool, 12 F.3d 799, 802 (8th
Cir. 1993) ($18,888 in damages); Trudeau v. Wyrick, 713 F.2d 1360, 1368 (8th Cir.
1983) ($25,000 in actual damages was not excessive). Dossett argues that her case
is comparable to Rustenhaven v. American Airlines, Inc., 320 F.3d 802 (8th Cir.
2003), in which the jury awarded $4,242,000 to a plaintiff who survived a plane crash
and suffered physical and various cognitive injuries. Id. at 804. But while our court
concluded that the evidence of mental and emotional consequences was sufficient to
support an award of $3,242,000 (after remittitur), we emphasized that the non-
economic damages were the result of physical injuries sustained in a traumatic, life-
threatening accident. Id. at 807-09. The factual scenario presented in Rustenhaven
is so different from the case at hand that the district court was well within its
discretion to measure the reasonableness of Dosset’s damages award differently from
Rustenhaven’s. Although Dossett did experience a tumultuous period after losing her
job, it was not an abuse of discretion to find that an award for non-economic damages
of almost twenty-eight times her lost wages was excessive.
Dossett also argues that even if the jury award was the product of passion and
prejudice, the district court should not have granted a new trial on the issue of
liability, or, alternatively, that the court should have offered her a remittitur. It is
“generally inappropriate,” however, to order only a partial new trial on the issue of
damages when the district court concludes the damages award was motivated by
passion and prejudice. Sanford, 141 F.3d at 885. We have reasoned that if passion
or prejudice influenced the jury’s damages decision, then that same passion or
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prejudice may well have affected its decision on the issue of liability as well. Id. For
similar reasons, absent unusual circumstances, a remittitur is not appropriate when
there is a finding of passion or prejudice. Id.; Everett v. S.H. Parks & Assocs., Inc.,
697 F.2d 250, 253 n.5 (8th Cir. 1983). Finding no unusual circumstances here, we
hold that the district court did not abuse its discretion in granting a new trial with
respect to damages and liability and refusing to offer a remittitur.
IV.
In the second trial, the claim tried to the jury was Dossett’s allegation that the
Bank and the School District conspired to have her terminated for exercising her First
Amendment rights at the R-6 school board meeting, and that the Bank was liable for
that conspiracy under 42 U.S.C. § 1983. This claim was premised on the Supreme
Court’s recognition that a private actor may be liable under § 1983 when the private
actor “‘is a willful participant in joint activity with the State or its agents’” in denying
a plaintiff’s constitutional rights. Adickes v. S.H. Kress & Co., 398 U.S. 144, 152
(1970) (quoting United States v. Price, 383 U.S. 787, 794 (1966)); see also Tower v.
Glover, 467 U.S. 914, 920 (1984) (“[A]n otherwise private person acts ‘under color
of’ state law when engaged in a conspiracy with state officials to deprive another of
federal rights.”); Dennis v. Sparks, 449 U.S. 24, 27-28 (1980). The jury ultimately
returned a verdict in favor of the Bank.
Dossett’s principal claim on appeal relates to the district court’s jury instruction
concerning the elements of her § 1983 claim. Section 1983 imposes liability for
certain actions taken “under color of” law that deprive a person “of a right secured
by the Constitution and laws of the United States.” Lugar v. Edmondson Oil Co., 457
U.S. 922, 931 (1982) (internal quotation omitted). A deprivation of rights secured by
the First Amendment – against the States by way of the Fourteenth Amendment –
requires state action, see United Bhd. of Carpenters Local 610 v. Scott, 463 U.S. 825,
830-32 (1983), and “[i]n cases under § 1983, ‘under color’ of law has consistently
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been treated as the same thing as the ‘state action’ required under the Fourteenth
Amendment.” Lugar v. Edmondson Oil Co., 457 U.S. 922, 928 (1982) (quoting
United States v. Price, 383 U.S. 787, 794 n.7 (1966)). Whether the school
superintendent and other school board members acted under color of law or in their
purely private capacities as bank customers during interaction with the Bank was
sharply contested at trial. Dossett asserts that the district court’s instruction on this
element of her claim was error.
