Larsen v. Senate of The Commonwealth

Opinions of the United

1998 Decisions States Court of Appeals

for the Third Circuit

8-14-1998

Larsen v. Senate of The Commonwealth

Precedential or Non-Precedential:

Docket 97-7153

Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_1998

Recommended Citation

"Larsen v. Senate of The Commonwealth" (1998). 1998 Decisions. Paper 195.

http://digitalcommons.law.villanova.edu/thirdcircuit_1998/195

This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova

University School of Law Digital Repository. It has been accepted for inclusion in 1998 Decisions by an authorized administrator of Villanova

University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.

CORRECTED OPINION

Filed August 11, 1998

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 97-7153

ROLF LARSEN

v.

SENATE OF THE COMMONWEALTH OF PENNSYLVANIA;

ROY C. AFFLERBACH; ANTHONY B. ANDREZESKI;

GIBSON E. ARMSTRONG; EARL BAKER; ALBERT V.

BELAN; CLARENCE D. BELL; LEONARD J. BODACK;

MICHAEL E. BORTNER; DAVID J. BRIGHTBILL;

J. DOYLE CORMAN; MICHAEL M. DAWIDA; MICHAEL

B.

FISHER; VINCENT J. FUMO; STEWART J. GREENLEAF;

MELISSA A. HART; DAVID W. HECKLER; EDWARD W.

HELFRICK; EDWIN G. HOLL; ROXANNE H. JONES;

ROBERT C. JUBELIRER; GERALD J. LAVALLE;

CHARLES D. LEMMOND, JR.; H. CRAIG LEWIS;

J. WILLIAM LINCOLN; F. JOSEPH LOEPER; ROGER

A.

MADIGAN; BRUCE S. MARKS; ROBERT J. MELLOW;

HAROLD F. MOWERY, JR.; RAPHAEL J. MUSTO;

MICHAEL A. O'PAKE; FRANK A. PECORA; JOHN E.

PETERSON; EUGENE E. PORTERFIELD; TERRY L. PUNT;

JEANETTE F. REIBMAN; JAMES J. RHOADES;

ROBERT D. ROBBINS; FRANK A. SALVATORE;

ALLYSON Y. SCHWARTZ; TIM SHAFFER; JOHN J.

SHUMAKER; PATRICK J. STAPLETON, WILLIAM J.

STEWART; J. BARRY STOUT; RICHARD TILGHMAN; JACK

WAGNER; NOAH W. WENGER; HARDY WILLIAMS;

SUPREME COURT OF PENNSYLVANIA; ROBERT NIX;

JOHN FLAHERTY; STEPHEN ZAPPALA; NICHOLAS

PAPADAKOS; RALPH CAPPY; FRANK MONTEMURO;

RONALD CASTILLE; COMMONWEALTH OF

PENNSYLVANIA COURT OF JUDICIAL DISCIPLINE;

JOSEPH F. MCCLOSKEY; WILLIAM F. BURNS;

DAWSON R. MUTH; PETER DEPAUL; CAROL K.

MCGINLEY, CHRISTINE L. DONOHUE; JUSTIN M.

JOHNSON; WILLIAM CASSENBAUM; JUDICIAL CONDUCT

BOARD; JOSEPH A. DEL SOLE; ARTHUR J. EDMUNDS

;

DIANE M. EDMUNDSON; GERALD P. EGAN; JOHN W.

HERRON; FREDERICK WELLS HILL; MATTHEW ANITA

MACDONALD; GERALD J. O'CONNOR; ANDREW PALM;

CHARLES W. RUBENDALL, II; JAMES E. RUSSO,

BERNARD C. WATSON; WILLIAM J. ARBUCKLE, III;

BRUCE A. ANTKOWIAK; THOMAS A. BERGSTROM;

ADMINISTRATIVE OFFICE OF PENNSYLVANIA COURTS*;

NANCY M. SOBOLEVITCH; DAVID A. FRANKFORTER, in

their official and individual capacities;

INDIVIDUAL SENATORS

Chief Justice Robert N.C. Nix

(retired), Chief Justice John

Flaherty, Associate Justices

Stephen Zappala, Nicholas

Papadakos, Ralph Cappy and

Ronald Castille, and Judge Frank

Montemuro, *The Administrative

Office of Pennsylvania Courts,

Nancy M. Sobolevitch and David A.

Frankforter,

Appellants

*Dismissed pursuant to Clerk order dated 6/27/97

On Appeal from the United States District Court

for the Middle District of Pennsylvania

(No. 95-CV-01540)

Argued May 19, 1998

BEFORE: SLOVITER, GREENBERG, and GIBSON,*

Circuit Judges

_________________________________________________________________

*Honorable John R. Gibson, Senior Judge of the United States Court of

Appeals for the Eighth Circuit, sitting by designation.

2

(Filed: August 11, 1998)

Arlin M. Adams (argued)

Joseph T. Lukens

Michael J. Barry

Schnader, Harrison, Segal &

Lewis, L.L.P.

1600 Market Street, Suite 3600

Philadelphia, PA 19103

Attorneys for Appellants

Individual Justices of the

Supreme Court of Pennsylvania

Arthur G. Raynes

Harold I. Goodman

Stephen E. Raynes

Raynes, McCarty, Binder Ross &

Mundy

1845 Walnut Street, Suite 2000

Philadelphia, PA 19103

Attorneys for Appellants

Individual Administrative Office

Defendants

Cletus P. Lyman (argued)

Michael S. Fettner

Lyman & Ash

1612 Latimer Street

Philadelphia, PA 19103

Attorneys for Appellee Rolf Larsen

OPINION OF THE COURT

GREENBERG, Circuit Judge.

I. INTRODUCTION

Appellants, present and former justices and court

administrators of the Supreme Court of Pennsylvania,

3

appeal from the district court's February 28, 1997 order

denying their motion to dismiss appellee Rolf Larsen's

claims against them on qualified immunity grounds. The

district court had jurisdiction over Larsen's claims

pursuant to 28 U.S.C. S 1331 and 28 U.S.C.S 1343 as

Larsen states his claims under 42 U.S.C. S 1983 and 42

U.S.C. S 300bb. Jurisdiction over this appeal from a denial

of qualified immunity rests on 28 U.S.C. S 1291 pursuant

to the collateral order doctrine. See Mitchell v. Forsyth, 472

U.S. 511, 530, 105 S.Ct. 2806, 2817 (1985). For the

reasons that follow, we will affirm in part and reverse in

part the district court's denial of qualified immunity and

will remand the case to the district court for further

proceedings.

II. FACTUAL AND PROCEDURAL HISTORY

This case arises from appellants' June 1994 decision to

terminate the medical insurance benefits of appellee Rolf

Larsen, a former justice of the Supreme Court of

Pennsylvania, following his conviction on felony charges in

the Allegheny County Court of Common Pleas and his

suspension from office pursuant to an order of the

Pennsylvania Court of Judicial Discipline. In November

1977, Larsen was elected to a ten-year term on the

Pennsylvania Supreme Court beginning in January 1978.

