United States District Court, D. Arizona
Order Filed: July 31, 2014
[Copyrighted Material Omitted]
Dale Gorney, Plaintiff, Pro se, Tucson, AZ.
For Arizona Board of Regents, Steve Husman, Allison Vaillancourt, Jacqueline Lee Mok, Dan Nelson, Thomas P Miller, Defendants: Rebecca Jane Herbst, LEAD ATTORNEY, Office of the Attorney General, Phoenix, AZ.
Cindy K. Jorgenson, United States District Judge.
Plaintiff Dale Gorney, who is proceeding pro se, filed this case alleging that he was wrongfully terminated from his employment at the University of Arizona. (Doc. 32, First Amended Complaint (FAC).) Defendants filed a Motion to Dismiss the FAC, and Plaintiff opposed. (Docs. 33, 34.) Magistrate Judge Charles P. Pyle issued a Report and Recommendation (R & R) recommending that the Motion to Dismiss be granted. (Doc. 38.) Plaintiff filed objections to the R & R, and Defendants have filed a response. (Doc. 39, 40.)
The Court will overrule Plaintiff's objections, adopt the R & R, grant the Motion to Dismiss, and terminate the action.
I. Governing Standard
The Court reviews de novo the objected-to portions of the Report and Recommendation. 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b). The Court reviews for clear error the unobjected-to portions of the Report and Recommendation. Johnson v. Zema Systems Corp., 170 F.3d 734, 739 (7th Cir. 1999); See also, Conley v. Crabtree, 14 F.Supp.2d 1203, 1204 (D. Or. 1998).
II. Procedural Background
Plaintiff filed his action in state court, and Defendants removed the case to the federal district court. Defendants moved to dismiss, and this Court dismissed the complaint with leave to amend. (Doc. 25.) On October 23, 2013, Plaintiff filed his FAC. (Doc. 32.) Plaintiff alleges that he was wrongly terminated from his employment at the University of Arizona (UA) after he made three " disclosures" of wrongful employee conduct and asserted rights under the Arizona Board of Regents whistleblower policy (ABOR Policy 6-914). He names as Defendants the Arizona Board of Regents; Steve Husman, Director of the UA Tucson Area Agricultural Center; Jacqueline Lee Mok, UA Senior Vice President and Chief of Staff, Office of the President; Thomas P. Miller, UA Associate Provost of Faculty Affairs; and Allison Vaillancourt, UA Vice President, Human Resources. (FAC ¶ 11.) Plaintiff asserts claims for (1) wrongful termination in violation of public policy; (2) violation of 42 U.SC. § 1983; (3) retaliation under the Fair Labor Standards Act (FLSA); (4) breach of implied-in-law covenant of good faith and fair dealing; and (5) tortious interference with contract. He seeks reinstatement of employment; an employment contract; backpay; reimbursement for money spent and early withdrawals from
his IRA due to his termination; general damages for emotional distress caused from stress due to financial repercussions of his termination; and punitive damages. (FAC ¶ ¶ 29-32.)
Defendants move to dismiss the FAC, arguing, among other things, that Plaintiff failed to appeal from the University's decision discharging him from employment by filing an action in Superior Court under the Administrative Review Act, Ariz. Rev. Stat. § 12-901 et seq. , and that this failure precludes him from filing the claims raised in the FAC. (Doc. 33.)
III. Factual Allegations
Plaintiff does not object to the factual allegations as stated in the R & R, and the Court adopts them. Briefly, the facts show that between March 18 and April 26, 2011, Plaintiff filed a series of complaints (disclosures) regarding his supervisor and several Defendants. He was advised that the matters did not rise to the level of matters of public concern, and he was told to meet with appropriate supervisors.