Because Dossett claimed that the Bank was liable under § 1983 pursuant to the
“joint action” theory of Adickes, the district court instructed the jury that for Dossett
to prove her claim, she must establish that “there was a voluntary understanding, or
willing meeting of the minds, between Defendant and the Loomis School District that
Defendant would discharge Plaintiff in retaliation for the comments made by Plaintiff
at the R-6 school meeting.” (J.A. at 737.) With regard to the role of the school
officials, the district court advised the jury that it “must find that the superintendent
or one or more members of the school board of the Loomis School District had either
‘actual authority’ or ‘apparent authority’ as agents of the District to enter into the
understanding or meeting of the minds.”1 During the jury instruction conference, the
1
Jury Instruction No. 9 stated:
Third, there was a voluntary understanding, or willing meeting of
the minds, between Defendant and the Loomis School District that
Defendant would discharge Plaintiff in retaliation for the comments
made by Plaintiff at the R-6 school meeting.
Before you may find that there was such an understanding or
meeting of the minds, you must find that the superintendent or one or
more members of the school board of the Loomis School District had
either “actual authority” or “apparent authority” as agents of the District
to enter into the understanding or meeting of the minds.
“Actual authority” exists when an agent acts within the scope of
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district court explained that it adopted this instruction to make the issue of “state
action” more “sensible to the jury . . . [b]y using actual authority and apparent
authority as opposed to magic words state action and that sort of thing.” (Trial Tr.
5/22/03, at 445).
his or her authority. The conduct of an agent is within the scope of his
or her authority:
1. When it is the kind of thing he or she was employed or elected
to do;
2. When it is done substantially within any authorized limits on
time and place; and
3. When it is done with at least the partial intention of furthering
the interests of his or her principal (in this case, the Loomis School
District).
For “apparent authority” to exist in this case,
1. The Loomis School District must have led Defendant to
believe that its superintendent or one or [sic] members of the school
board had authority to agree that Defendant would discharge Plaintiff in
retaliation for the comments made by Plaintiff at the R-6 school
meeting; and
2. Defendant’s belief that the superintendent or one or more
school board members had this authority must have been reasonable.
If Plaintiff fails to prove any one of the three essential elements
of her First Amendment claim, your verdict must be for the Defendant.
(J.A. at 737-38).
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Dossett contends that this jury instruction was erroneous because it required
her to prove that the school board members or superintendent had official authority
to enter into an understanding that Dossett should be fired in retaliation for exercising
her First Amendment rights. Dossett contends that the district court instead should
have given the model Eighth Circuit jury instruction on “color of state law” – “[a]cts
are done under color of law when a person acts or purports to act in the performance
of official duties under any state, county or municipal law, ordinance or regulation,”
8th Cir. Civil Jury Instr. 4.40 (2001) – which, ironically, was the instruction
requested by the Bank on this point. (Trial Tr. 5/22/04, at 443). We review the
district court’s jury instructions for abuse of discretion, making sure that they fairly
represent the evidence and applicable law. Warren v. Prejean, 301 F.3d 893, 900
(8th Cir. 2002).
Under the instruction given to the jury, Dossett was required to prove that the
school board members or the superintendent had “authority” – actual or apparent –
to enter willingly into an understanding with the Bank to terminate Dossett in
retaliation for the exercise of her First Amendment rights. As defined, school
officials had “actual authority” only if an action was “the kind of thing he or she was
employed or elected to do” and an official had “apparent authority” only if the Bank
was led to believe that the school official “had authority” to make the agreement to
retaliate against Dossett, and it was “reasonable” for the Bank to believe that the
school officials had this authority. In other words, if the school officials acted in a
way that a reasonable person would believe was outside the official’s authority from
the School District, then the school officials were not acting “under color of law”
within the meaning of the jury instructions.
We agree with Dossett that the disputed instruction was error, because it
excluded from the scope of “under color of” law actions taken by a school official
who was purporting to act in the performance of official duties, but was acting
outside what a reasonable person would believe the school official was authorized to
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do. “The traditional definition of acting under color of state law requires that the
defendant in a § 1983 action have exercised power ‘possessed by virtue of state law
and made possible only because the wrongdoer is clothed with the authority of state
law.’” West v. Atkins, 487 U.S. 42, 49 (1988) (quoting United States v. Classic, 313
U.S. 299, 326 (1941)). At the same time, however, the Supreme Court has made clear
that even the “[m]isuse of power” possessed by virtue of state law is action taken
“under color of state law.” Classic, 313 U.S. at 326. Thus, “under ‘color’ of law”
means “under ‘pretense’ of law,” and “[a]cts of officers who undertake to perform
their official duties are included whether they hew to the line of their authority or
overstep it.” Screws v. United States, 325 U.S. 91, 111 (1945) (plurality opinion)
(emphasis added); accord id. at 115-16 (Rutledge, J., concurring in the result).