In November 1987, Larsen won a retention election for a

second ten-year term beginning in January 1988. On

December 12, 1989, toward the end of Larsen's 12th year

as a Supreme Court justice, the Supreme Court adopted a

benefits plan which provided lifetime medical insurance

benefits for retired judges with ten or more years of judicial

service, regardless of their age. See app. at 93.

On July 17, 1991, the Pennsylvania Judicial Inquiry

Review Board ("JIRB"), following an investigation into

allegations of misconduct, reported to the Pennsylvania

Supreme Court that Larsen had created an appearance of

impropriety by engaging in ex parte communications with a

trial judge in a pending case. The JIRB recommended that

Larsen be reprimanded publicly. See app. at 72. On

October 14, 1992, the Supreme Court, acting through a

panel of three justices, adopted the JIRB's recommendation

4

and issued an order publicly reprimanding Larsen. See In

re Larsen, 616 A.2d 529 (Pa. 1992). Justices Zappala and

Cappy voted in favor of the order while Justice Papadakos

dissented.

On November 24, 1992, Larsen filed a petition before the

Supreme Court seeking the disqualification and recusal of

Justices Zappala and Cappy on the grounds that these

justices, together with Chief Justice Nix and other

individuals, had engaged in various forms of misconduct

involving ex parte communications, kickbacks, partiality

toward litigants and interference in pending cases. See app.

at 72-73; 769. A grand jury then commenced a nine-month

investigation into Larsen's accusations and on November 5,

1993, released a report stating that it had found evidence

of further wrongdoing by Larsen.1 The grand jury reported

that Larsen had maintained a list of petitions for allowance

of appeal to be afforded special handling by his staff and

had obtained prescription tranquilizers for his own use by

causing a physician to issue prescriptions in the names of

members of his judicial staff. See app. at 76.

The Attorney General of Pennsylvania, acting on a

presentment issued by the grand jury on October 22, 1993,

brought criminal charges against Larsen relating to his

unlawful acquisition of prescription medications. By order

dated October 28, 1993, the Supreme Court relieved Larsen

of all judicial and administrative duties as a justice, but did

not suspend his pay. See app. at 76.

On November 23, 1993, the Pennsylvania House of

Representatives adopted House Resolution Number 205

authorizing its judiciary committee to investigate Larsen.

See app. at 77. That investigation culminated in a writ of

impeachment summons which eventually resulted in

Larsen's conviction on October 4, 1994. See app. at 790.

Larsen has brought claims challenging various aspects of

_________________________________________________________________

1. While the 1992 grand jury reported no evidence to substantiate

Larsen's accusations against the other justices, the United States

District Court for the Eastern District of Pennsylvania later found that

Chief Justice Nix had interfered substantially in a pending criminal case.

See Yohn v. Love, 887 F. Supp. 773 (E.D. Pa. 1995), aff 'd in relevant

part, 76 F.3d 508 (3d Cir. 1996).

5

the impeachment proceedings. Those claims are the subject

of separate appeals before this court and thus we do not

address them in this opinion.

On April 9, 1994, after a five-day trial before the Court of

Common Pleas of Allegheny County, a jury convicted

Larsen of two counts of felony conspiracy for unlawful

procurement of controlled substances. See app. at 77.2 On

June 3, 1994, the Pennsylvania Court of Judicial Discipline

suspended Larsen from office without pay based on Article

V, S 18(d)(2) of the Pennsylvania Constitution, which

authorizes orders "directing the suspension, with or without

pay, of any justice, judge or justice of the peace .. . against

whom has been filed an indictment or information charging

a felony." See In re Larsen, 655 A.2d 239 (Pa. Ct. Judic.

Disc. 1994).

The Court of Common Pleas sentenced Larsen on June

13, 1994, and as part of its sentence removed Larsen from

judicial office pursuant to Article VI, S 7 of the Pennsylvania

Constitution, which provides that, "[a]ll civil officers shall

hold their offices on the condition that they behave

themselves well while in office, and shall be removed on

conviction of misbehavior in office or of any infamous

crime." See Larsen v. Senate of Pennsylvania , 646 A.2d

694, 697 (Pa. Commw. Ct. 1994).

In a letter dated June 17, 1994, David A. Frankforter,

Human Resources Manager for the Court Administrator of

Pennsylvania, acting on behalf of Court Administrator

Nancy Sobolevitch and the justices of the Pennsylvania

Supreme Court, notified Larsen that he was ineligible to

receive retirement medical benefits as of June 3, 1994, the

date of the Court of Judicial Discipline order suspending

Larsen without pay. See app. at 94.

Until 1993, the Pennsylvania Constitution contained a

provision mandating that, "[n]o compensation shall be paid

to any justice, judge or justice of the peace who is

suspended or removed from office. . . ." Pa. Const. art. V,

_________________________________________________________________

2. Larsen contended that the prescription tranquilizers were medically

necessary and that he had them prescribed in the names of third parties

to protect his privacy.

6

S 16(b). In a 1992 decision, the Pennsylvania Supreme

Court, analyzing the language and history of that provision,

held that its denial of "compensation" to suspended or

removed judges did not encompass retirement benefits.

Thus, the court held that judges who had been removed

from office for misconduct could not be denied retirement

benefits based on that provision. See Glancey v. State

Retirement Bd., 610 A.2d 15, 22-23 (Pa. 1992).

In 1993, section 16 was amended to provide that,

"[e]xcept as provided by law, no salary, retirement benefit or

other compensation, present or deferred, shall be paid to

any justice, judge or justice of the peace who . . . is

suspended, removed or barred from holding judicial office."

Pa. Const. art. V, S 16(b). Therefore, in contrast to the prior

version of section 16(b) which addressed only

"compensation," the 1993 version explicitly encompassed

retirement benefits and other forms of deferred

compensation and provided for the denial of such benefits

upon removal.

Larsen commenced this action on September 13, 1995,

by filing a complaint in the United States District Court for

the Middle District of Pennsylvania under 42 U.S.C.S 1983

which, insofar as material to this opinion, alleged that

appellants' June 17, 1994 decision to terminate his medical

benefits violated his rights under the Impairment of

Contracts Clause, U.S. Const. Art. I, S 10, the Due Process

and Equal Protection Clauses, U.S. Const. amend. XIV, S 1,

the First Amendment, U.S. Const. amend. I, and the Public

Health Services Act, 42 U.S.C. SS 300bb-1 et seq.

Appellants moved to dismiss Larsen's claims on the

grounds that his complaint failed to state a claim on which

relief could be granted and that his claims were barred by

the doctrine of qualified immunity. In an opinion and order

dated February 28, 1997, the district court denied

appellants' assertion of qualified immunity. See Larsen v.

Senate of the Commonwealth of Pennsylvania, 955 F. Supp.

1549, 1580 n.31 (M.D. Pa. 1997). Appellants filed a timely

notice of appeal on March 27, 1997.3

_________________________________________________________________

3. By orders dated June 18, 1997, and September 30, 1997, this appeal

was consolidated with, respectively, the appeals in numbers 97-7296

and 97-7451 which concern Larsen's challenge to his impeachment. This

opinion, however, concerns only the appeal in number 97-7153.