Plaintiff claimed overtime incurred in drafting the disclosures. (FAC ¶ ¶ 10.18, 23.1.) Defendant Husman, Plaintiff's supervisor, " required [Plaintiff] on more than one occasion to meet personally with him to discuss overtime and extra work hours...related to the disclosure(s)." (FAC ¶ 23.2).) Plaintiff claimed the disclosures were confidential and refused to meet with Defendant Husman. (FAC ¶ 23.2) Plaintiff was given a Written Warning, placed on Disciplinary Probation, and given a pre-discharge notice for his repeated refusal to meet with Defendant Husman to discuss his overtime claims. ( Id.; see also FAC ¶ 8 (Plaintiff refused to meet with Defendant Husman while on disciplinary probation).) Plaintiff also refused to meet with Defendant Husman for the disciplinary probation and pre-discharge meetings, because Plaintiff claimed that such " directives to meet with him were illegal." (FAC ¶ 23.4.) On May 25, 2011, Defendant Husman terminated Plaintiff for cause. (FAC ¶ 24.2.)
Plaintiff requested a post-termination hearing under University Policy 406.0. (FAC ¶ 24.2.) A hearing was held on May 15, 2012, and on June 22, 2012, the review panel issued the Hearing Decision upholding Plaintiff's termination. (FAC ¶ 25; see also Doc. 33, Ex. B.) On July 13, 2012, Defendant Mok accepted the panel's recommendation denying Plaintiff's appeal. (FAC ¶ 25.1; see also Doc. 33, Ex. C.) Plaintiff requested reconsideration of the decision, and on July 26, 2012, Defendant Mok affirmed her decision. (FAC ¶ 25.3; see also Doc. 33, Ex. D.) In her letter denying the request for reconsideration, Defendant Mok advised that Plaintiff had the right to appeal her decision to the Superior Court pursuant to A.R.S. § 12-901, Arizona's Administrative Review Act, and that such appeal must be filed within 35 days from the date on which Plaintiff was served with the decision denying his
request for reconsideration. (Doc. 33, Ex. D.)
It is undisputed that Plaintiff did not seek an appeal pursuant A.R.S. § 12-901. Instead, he filed a separate complaint in state court which Defendants removed to this Court.
A. Preclusion and the Eleventh Amendment
Magistrate Judge Pyle concluded that because Plaintiff failed to file an appeal with the state superior court pursuant to the state's Administrative Review Act, Ariz. Rev. Stat. § 12-901 et seq. , within 35 days of receipt of Mok's decision denying reconsideration, Plaintiff is precluded from bringing his claims for wrongful termination, under both state-law and § 1983; his claim for FLSA overtime, and his claim for breach of the implied covenant of good faith and fair dealing. (Doc. 38 at 9-12.) Plaintiff objects to the R & R, arguing that claim preclusion does not apply to his claims and that the Bd. of Regents waived its Eleventh Amendment immunity when it removed the case to federal court. (Doc. 39 at 2.)
First, Plaintiff relies on Federated Dept. Stores, Inc. v. Moitie, 452 U.S. 394, 403, 101 S.Ct. 2424, 69 L.Ed.2d 103 (1981), asserting that there are cases in which res judicata must give way " to what the Court of Appeals referred to as 'overriding concerns of public policy and simple justice.'" (Blackmun, J., concurring in the judgment.) But in Federated Dept. Stores, Inc., the Supreme Court reversed the determination of the Ninth Circuit Court of Appeals, which had refused to apply res judicata. The concurrence cited by Plaintiff noted that this case was " clearly not one in which equity requires that the doctrine give way. Unlike the nonappealing party in Reed [ v. Allen, 286 U.S. 191, 209, 52 S.Ct. 532, 76 L.Ed. 1054 (1932)], respondents were not 'caught in a mesh of procedural complexities.'" (Cardozo, J., joined by Brandeis and Stone, JJ., dissenting) ( " A system of procedure is perverted from its proper function when it multiplies impediments to justice without the warrant of clear necessity." ) In fact, the Court in Federated Dept. Stores, Inc., recognized the public policy considerations in applying principles of res judicata:
The doctrine of res judicata serves vital public interests beyond any individual judge's ad hoc determination of the equities in a particular case. There is simply " no principle of law or equity which sanctions the rejection by a federal court of the salutary principle of res judicata." (Internal citation omitted.) The Court of Appeals' reliance on " public policy" is similarly misplaced. This Court has long recognized that " [p]ublic policy dictates that there be an end of litigation; that those who have contested an issue shall be bound by the result of the contest, and that matters once tried shall be considered forever settled as between the parties."