Applying these principles, the Supreme Court in Adickes held that the involvement
of a police officer in a conspiracy to deprive a citizen of equal protection of the laws
“plainly provides the state action essential to show a direct violation of petitioner’s
Fourteenth Amendment equal protection rights, whether or not the actions of the
police were officially authorized, or lawful.” 398 U.S. at 152 (emphasis added).
That is not to say that every action of a school official is under color of law
simply because the official is a public employee. “[A]cts of officers in the ambit of
their personal pursuits are plainly excluded,” Screws, 325 U.S. at 111, so exhortations
or agreements by a bank customer who also happens to be a school official do not
necessarily constitute actions under color of law. But on the other hand, the mere fact
that a school official also has a personal account at the Bank does not mean that the
official’s interactions with the Bank are exempt from scrutiny under § 1983.
“[G]enerally, a public employee acts under color of state law while acting in his
official capacity or while exercising his responsibilities pursuant to state law.” West,
487 U.S. at 50. Hence, as noted, one of the fighting issues in this case has been
whether school officials acted in their personal or official capacities when
communicating with the Bank about Dossett.
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The challenged jury instruction unduly narrowed the official capacity or “under
color of law” side of this equation. If the jury believed that a school official,
purporting to act in the performance of official duties, sought an agreement with the
Bank to terminate Dossett in retaliation for the exercise of her First Amendment
rights, but the jury believed that the school official’s actions were both unauthorized
and beyond those the Bank reasonably believed were authorized by the School
District, then the jury was directed to find that the school official was not acting under
color of law. This is not a correct application of the law. Just as a police officer
conspiring to obtain a search warrant based on false evidence, see Mark v. Furay, 769
F.2d 1266, 1273-74 (7th Cir. 1985), or a judge agreeing to issue an injunction in
exchange for a bribe, Sparks, 449 U.S. at 26-28 & n.5, may act under color of law
despite exceeding his actual and apparent authority as defined in these instructions,
a school official reaching a mutual understanding with a private actor to retaliate
against a private citizen for questioning the work of the school board may do the
same. Accordingly, we conclude that the jury instruction defining the elements of the
§ 1983 conspiracy was erroneous. By eliminating one potentially viable avenue to
establish liability, the error affected Dossett’s substantial rights. See Fed. R. Civ. P.
61.
V.
The Bank argues alternatively that even if the jury instruction was erroneous,
the judgment should be affirmed on the ground that a private employer cannot be
liable for violating the First Amendment rights of an employee based on “joint
action” with a state actor under Adickes. The Bank observes that whether a public
employee’s speech is protected by the First Amendment is subject to a balancing test.
See Pickering v. Board of Educ., 391 U.S. 563, 568 (1968). It contends that in the
case of a private employer alleged to have conspired with a state actor to retaliate
against a private employee for the exercise of First Amendment rights, the Pickering
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balance should be applied, and “any balancing must be decided in favor of the private
employer.” (Appellee’s Br. at 34). The district court rejected this contention.
We agree with the district court that the Supreme Court’s decision in Pickering
is not applicable in this situation. Pickering concerned speech on matters of public
concern by a public school teacher, and the Court recognized that “the State has
interests as an employer in regulating the speech of its employees that differ
significantly from those it possesses in connection with regulation of the speech of
the citizenry in general.” 391 U.S. at 568. The Court thus reasoned that “[t]he
problem in any case is to arrive at a balance between the interests of the teacher, as
a citizen, in commenting upon matters of public concern and the interest of the State,
as an employer, in promoting the efficiency of the public services it performs through
its employees.” Id. Dossett, by contrast, was not a public employee. She was a
member of “the citizenry in general,” and her speech on matters of public concern
clearly was protected by the First Amendment against abridgment by state actors,
without regard to a Pickering “balancing test.”