7

III. DISCUSSION

A. Clearly Established Rights

Initially we set forth the framework for our analysis. In

Seigert v. Gilley, 500 U.S. 226, 232, 111 S.Ct. 1789, 1793

(1991), the Supreme Court explained that when a qualified

immunity defense is raised a court first should determine

whether the plaintiff has asserted a violation of a

constitutional right at all. Only if that question is answered

affirmatively need the court determine whether the

defendant is entitled to qualified immunity on the grounds

that his conduct did "not violate clearly established

statutory or constitutional rights of which a reasonable

person would have known." Harlow v. Fitzgerald, 457 U.S.

800, 818, 102 S.Ct. 2727, 2738 (1982). The Court recently

reaffirmed this principle in County of Sacramento v. Lewis,

118 S.Ct. 1708, 1714 n.5 (1998). In this case we largely

focus on the second question because we are satisfied that

except with respect to the equal protection of the law and

the Public Health Services Act claims Larsen adequately

asserted a violation of his constitutional rights.

In considering the second question we recognize that

qualified immunity is from suit as well as from liability, so

that "[u]nless the plaintiff 's allegations state a claim of

violation of clearly established law, a defendant pleading

qualified immunity is entitled to dismissal before the

commencement of discovery." Mitchell, 472 U.S. at 526, 105

S.Ct. at 2815. For purposes of this appeal from the district

court's denial of qualified immunity based upon the

pleadings, we must accept Larsen's allegations as true and

afford him the benefit of all reasonable inferences. See Nami

v. Fauver, 82 F.3d 63, 65 (3d Cir. 1996). Appellants'

entitlement to qualified immunity under these standards is

a question of law subject to plenary review. See Pro v.

Donatucci, 81 F.3d 1283, 1285 (3d Cir. 1996); Giuffre v.

Bissell, 31 F.3d 1241, 1247 (3d Cir. 1994). 4

_________________________________________________________________

4. The district court addressed the qualified immunity issue as follows:

[appellants'] arguments in support of qualified immunity are

limited

to the same arguments they assert in support of the outright

8

A right is "clearly established" for qualified immunity

purposes only if "[t]he contours of the right" are "sufficiently

clear that a reasonable official would understand that what

he is doing violates that right." Anderson v. Creighton, 483

U.S. 635, 640, 107 S.Ct. 3034, 3039 (1982). Thus,

defendants are entitled to qualified immunity if"reasonable

officials in [their] position at the relevant time could have

believed, in light of what was in the decided case law, that

their conduct would be lawful." In re City of Philadelphia

Litig., 49 F.3d 945, 961 n.14 (3d Cir. 1995). Even where

officials "clearly should have been aware of the governing

legal principles, they are nevertheless entitled to immunity

if based on the information available to them they could

have believed their conduct would be consistent with those

principles." Acierno v. Cloutier, 40 F.3d 597, 620 (3d Cir.

1994) (citations and internal quotations marks omitted).

However, for reasonable officials to be on notice that their

conduct would be unlawful, there need not be "a previous

precedent directly on point." Acierno, 40 F.3d at 620; accord

Anderson, 483 U.S. at 640, 107 S.Ct. 3039 (holding that

the "clearly established" standard does not require that "the

very action in question has previously been held unlawful").

Rather, there need only be "some but not precise factual

correspondence between relevant precedents and the

conduct at issue," Pro, 81 F.3d at 1292 (citations and

internal quotation marks omitted), so that "in the light of

pre-existing law the unlawfulness [would be] apparent."

Anderson, 483 U.S. at 640, 107 S.Ct. at 3039. We must

_________________________________________________________________

dismissal of Larsen's claims. As the court has determined that

these

arguments provide no basis upon which to dismiss Larsen's . . .

claims, they also provide no basis upon which to afford

[appellants]

immunity from suit in their personal capacities.

Larsen, 955 F. Supp. at 1580 n.31. Thus the court did not distinguish

the issue of whether the complaint alleged viable claims for purposes of

Federal Rule of Civil Procedure 12(b)(6) from the issue of whether it

alleged violations of clearly established rights within the meaning of the

qualified immunity doctrine. Our analysis largely turns on a de novo

inquiry as to the latter issue, see Mitchell, 472 U.S. at 526, 105 S.Ct.

at

2815, as we are satisfied that for the most part Larsen adequately has

asserted a violation of his constitutional rights.

9

determine, in light of these principles, whether Larsen

alleges violations of clearly established rights. 5

B. Impairment of Contracts Clause

Appellants contend that the district court erred in

denying them qualified immunity as to Larsen's claim that

termination of his benefits violated his rights under the

Impairment of Contracts Clause, which provides that"[n]o

state shall . . . pass any . . . Law impairing the Obligation

of Contracts." U.S. Const. art. I, S 10. According to

appellants, Larsen's right to receive those benefits following

his removal from office was not clearly established, since

reasonable officials could have believed either that Larsen

was not eligible for benefits under the terms of the benefits

plan, or that Larsen, even if otherwise eligible for benefits,

lawfully could be denied those benefits pursuant to the

1993 version of Article V, section 16, of the Pennsylvania

Constitution which precludes payment of benefits to

justices who have been removed from office.

1. Eligibility Under the Retirement Benefits Pla n

Appellants contend that Larsen fails to allege a clearly

established right to receive retirement medical benefits

because, according to his complaint, the plan conferring

the right to those benefits applied only to "retired" members

of the judiciary. Thus, appellants argue, a reasonable

official "would have been justified in concluding that Larsen

was not covered" by the terms of the benefits plan since he

_________________________________________________________________

5. Larsen, br. at 14, contends that the doctrine of qualified immunity is

inapplicable because appellants' revocation of his medical benefits

involved "a ministerial, non-discretionary act." See People of Three Mile

Island v. Nuclear Regulatory Comm'rs, 747 F.2d 139, 143 (3d Cir. 1984).

We disagree. As the Supreme Court recognized in Davis v. Scherer, 468

U.S. 183, 195 n.14, 104 S.Ct. 3012, 3020 n.14 (1984), officials must

make discretionary determinations even in the course of applying facially

clear provisions. Because appellants' decision to deny Larsen's benefits

required such discretionary determinations, including legal analysis as

to the applicability of the 1993 version of section 16(b), it cannot be

characterized as a ministerial act outside the scope of the qualified

immunity doctrine.

10

had been removed from office and had not "retired"

voluntarily. Br. at 12. We disagree. As of the time

appellants decided to deny Larsen's benefits, the

Pennsylvania Supreme Court had held that judicial officers

who had been removed from office for misconduct were

entitled to receive benefits under a plan which by its terms

applied to "retired" judicial officers. In upholding removed

judges' right to receive "retirement" benefits, the

Pennsylvania Supreme Court did not find it significant that

those judges had not "retired" voluntarily from office.

Rather, the court treated them as fully eligible under the

retirement plan and proceeded to analyze whether a

separate provision of law precluded them from receiving

those benefits to which they were entitled under the plan.