452 U.S. at 401.
Plaintiff further argues 28 U.S.C. § 1738 requires federal courts to give the same preclusive effect to state court judgments that those judgments would be given in the courts of the State from which the judgments emerged" but that here there has been no state court judgment because Defendants removed the case. (Doc. 39 at 3-4, citing Migra v. Warren City Sch. District Bd. of Ed., 465 U.S. 75, 81, 104 S.Ct. 892, 79 L.Ed.2d 56 (1984).) He concludes that Article VI of the Constitution contains authority for the Court to apply Lapides v. Bd. of Regents of Univ. System of Ga., 535 U.S. 613, 122 S.Ct. 1640, 152 L.Ed.2d 806 (2002), which held
that a State's act of removing a lawsuit from state court to federal court waives its Eleventh Amendment immunity from state-based claims. But in Embury v. King, the Ninth Circuit noted that its holding extending Lapides to federal claims did not apply to cases where Congress acted beyond its power over the States and had not validly abrogated the State's immunity through the Fourteenth Amendment. Embury v. King, 361 F.3d 562, 566, n. 20 (9th Cir. 2004). As this Court has previously held, because Congress has not validly abrogated the States' sovereign immunity on FLSA claims, see Alden v. Maine, 527 U.S. 706, 712, 119 S.Ct. 2240, 144 L.Ed.2d 636 (1999), the Board did not waive its immunity on Plaintiff's FLSA claim by removing this action to federal court. ( See Doc. 25 at 6.)
In addition, to the extent that Plaintiff is arguing that by removing the case to federal court Defendants waived their preclusion defense the Court disagrees. Plaintiff cites no authority for this argument. Lapides, on which Plaintiff apparently relies, addresses waiver of Eleventh Amendment immunity, not waiver of all defenses. As the Supreme Court noted, its holding is limited " to the context of state-law claims, in respect to which the State has explicitly waived immunity from state-court proceedings." 535 U.S. at 617. The Court overrules the objection.
Here, Plaintiff identifies nothing that would justify rejection of issue preclusion/res judicata in this case.
B. Full and Fair Opportunity to Litigate the Issues
Plaintiff also argues that he did not have a full and fair opportunity to litigate his claims because (1) as previously found by this Court, he filed suit well before the one year statute of limitations and the Administrative Review Act allows only 35 days to file suit and (2) he would not have access to the Arizona Appellate Courts because under the Administrative Review Act, he would have to go straight to the Arizona Supreme court for his appeal. (Doc. 39 at 4-5.) He claims that " the issue is not claim preclusion regarding a state board acting in a judicial capacity but one of validity (what is a lawsuit) and the statute of limitations." ( Id. at 5.) He argues that the Administrative Review Act is " out of step" with Arizona's Rules of Civil Procedure and Appellate Procedure. ( Id. at 5-6.) He objects to the Magistrate Judge's application of United States v. Utah Constr. & Mining Co., which Plaintiff argues applied to government contracts and dispute clauses. ( Id. at 5.) Plaintiff does not dispute the R & R finding that the Arizona Board of Regents is an agency subject to the state's Administrative Review Act. ( See Doc. 38 at 6.)
The R & R notes that " [w]hen a state agency acts in a judicial capacity to resolve disputed issues of fact and law properly before it, and when the parties have had an adequate opportunity to litigate those issues, federal courts must give the state agency's fact-finding and legal determinations the same preclusive effect to which it would be entitled in that state's courts." (Doc. 38 at 6, citing Olson v. Morris, 188 F.3d 1083, 1086 (9th Cir. 1999) (citing University of Tennessee v. Elliott, 478 U.S. 788, 798-99, 106 S.Ct. 3220, 92 L.Ed.2d 635, (1986).) Plaintiff argues that Olson states that courts " have denied ...