We see no reason why a private actor may not be liable under § 1983 for
conspiring with state officials to violate a private citizen’s right to freedom of speech
under the First Amendment, just as it may be held liable for conspiring to violate
other constitutional rights. See, e.g., Hudson v. Chi. Teachers Union Local No. 1, 743
F.2d 1187, 1191 (7th Cir. 1984) (“[W]hen a public employer assists a union in
coercing public employees to finance political activities, that is state action; and when
a private entity such as a union acts in concert with a public agency to deprive people
of their federal constitutional rights, it is liable under section 1983 along with the
agency.”). In Pendleton v. St. Louis County, 178 F.3d 1007 (8th Cir. 1999), we said
that “retaliation against protected speech can result in section 1983 liability even if
it ultimately is carried out by a private actor.” Id. at 1011. We held that the plaintiff
in that case stated a claim against state defendants for conspiring to deny
constitutional rights, because he alleged a meeting of the minds between the private
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employer, who allegedly forced the plaintiff to resign, and a state actor who allegedly
contacted the private employer in an effort to have the plaintiff terminated. Although
the private employer was not a party to the interlocutory appeal, it is clear that a
private entity acts under color of state law when engaged with state officials in a
conspiracy to deprive a person of federal constitutional rights. We think it follows
from Pendleton that both state officials and private actors may be liable under § 1983
for conspiring to retaliate against protected speech, if the evidence shows the
requisite agreement to violate or disregard the law.
In support of its argument that the Pickering balancing test should apply to this
case, the Bank complains that if Dossett were to prevail, then “a private employer
faced with potentially devastating loss of business could not take the only action that
would save its business.” (Appellee’s Br. at 34). We think this cataclysmic
prediction misunderstands Dossett’s claim. The allegation is not merely that the Bank
discharged Dossett because it exercised business judgment in the best interests of its
shareholders, or that it succumbed to economic pressure from school officials who
threatened to withdraw the school board’s significant bank account. If that were all
the evidence showed, then it may well be insufficient to establish liability for a
conspiracy under § 1983. Cf. Helvey v. City of Maplewood, 154 F.3d 841, 844-45
(8th Cir. 1998) (holding that, although private employer told plaintiff employee “[t]he
City says I have to fire you,” and the “City will revoke [my] license and put [me] out
of business unless [I] fire [you],” employee “offered no evidence” that private
employer “willingly agreed” with city manager to retaliate against her for testifying
in court proceeding, and thus dismissing claims under 42 U.S.C. § 1985 and state
civil conspiracy law).
Under § 1983, a plaintiff must establish not only that a private actor caused a
deprivation of constitutional rights, but that the private actor willfully participated
with state officials and reached a mutual understanding concerning the unlawful
objective of a conspiracy. See Adickes, 398 U.S. at 152. In Adickes, for example, the
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Supreme Court considered whether Kress & Company was entitled to summary
judgment on the claim that it had conspired with city police to violate the plaintiff’s
equal protection rights when Kress refused service at a food counter. Kress argued
that summary judgment was warranted because evidence of its store manager’s non-
discriminatory motive for refusing service was undisputed. The store manager
claimed that Miss Adickes was refused food service “only because he was fearful of
a riot in the store by customers angered at seeing a ‘mixed group’ of whites and
blacks eating together.” 398 U.S. at 154. The Court rejected that argument, noting
that the plaintiff presented evidence “specifically disputing the manager’s assertion
that the situation at the store at the time of the refusal was ‘explosive,’ thus creating
an issue of fact as to what his motives might have been in ordering the refusal of
service.” Id. at 157 (emphasis added). The Court explained that the store manager’s
intent and motive were important to the question whether the store was liable under
§ 1983: “[Adickes] will be entitled to relief under § 1983 if she can prove that a
Kress employee, in the course of employment, and a Hattiesburg policeman somehow
reached an understanding to deny Miss Adickes service in the Kress store, or to
cause her subsequent arrest because she was a white person in the company of
Negroes.” Id. at 152 (emphasis added); see also DuBose v. Kelly, 187 F.3d 999, 1003
(8th Cir. 1999) (“The key inquiry is whether the private party was a willful participant
in the corrupt conspiracy.”).2
2
See also United Steelworkers v. Phelps Dodge Corp., 865 F.2d 1539, 1546
(9th Cir. 1989) (en banc) (A disputed issue of material fact existed as to whether
private actor conspired to violate civil rights of strikers where a reasonable jury could
infer that company’s actions were designed not only to protect workers and property,
but “reflect[ed] an intent to punish the strikers. . . . This evidence . . . goes to the most
critical issue in the case: whether Phelps Dodge intended to violate the strikers’ civil
rights.”) (emphasis added); id. at 1548-50 (Trott, J., dissenting); Fonda v. Gray, 707
F.2d 435, 438-39 (9th Cir. 1983) (“To prove a conspiracy between private parties and
the government under § 1983, an agreement or ‘meeting of the minds’ to violate
constitutional rights must be shown,” and § 1983 claim failed where plaintiff “did not
produce evidence of the existence of a ‘meeting of the minds’ between the banks and
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In this case, Dossett alleges that the Bank shared an unlawful objective with
the school officials. She asserts that the Bank willfully participated with school
officials to terminate her in retaliation for her exercise of First Amendment rights.