See Glancey, 610 A.2d at 22-23.6 The decision in Glancey

forecloses appellants' argument that officials charged with

administering a retirement benefits plan reasonably could

construe the terms of that plan narrowly to exclude

removed judges from coverage when the Pennsylvania

Supreme Court had included such individuals in the terms

of eligibility.7

In light of this case law including individuals such as

Larsen within the terms of eligibility for retirement benefits,

and in the absence of any authority for excluding

individuals from eligibility under a retirement plan on the

_________________________________________________________________

6. Glancey resolved the cases of several different judges, some of whom

were removed while still in office and others of whom were not issued

removal orders until after they had resigned or retired. The court treated

those judges identically in terms of their eligibility for benefits under

the

retirement plan. See 610 A.2d at 22-23.

7. The Pennsylvania Supreme Court had reached similar results in cases

involving "retirement" plans for elected officials and public employees,

upholding the eligibility under such plans of individuals who did not

retire voluntarily. See Bellomini v. State Retirement Bd., 445 A.2d 737,

741 (Pa. 1982) (holding that legislators who resigned under pressure at

about the time of their criminal convictions were entitled to "retirement"

benefits); Harvey v. Retirement Bd. of Allegheny County, 141 A.2d 197,

203 (Pa. 1958) (holding that public employee who had been dismissed for

cause was entitled to "retirement" benefits); Wright v. Retirement Bd. of

Allegheny County, 134 A.2d 231, 233-34 (Pa. 1957) (holding that public

employee who had been separated involuntarily from employment was

entitled to "retirement" benefits).

11

grounds that they were involuntarily removed from office,

we find that it was clearly established that Larsen could not

be disqualified from receiving benefits under the terms of

the benefits plan. Accordingly, we must consider whether

appellants are entitled to qualified immunity on the

grounds that they reasonably could have believed that

Article V, section 16, as amended in 1993, operated to

divest Larsen of benefits which he otherwise would have

been eligible to receive.

2. Divestiture of Benefits Pursuant to Section 1 6

Appellants contend that they are entitled to qualified

immunity because a reasonable official could have believed

that their revocation of Larsen's benefits was lawful

pursuant to the 1993 version of section 16, which provides

that judges who are suspended or removed from office shall

not receive any "salary, retirement benefit or other

compensation, present or deferred." Pa. Const. art. V,

S 16(b). Larsen, however, contends that the application of

that provision violated his clearly established rights, as it

was adopted after his right to retirement benefits had

vested in 1989, at which time he had completed ten years

of service and thus had satisfied all requirements necessary

to receive full retirement benefits.8 Larsen emphasizes that

the version of section 16 in effect at the time his rights

vested did not revoke retirement benefits upon removal

from office. See Glancey, 610 A.2d at 22-23. Thus, Larsen

argues that the 1993 amendment to that provision

unilaterally altered the terms of his employment

compensation, retroactively depriving him of contractual

rights which had vested before the amendment and

violating his right against impairment of contractual

obligations. See br. at 19.

We agree. The Pennsylvania Supreme Court has held

that,

_________________________________________________________________

8. Vesting occurs when an individual "has completed the number of

years of service required for eligibility" to receive benefits under the

terms of a retirement plan. Police Pension Fund Ass'n Bd. v. Hess, 562

A.2d 391, 395 (Pa. Commw. Ct. 1989).

12

[i]t has long been recognized in Pennsylvania that the

nature of retirement provisions for public employees is

that of deferred compensation for service actually

rendered in the past. And it is the law of this

Commonwealth that unilateral modifications . . . after

retirement eligibility requirements have been met, may

not be adverse to the [employee].

Commonwealth ex rel. Zimmerman v. Officers & Employees

Retirement Bd., 461 A.2d 593, 595 (Pa. 1983) (citations

omitted). In Zimmerman, the Commonwealth sought to

terminate a public official's retirement benefits based on a

statute providing for forfeiture of the right to such benefits

upon conviction of a crime related to public office. The

court, finding that the official's vested right to retirement

benefits had accrued before enactment of the statute, held

that that right "cannot be reached by a retroactive forfeiture

provision," and thus upheld the official's right to receive

retirement benefits despite his conviction for crimes that

warranted forfeiture under the statute. See id. at 598.

In reaffirming its decision on reargument, the court

reiterated that, "[i]t is [the] attempt to divest previously

vested rights of a public . . . official by subsequent

legislative judgment that we find to be a constitutionally

impermissible retroactive divestment of vested rights."

Commonwealth ex rel. Zimmerman v. Officers & Employees

Retirement Bd., 469 A.2d 141, 142 (Pa. 1983) (per curiam).

Justice Zappala, one of four justices who joined in the

majority opinion, wrote separately "to emphasize that no

law, regardless of how noble its purpose may retroactively

affect existing contract obligations. U.S. Const. art. 1 S 10.

cl. 1. . . . Once a contractual obligation vests . .. the same

cannot be altered, amended or changed by unilateral

action." 469 A.2d at 144 (Zappala, J., concurring). We find

that these precedents analyzing an impairment of contract

claim under circumstances closely analogous to those in

the present case clearly establish that retirement benefits

could not lawfully be denied based upon a provision

adopted after the right to receive those benefits had vested.9

_________________________________________________________________

9. Because Larsen's right to retirement benefits had vested before

adoption of the 1993 constitutional amendment, we need address only

the implications of applying that amendment retroactively to previously

vested rights. Accordingly, our opinion has no application to individuals

whose rights vested after 1993.

13

Appellants contend that Zimmerman is distinguishable

because the official in that case had begun receiving

benefits before the Commonwealth sought to terminate

them. However, Zimmerman expressly noted that the court's

prior decisions had established that a subsequently

adopted provision "could not prevent the payment of

benefits to employees whose . . . rights were vested in

enjoyment" before passage of the provision. See id. at 143

(citing Bellomini v. State Employees' Retirement Bd., 445

A.2d 737 (Pa. 1982)). The court then held that the same

principle applied where the official's "right in the terms of

entitlement, although not enjoyment, had vested" before

passage of the benefits forfeiture provision. Id. Thus,

Zimmerman establishes that the dispositive time after which

an employee's right to benefits cannot be altered is the time

of the vesting of those rights "in the terms of entitlement."

In this case, Larsen's right to retirement benefits vested in

terms of entitlement in 1989, at which time he had satisfied

all conditions necessary to receive full retirement benefits,

and under the law that existed at that time, those benefits

could not be terminated upon removal from office. See

Glancey, 610 A.2d 15. Accordingly, it was clearly

established that Larsen could not be denied benefits based

upon a provision adopted in 1993.10

Numerous other Pennsylvania cases have reached the

same result precluding infringements on previously vested

rights based on rules that did not exist at the time of

vesting. In Association of Pennsylvania State College & Univ.

Faculties v. State Sys. of Higher Educ., 479 A.2d 962, 965

(Pa. 1984), the court, applying both the federal and state

Impairment of Contracts Clauses, held that the

"constitutional infirmity" of an adverse amendment of

previously existing rules "with respect to [employees] whose

entitlement to retirement benefits had already vested is

clear." Thus, the court held that the amendment was "void

_________________________________________________________________

10. Zimmerman, in dictum, distinguished the situation before it from a

situation where a removal due to misconduct would result in the

official's "failure . . . to complete the term of eligibility." See 469

A.2d at

143. This dictum does not apply to Larsen, who had satisfied the term

of eligibility before he was removed from office and before the benefits

forfeiture provision was adopted.

14

as applied to employees whose rights were vested prior to

its enactment." Id.; accord Burello v. State Employes'

Retirement Sys., 411 A.2d 852, 855 (Pa. Commw. Ct. 1980)

(citations omitted) ("[W]hen the conditions of retirement

eligibility have been satisfied, retirement pay has ripened

into a full contractual obligation and become a vested right

[which] cannot be disturbed by subsequent legislation.");

Harvey v. Allegheny County Retirement Bd., 141 A.2d 197,

203 (Pa. 1958) (holding that employee who had "complied

with all conditions necessary" to receive benefits "cannot be

affected adversely by subsequent legislation which changes

the terms of the retirement contract"); Wright v. Allegheny

County Retirement Bd., 134 A.2d 231, 233-34 (Pa. 1957)

(holding that a provision which was adopted after an

employee's rights had vested but before employee retired

could not lawfully be applied, as the employee's rights were

"vested and unqualified" under the previously existing law

and "could not be qualified or altered" by a subsequent

enactment).11

_________________________________________________________________

11. The Pennsylvania Impairment of Contracts Clause provides that,

"[n]o . . . law impairing the obligation of contracts . . . shall be

passed."

Pa. Const. art. I, S 17. Because the Pennsylvania cases discussed above

apply the federal Impairment of Contracts Clause, see, e.g., Association

of Pennsylvania State College & Univ. Faculties, 479 A.2d at 964;

Zimmerman, 469 A.2d at 144 (Zappala, J., concurring); Burello, 411 A.2d

at 855, they clearly establish Larsen's rights under federal law,

particularly absent any federal precedent to the contrary. See Mississippi

v. Miller, 276 U.S. 174, 179, 48 S.Ct. 266, 268 (1928) (holding that

"retroactive application" of a law adopted"after services have been

rendered" would deprive employee of an amount"he had theretofore

earned" and thus "would impair the obligation of the . . . contract" that

existed at the time service was rendered). In Dodge v. Board of Educ. of

Chicago, 302 U.S. 74, 77-78, 58 S.Ct. 98, 99-100 (1937), the Court

permitted an impairment of retirement benefits, but did so on the

grounds that state law rendered those benefits"mere gratuities" that did

not give rise to vested contractual rights. Thus, Dodge is inapposite in

this case where the benefits are a form of deferred compensation to

which employees have enforceable contractual rights, see Zimmerman,

469 A.2d at 142 ("[W]e have rejected the view that pension benefits are

mere gratuities . . . . [I]t is the well settled law of this jurisdiction

that

the nature of retirement provisions . . . is that of deferred compensation

for services actually rendered in the past.") (citations omitted), and

does

not alter the fact that nothing in the federal precedents blurs the

clearly

15

Appellants, br. at 12-13, argue that despite these cases

clearly holding that retroactive denials of previously vested

rights to retirement benefits unconstitutionally impair a

contractual obligation to pay those benefits, the contours of

Larsen's rights were not clearly established because cases

analyzing impairments of contract have held that afinding

of a "technical impairment is merely a preliminary step in

resolving the more difficult question of whether that

impairment is permitted under the Constitution," United

States Trust Co. v. New Jersey, 431 U.S. 1, 21, 97 S.Ct.

1505, 1517 (1976) (citations and internal quotations

omitted), and therefore have analyzed the nature, purpose,

and extent of the impairment in light of the public interests

at stake. See Association of Surrogates & Supreme Court

Reporters v. New York, 940 F.2d 766, 771 (2d Cir. 1991).

We find this argument unpersuasive. As of the time of

appellants' decision, the Pennsylvania Supreme Court had

considered and rejected the argument that public interests

in sanctioning official misconduct warranted retroactive

impairment of vested rights. The court held that,"any

_________________________________________________________________

established contours of the rights under the federal Impairment of

Contracts Clause which are set forth in the Pennsylvania cases.

In this case the provision adopted after vesting was set forth in the

state constitution whereas in the cases discussed above, the provisions

purporting to infringe the right to benefits were adopted by statute or

ordinance. However, it was clearly established that,"[a] state can no

more pass a law violating the obligation of a contract by means of a

convention than by its legislature, so a provision in a state constitution

which prohibits the enforcement of a contract is void." Fisk v. Police

Jury

of Jefferson, 116 U.S. 131, 135, 6 S.Ct. 329, 331 (1885) (citations

omitted); accord McBride v. Retirement Bd. of Allegheny County, 199 A.

130, 132-33 (Pa. 1938) ("the Contract Clause of the Federal Constitution

. . . forbids impairment by the states, not only by statute, but also by

amendment to . . . the State Constitution") (citations omitted). Moreover,

nothing in the cases addressing retroactive statutory impairments of

vested rights suggests that their holdings turn on the source of the

retroactive law. Thus, the contours of the right against retroactive

impairment were clearly established when appellants terminated

Larsen's benefits despite the lack of "precise factual correspondence"

between this case and those where the subsequently enacted provision

was statutory. See Pro, 81 F.3d at 1292.

16

argument predicated upon a compelling state interest must

necessarily fail when applied to this attempted retroactive

forfeiture" of previously vested retirement benefits. See

Zimmerman, 461 A.2d at 598.12 Thus, officials charged with

administering a retirement benefits plan could not

reasonably have believed, in light of the decided cases

construing the scope of the Impairment of Contracts

Clause, that the balance of interests rendered the

impairment of Larsen's rights lawful.

Based on the cases discussed above, we find that Larsen,

by alleging that he was deprived of previously vested rights

pursuant to a provision adopted after vesting, has alleged a

violation of clearly established rights under the Impairment

of Contracts Clause of which reasonable officials charged

with administering retirement benefits would have known.13

_________________________________________________________________

12. The court explained that benefit forfeiture provisions are powerless

to

deter official misconduct that occurred before their enactment. See 461

A.2d at 598. The misconduct leading to Larsen's removal occurred well

before the 1993 adoption of the amended section 16, bringing this case

squarely within the rationale of Zimmerman's holding that the public

interest in enforcing benefit forfeiture provisions did not outweigh the

constitutional interests in protecting vested contractual rights to

retirement benefits against retroactive impairment.

13. Appellants also contend that they are entitled to qualified immunity

because it was not clearly established that retirement medical benefits

were to be treated in the same manner as other forms of retirement

benefits. See br. at 11-12. We reject this contention. It was clearly

established that "the nature of retirement provisions . . . is that of

deferred compensation for services actually rendered in the past."