Although there was a good deal of evidence suggesting that the bank president was
primarily concerned that Dossett’s continued employment jeopardized the Bank’s
ability to retain the school district’s substantial bank account and other accounts,
Dossett also elicited testimony that “the basic reason” the Bank dismissed Dossett
was “the content of what she said at the school board meeting.” (Trial Tr. 5/21/03,
at 243). The Bank’s termination letter stated that Dossett was dismissed as a result
of comments she made during a school board meeting, “which were negative about
our local school board and superintendent, thereby reflecting poorly on our
community and placing at risk substantial customers of the Bank.” (J.A. at 763)
(emphases added). The district court concluded that there was a submissible issue as
to whether school officials and the Bank agreed to retaliate against Dossett, (Trial Tr.
5/22/03, at 446), and the Bank does not contest this point on appeal. As discussed,
the Bank’s submission on appeal is a broader claim that as a matter of law, a private
employer may never be liable under § 1983 for conspiring to violate the First
Amendment rights of a private employee, and we reject that proposition for the
reasons stated.
the FBI to knowingly attempt to accomplish an alleged wrongful purpose, a necessary
element of her conspiracy claim.”) (emphasis added); Kevin F. O’Malley, et al.,
Federal Jury Practice and Instructions § 167.31 (5th ed. 2001) (providing that in
claim of conspiracy to interfere with civil rights, “it must be shown by a
preponderance of the evidence that the conspiracy was knowingly formed, and that
the defendant who is claimed to have been a member knowingly participated in the
unlawful plan with the intent to advance or further some object or purpose of the
conspiracy”) (emphasis added); cf. Norton v. Liddel, 620 F.2d 1375, 1379 (10th Cir.
1980) (“[W]here a private individual actively conspires with an immune State official
(acting under color of law) with the intent to purposely and knowingly deprive an
individual of his rights secured under the Constitution and laws of the United States,
the fact that the State official is immune from suit in damages should not provide a
windfall defense to the private conspirator.”) (emphasis added).
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VI.
Dossett also appeals the district court’s denial of her motion for recusal, which
she filed after the district court ordered a new trial and revised the jury instructions.
A judge should recuse himself if his “impartiality might reasonably be questioned.”
28 U.S.C. § 455. Dossett argues that the district judge projected an appearance of
partiality when he granted a new trial on his own initiative, circulated his own set of
jury instructions that revised the elements of Dossett’s § 1983 conspiracy claim,
denied Dossett’s requests for a continuance for further discovery in light of the new
jury instruction, rejected an instruction on punitive damages, and refused to permit
discovery regarding the Bank’s claim of reliance on counsel in defense of punitive
damages. Dossett also asserts that the trial judge “assisted” the Bank’s counsel by
advising him of the ramifications of a particular line of questioning for waiver of the
attorney-client privilege, prompting counsel for the Bank to withdraw the question
to avoid waiving the privilege.
The district court’s denial of a recusal motion is committed to its sound
discretion, and we review that decision only for abuse of discretion. Moran v. Clarke,
296 F.3d 638, 648 (8th Cir. 2002) (en banc). Recusal is required when an average
person knowing all the relevant facts of a case might reasonably question a judge’s
impartiality. Id. The crux of Dossett’s claim is that the district judge’s adverse
rulings on several key issues demonstrate partiality or bias toward the Bank. Adverse
judicial rulings, however, “almost never” constitute a valid basis for recusal; the
proper recourse for a dissatisfied litigant is appeal. Liteky v. United States, 510 U.S.