Zimmerman, 469 A.2d at 142-43 (citations omitted). Retirement medical

benefits, like other retirement benefits, are an item of economic value

offered in return for work performed, and thus fall squarely within the

principles set forth in the cases discussed above. Indeed, to accept

appellants' argument we would have to close our eyes to what we know

in this era of high medical costs, that medical benefits are of crucial

importance to retired employees. Moreover, while the Pennsylvania

Supreme Court had not applied this rule in the precise context of

medical benefits, it had indicated in dictum that it would do so. See,

e.g.,

In re Upper Providence Police Delaware County Lodge No. 27, 526 A.2d

315, 322 n.6 (Pa. 1987) (citing deferred compensation cases for the

proposition that denial of medical benefits would"pose serious

constitutional problems"); Lower Merion Fraternal Order of Police Lodge v.

17

We hold, therefore, that appellants are not entitled to

qualified immunity as to Larsen's claim that their

termination of his medical benefits unconstitutionally

impaired his contractual right to those benefits.

C. Due Process

The Due Process Clause provides that "[n]o state shall

. . . deprive any person of life, liberty, or property without

due process of law." U.S. Const. amend. XIV,S 1. Larsen

claims that appellants violated his due process rights by

terminating his medical benefits as they did so without

providing him notice and either a pre- or post- revocation

hearing. Br. at 22. Appellants answer that, because Larsen

had no clearly established property interest in medical

benefits for retired members of the judiciary, their

_________________________________________________________________

Lower Merion Township, 512 A.2d 612, 619 (Pa. 1986) (noting that three

justices of equally divided court would treat medical benefits like any

other form of deferred compensation while three justices would resolve

case on grounds that did not implicate the issue). Thus, despite the lack

of a precedent "directly on point," the law was sufficiently clearly

established that a reasonable official would have known that an action

that was unlawful as to other forms of retirement benefits also would be

unlawful as to retirement medical benefits. See Acierno, 40 F.3d at 620.

In holding that retroactive application of a provision adopted after

vesting violates rights of which a reasonable official charged with

administering retirement benefits would have known, we recognize that

Larsen alleges that both Supreme Court justices and court

administrators participated in the decision to deny his benefits.

Although, under certain circumstances, a reasonable judicial officer

might be held to more stringent standards than a reasonable court

administrator, the cases proscribing retroactive divestment of vested

rights are sufficiently clear that any reasonable official, whether

judicial

or administrative, charged with administering a retirement benefits

program should have known of this proscription. We also recognize that

the judicial officers and court administrators may have played different

roles in the decision to deny Larsen's benefits. However, at this

juncture,

the pleadings do not elucidate the nature of each appellant's

participation in the challenged decision. Accordingly, we address only the

principles of law of which reasonable officials in any of the appellants'

positions should have known in participating in a decision to deny

vested benefits.

18

cancellation of Larsen's benefits did not violate clearly

established rights under the Due Process Clause of which

a reasonable official would have known. Appellants,

however, do not deny that if Larsen had a property interest

in his medical benefits he was entitled to some sort of

hearing with respect to their termination. See, e.g.,

McDaniels v. Flick, 59 F.3d 446, 453-61 (3d Cir. 1995).

For the purposes of the Due Process Clause, property

interests are defined by state law. See Board of Regents v.

Roth, 408 U.S. 564, 569, 577, 92 S.Ct. 2701, 2709 (1972);

Kelly v. Borough of Sayreville, 107 F.3d 1073, 1077 (3d Cir.

1997). Larsen contends that he had a clearly established

property right to the benefits associated with his office,

since he had a contractual right to those benefits, and it

was "clearly established that contractual rights are property

interests under the Due Process Clause of the Fourteenth

Amendment." Br. at 22. We find merit in this argument

because it is clear that a contract right is a "form of

property." United States Trust Co., 431 U.S. at 19 n.16, 97

S.Ct. at 1516 n.16. Thus, inasmuch as "in Pennsylvania

. . . the nature of retirement provisions for public employees

is that of deferred compensation for services actually

rendered in the past," Zimmerman, 461 A.2d 597, Larsen

had a property interest in his right to medical benefits that

was sufficiently clear that appellants should have

understood that the termination of those benefits triggered

Larsen's right under the Due Process Clause to an

opportunity to be heard regarding his claim of entitlement

to those benefits. Anderson, 483 U.S. at 640, 107 S.Ct. at

3039.14

_________________________________________________________________

14. Appellants contend that since the Pennsylvania Supreme Court had

held that elected public officials have no constitutionally protected

property interest in their elected public office, see In re 1991

Pennsylvania Legislative Reapportionment Comm'n, 609 A.2d 132 (Pa.

1992), it was reasonable for them to infer that there was no

constitutionally protected right to the benefits associated with that

public office. Br. at 15. We disagree. A holding than an elected official

does not have a property right in his office is completely distinguishable

from the situation at hand which involves deferred compensation for

services rendered.

19

Appellants contend that even if Larsen had a clearly

established property interest in his medical benefits "a

reasonable state official would be justified in concluding

that Larsen received all the process to which he was

entitled before the cancellation of his health care benefits."

Br. at 15-16. Specifically, appellants argue that Larsen had

ample opportunity to challenge his impeachment in the

Senate, his criminal conviction in the state courts, and his

suspension by the Court of Judicial Discipline. Id. at 15.

We reject this argument because, while these proceedings

allowed Larsen to contest the basis for his suspension and

removal from office, none of them afforded him an

opportunity to address the distinct issue of whether

medical benefits lawfully could be terminated as a result of

that suspension and removal. Since Larsen was not

afforded an opportunity to be heard regarding the propriety

of terminating his medical benefits, reasonable officials

could not have believed that Larsen received the process he

was due in connection with a deprivation of a clearly

established property right. Accordingly, appellants are not

entitled to qualified immunity with respect to Larsen's due

process claim.15

D. Equal Protection

Appellants contend that they are entitled to qualified

immunity as to Larsen's claim that the denial of his medical

benefits violated his rights under the Equal Protection

Clause, which provides that "[n]o state shall. . . deny to

any person within its jurisdiction the equal protection of

the laws." U.S. Const. amend. XIV, S 1. We agree. Larsen

asserts that he was denied equal protection of the law

because he was denied retirement benefits following his

removal from office, whereas judges who had been removed

for misconduct in the past had received such benefits

notwithstanding their removal. Since Larsen does not allege

that appellants violated a fundamental right or relied on a

_________________________________________________________________

15. We do not find it necessary to address the question of what

opportunity to be heard should have been afforded Larsen as appellants

offered him no such opportunity at all either before or after

Frankforter's

June 17, 1994 letter.

20

suspect or quasi-suspect classification, their actions, in

order to comport with the Equal Protection Clause, need

have only a rational relationship to a legitimate state

interest. See Tolchin v. Supreme Court of New Jersey, 111

F.3d 1099, 1113 (3d Cir.), cert. denied, 118 S.Ct. 435

(1997); Dyszel v. Marks, 6 F.3d 116, 125 (3d Cir. 1993).16

According to appellants, reasonable officials could believe

that they had a rational basis for treating Larsen differently

from judges removed in the past, since there had been an

intervening constitutional amendment which served the

rational and legitimate objective of preventing"officials who

have been removed from office for breaching the public's

trust from benefitting from the . . . public purse." Br. at 17.

We agree and in fact are satisfied that Larsen's equal

protection claim does not adequately allege a violation of a

constitutional right at all and thus does not satisfy the first

prong of the Siegert test. See 500 U.S. at 232, 111 S.Ct. at

1793. The Equal Protection Clause does not require

identical treatment of all individuals, but rather permits

differential treatment of individuals who are differently

situated in some relevant respect. See Nordlinger v. Hahn,

505 U.S. 1, 10, 112 S.Ct. 2326, 2331 (1992). Thus,

individuals who are differently situated in terms of their

"legitimate expectation and reliance interests" rationally

may be subjected to different rules designed to afford

greater protection to those with heightened legitimate

expectations. Id. at 13 (citations omitted) (upholding

imposition of greater tax burden on those who acquired

property after change in tax law based on their lesser

expectation interests as compared to those who owned

property before change in law). Because Larsen was

removed from office at a time when the Pennsylvania

Constitution provided for denial of benefits upon removal,

his position was different from that of judges who were

removed when no such provision existed.17 Accordingly,

_________________________________________________________________

16. Suspect classifications involve traits such as race, national origin,

or

alienage, while quasi-suspect classifications involve traits such as

gender. See Dyszel, 6 F.3d 125 n.13.

17. The difference in the law at the time of removal creates a distinction

which a reasonable official could believe was a rational basis, under the

21

there was a rational basis for treating Larsen differently

from judges removed from office before the 1993

constitutional amendment, and appellants are entitled to

dismissal of Larsen's equal protection claim.

E. First Amendment

Larsen contends that appellants' revocation of his

benefits violated his right of free speech under the First

Amendment because it was a form of retaliation for his

protected speech in alleging misconduct on the part of his

fellow Supreme Court justices. To state a claim for

actionable retaliation under the First Amendment, the

plaintiff must allege facts which, if proven, would establish

that the plaintiff 's protected First Amendment activity was

a "substantial or motivating factor in the alleged retaliatory

action." Feldman v. Philadelphia Hous. Auth. , 43 F.3d 823,

829 (3d Cir. 1994). This rule is derived from the Supreme

Court's opinion in Mount Healthy City Sch. Dist. Bd. of

Educ. v. Doyle, 429 U.S. 274, 287, 97 S.Ct. 568, 576

(1977).

In support of their assertion that they are entitled to

qualified immunity as to Larsen's First Amendment claim,

appellants contend, br. at 18-19, that they could have

_________________________________________________________________

Equal Protection Clause, for treating Larsen differently from the judges

removed before 1993, thus entitling appellants to qualified immunity

under the second prong of the Siegert analysis even if Larsen's

allegations satisfied the first prong. While a reasonable official could

believe that the 1993 constitutional amendment created a distinction

between different judges depending on their status at the time of its

adoption, which provided a "rational basis" for differential treatment

within the meaning of the equal protection jurisprudence, as discussed

in Part III. B 2, supra, a reasonable official could not believe that the

1993 amendment may be applied retroactively to deny previously vested

rights, as the impairment of contracts jurisprudence clearly proscribes

such retroactive impairments. Because of the divergent standards under

these distinct constitutional provisions, we find that reasonable

officials

could believe that the decision to deny Larsen's benefits did not violate

clearly established equal protection principles but could not believe that

this decision did not violate clearly established impairment of contracts

principles.

22

believed that their decision to revoke Larsen's benefits was

not unconstitutionally retaliatory because they could have

believed that they were required to apply the 1993 version

of section 16, and thus that they would not be liable under

the First Amendment as they would have reached the same

decision " `even in the absence of the protected conduct.' "

Givhan v. Eastern Line Consol. Sch. Dist., 439 U.S. 410,

416, 99 S.Ct. 693, 697 (1979) (quoting Mount Healthy v.

Doyle, 429 U.S. at 287, 97 S.Ct. at 576). Appellants'

argument requires the court to apply the objective

reasonableness standards of the qualified immunity

doctrine to the subjective element of a First Amendment

retaliation claim, and thus calls for the somewhat illogical

inquiry into "whether a person reasonably could have

thought that he in fact thought something." Sheppard v.

Beerman, 94 F.3d 823, 828 (2d Cir. 1996).

The qualified immunity analysis requires a determination

as to whether reasonable officials could believe that their

conduct was not unlawful even if it was in fact unlawful.

See In re City of Philadelphia Litig., 49 F.3d at 961 n.14. In

the context of a First Amendment retaliation claim, that

determination turns on an inquiry into whether officials

reasonably could believe that their motivations were proper

even when their motivations were in fact retaliatory. Even

assuming that this could be demonstrated under a certain

set of facts, it is an inquiry that cannot be conducted

without factual determinations as to the officials' subjective

beliefs and motivations, and thus cannot properly be

resolved on the face of the pleadings, but rather can be

resolved only after the plaintiff has had an opportunity to

adduce evidence in support of the allegations that the true

motive for the conduct was retaliation rather than the

legitimate reason proffered by the defendants. See

Sheppard, 94 F.3d at 828-29.18

_________________________________________________________________

18. In this respect the qualified immunity analysis as to a First

Amendment retaliation claim differs from the qualified immunity analysis

as to claims under the Impairment of Contracts or Due Process Clause,

which requires only an objective analysis of whether reasonable officials

could believe that the challenged actions conformed to objective

standards of conduct.

23

According to Larsen's allegations, which we must accept

as true for purposes of this appeal from an order entered

on the pleadings, the true motive for appellants' decision

was retaliation for his protected speech. See app. at 72-73;

96-97. Appellants may be able to establish by the end of

discovery that their decision in fact rested on a good faith

belief, which they would have formed even in the absence

of any protected speech, that they were to required to

revoke Larsen's benefits under the 1993 version of section

16. However, at this juncture, we must accept Larsen's

allegations that their true reasons were retaliatory,

allegations which state a claim for violation of clearly

established rights under the First Amendment, precluding

dismissal on qualified immunity grounds. See Walker v.

Schwalbe, 112 F.3d 1127, 1133 (11th Cir. 1997) (rejecting

assertion of qualified immunity on grounds that defendants'

proffer of non-retaliatory reason created factual dispute as

to "true reason" for the adverse action and did not defeat

claim for violation of clearly established right against

retaliatory action); see also Azzaro v. County of Allegheny,

110 F.3d 968, 981 (3d Cir. 1997) (holding that assertion of

non-retaliatory reason which would have justified decision

even in absence of protected activity created factual issue

precluding summary judgment as to retaliation claim).

In reaching this result we are not suggesting that a bare

allegation of retaliatory motive necessarily is sufficient to

defeat an assertion of qualified immunity as to a retaliation

claim. In some circumstances, the legitimate basis for the

actions might be so apparent that the plaintiff 's allegations

of retaliatory motive could not alter the conclusion that

under the circumstances alleged in the pleadings, the

defendants would have been compelled to reach the same

decision even without regard for the protected First

Amendment activity. In this case, however, appellants were

faced with a decision as to whether to subject Larsen to the

more adverse 1993 version of section 16, a decision whose

outcome, under the circumstances alleged by Larsen, could

have been affected by a retaliatory motive.19 Thus we

_________________________________________________________________

19. To defeat a First Amendment retaliation claim if a plaintiff

demonstrates that his protected First Amendment activity was a

24

cannot conclude from the face of the pleadings that

appellants would have taken the same action in the

absence of protected speech. Accordingly, appellants are

not entitled, at this preliminary stage of the litigation, to

qualified immunity as to Larsen's First Amendment

retaliation claim.