540, 555 (1994); accord Fletcher v. Conoco Pipe Line Co., 323 F.3d 661, 665-66 (8th
Cir. 2003).
We find no basis in the record to conclude that the district judge showed “a
deep-seated favoritism or antagonism that would make fair judgment impossible.”
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Liteky, 510 U.S. at 555.3 The district court’s actions in this case are not even in the
same realm as the judicial partiality that arose in United States v. Singer, 710 F.2d
431, 435-36 (8th Cir. 1983), upon which Dossett relies, where we ordered recusal
when the judge guided counsel for the government through almost every element of
the trial and admitted in front of the jury that he was helping the government try its
case. The district court did not abuse its discretion in denying the motion for recusal,
and we have no reason to believe that the district court will conduct future
proceedings in this matter with anything other than judicious impartiality.
VII.
Dossett next contends that the district court erred by denying her request for
a jury instruction on punitive damages. Although Dossett frames the issue as an
objection to the court’s jury instructions, in substance she objects to the district
court’s grant of the Bank’s motions for judgment as a matter of law on her punitive
damages claims. (Trial Tr. 2/11/03, at 345; Trial Tr. 5/22/03, at 436). We review de
novo a district court’s grant of a judgment as a matter of law. Standley v. Chilhowee
R-IV Sch. Dist., 5 F.3d 319, 323 (8th Cir. 1993). Judgment as a matter of law is
appropriate when “a party has been fully heard on an issue and there is no legally
sufficient evidentiary basis for a reasonable jury to find for that party on that issue.”
Fed. R. Civ. P. 50(a). Like the district court, we do not make credibility
determinations or weigh the evidence, and we draw all reasonable inferences in favor
of the non-moving party. Standley, 5 F.3d at 323.
3
With regard to Dossett’s claim that the district court “assisted” the Bank’s
counsel regarding a matter involving potential waiver of the attorney-client privilege,
it is evident to us that the court anticipated a potential controversy over “difficult
issues about the extent of waiver,” (Trial Tr. 2/11/03, at 176-77), and thus raised the
matter with counsel in advance as part of an effort to manage the trial. We disagree
with Dossett’s contention that the court’s action evinces favoritism requiring recusal.
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Under § 1983, a jury may assess punitive damages “when the defendant’s
conduct is shown to be motivated by evil motive or intent, or when it involves
reckless or callous indifference to the federally protected rights of others.” Smith v.
Wade, 461 U.S. 30, 56 (1983). To support her claim of callous indifference, Dossett
relies on the testimony of John Nelsen, the president of the Bank, who stated that an
employee’s rights to free speech were limited if the speech harmed her employer’s
business. This evidence does not rise to the level of reckless or callous indifference
to constitutional rights. Indeed, absent willful participation in “joint action” with
state officials to retaliate for the exercise of constitutional rights, the Constitution
does not prevent the Bank, as a private actor, from terminating an employee’s at-will
employment if her public speech would damage the financial interests of the Bank.
See Manson v. Little Rock Newspapers, Inc., 200 F.3d 1172, 1173 (8th Cir. 2000).
In this case, it is undisputed that the Bank explored its options with counsel and
other persons in the banking industry for two weeks before deciding that Dossett
should be terminated. The legal issues are difficult, and the Bank’s potential liability
under § 1983 turns on subtle questions concerning its intent and motivation in
terminating Dossett, and whether it reached a “meeting of the minds” with school
officials to violate Dossett’s constitutional rights. Even assuming a jury were to find
that the Bank engaged in unlawful joint action with school officials, we do not
believe the record supports a finding that its conduct was so callous as to warrant an
award of punitive damages. Accordingly, we uphold the judgment as a matter of law
dismissing Dossett’s claim for punitive damages.
* * *
In sum, we dismiss Dossett’s appeal with respect to Lauritzen because her
notice of appeal was untimely. We affirm the district court’s grant of a new trial after
the first jury verdict, its judgment as a matter of law for the Bank on Dossett’s claim
for punitive damages, and its denial of the motion for recusal. We reverse the
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judgment for the Bank on Dossett’s § 1983 conspiracy claim after the second trial,
and remand for further proceedings consistent with this opinion.
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