F. Public Health Services Act

Appellants contend that they are entitled to qualified

immunity as to Larsen's claim that the termination of his

benefits violated his rights under the Public Health Services

Act, 42 U.S.C. SS 300bb-1 et seq. ("PHSA"). The PHSA

provides that state-operated group health plans must offer

18 months of continuing coverage to qualified beneficiaries

who otherwise would lose coverage as a result of a

"qualifying event." 42 U.S.C. SS 300bb-1(a), 300bb-2(2). The

PHSA defines the term "qualifying event" to include

"termination (other than by reason of [the] employee's gross

misconduct)." Section 300bb-3(2).

Appellants contend that Larsen did not have a clearly

established right to continuing coverage under the PHSA,

because reasonable officials could believe that Larsen's

termination was not a "qualifying event" within the meaning

of the PHSA entitling him to elect continuing coverage.

According to appellants, reasonable officials could conclude

that Larsen's termination was "by reason of . . . gross

misconduct," thus excluding his termination from the

definition of a "qualifying event" under section 300bb-3(2),

and rendering him ineligible for coverage under section

_________________________________________________________________

substantial or motivating factor for the retaliatory action, a defendant

must establish not merely that he "could properly" have taken the same

adverse action based on an independent "legally sufficient" reason, but

also that he "would have" done so in the absence of protected conduct.

Bradley v. Pittsburgh Bd. of Educ., 913 F.2d 1064, 1075 (3d Cir. 1990).

The mere fact that the 1993 version of section 16 provided for

termination of benefits upon removal would not defeat Larsen's

retaliation claim if he could demonstrate that appellants decided to apply

that provision, rather than the more lenient version of section 16 that

existed at the time of vesting, due to retaliatory animus.

25

300bb-1(a). In support of their argument that Larsen's

termination reasonably could be viewed as a termination

"by reason of . . . gross misconduct," appellants emphasize

that Larsen had been convicted of two felony counts,

removed from office by the Court of Common Pleas as part

of his criminal sentence, suspended from office by the

Court of Judicial Discipline for his criminal conduct which

that court found had undermined public confidence in the

judiciary, and called before the Senate on a writ of

impeachment summons. Br. at 20-21.

Neither the PHSA, nor the comparable statute applicable

to private employers, defines the term "gross misconduct."

See 42 U.S.C. SS 300bb-1 et seq.; 29 U.S.C. SS 1161 et seq.20

Moreover, as of the time appellants decided to terminate

Larsen's benefits, the cases construing these provisions had

not set forth a clear definition of "gross misconduct" under

the PHSA.21 These cases, however, had applied the

standard to conduct which reasonable officials could believe

was no more egregious than Larsen's conduct in unlawfully

procuring controlled substances through the use of his

subordinates. See, e.g., Burke v. American Stores Employee

Benefit Plan, 818 F. Supp. 1131 (N.D. Ill. 1993) (holding

that use of improperly procured promotional discount

vouchers to obtain free products from employer's retail

outlets constituted gross misconduct); Adkins v. United Int'l

Investigative Servs., Inc., 1993 WL 345186 (N.D. Cal. 1993)

(holding that leaving post unattended and falsifying records

to receive additional paychecks constituted gross

misconduct); Conery v. Bath Assocs., 803 F. Supp. 1388,

1396 (N.D. Ind. 1992) (holding that misappropriation of

_________________________________________________________________

20. The analogous provision governing private employers is set forth in

the Consolidated Omnibus Budget Reconciliation Act ("COBRA"), 29

U.S.C. S 1161(a), which requires the employer to offer continuing

coverage to employees who otherwise "would lose coverage under the

plan as a result of a qualifying event."

21. In Burke v. American Stores Employee Benefit Plan, 818 F. Supp.

1131, 1135 (N.D. Ill. 1993), the court, applying 29 U.S.C. S 1161(a),

noted that, "[t]here is little direct statutory or judicial guidance on

the

meaning of `gross misconduct.' " While the Burke court looked to Illinois

state law for guidance, we have not made any comparable state-law

analysis.

26

funds constituted gross misconduct). We are satisfied from

these cases and from the language of the PHSA that Larsen

has not adequately alleged a violation of the PHSA and thus

his complaint with respect to that statute does not pass

muster under the first prong of a Siegert analysis.

Moreover, even if it did, because a reasonable official could

believe that the acts which resulted in Larsen's termination

amounted to gross misconduct, it was not clearly

established that Larsen's termination was a "qualifying

event" triggering his right to coverage under the PHSA.

Larsen contends that, regardless of the egregiousness of

his conduct, it cannot be characterized as "gross

misconduct" under the PHSA because it did not occur

"within the scope of his employment as an associate

justice." Br. at 26-27. However, nothing in the statutory

language or relevant case law clearly establishes, or even

suggests, that "gross misconduct" under the PHSA must

occur within the scope of employment. Accordingly, it

appears that a reasonable official applying the plain

language of the PHSA could conclude that any termination

which occurred "by reason of [the] employee's gross

misconduct" would fall within the exception to section

300bb-3(2) and thus would not constitute a "qualifying

event" entitling the employee to continuing coverage,

regardless of whether the conduct occurred within the

scope of employment.22 Because Larsen did not adequately

allege a violation of the PHSA and because, therefore, there

was no clearly established law indicating that Larsen's

termination was a qualifying event under section 300bb-

3(2), appellants are entitled to qualified immunity as to

Larsen's claim under the PHSA.

_________________________________________________________________

22. Even if it were clearly established that"gross misconduct"

encompassed only misconduct within the scope of employment, a

reasonable official could believe that Larsen's conduct was sufficiently

related to his employment to satisfy such a requirement. As the district

court noted, 955 F. Supp. at 1581 & n.33, the criminal misconduct

which led to Larsen's removal from office involved Larsen's use of his

subordinates and his state employees' prescription plan to procure

prescription medications unlawfully. Absent some authority to the

contrary, reasonable officials could conclude that this nexus between

Larsen's misconduct and his employment would satisfy any requirement

in that regard.

27

IV. CONCLUSION

For the foregoing reasons, we hold that Larsen's

complaint alleges violations of clearly established rights

under the Impairment of Contracts Clause, the Due Process

Clause, and the First Amendment. Therefore, appellants are

not entitled to qualified immunity with respect to those

claims and, accordingly, we will affirm the district court's

denial of their motion to dismiss those claims on qualified

immunity grounds. However, Larsen's complaint fails to

allege violations of his rights under the Equal Protection

Clause or the Public Health Services Act. We therefore will

reverse the denial of appellants' motion to dismiss those

claims and on remand the district court should dismiss

those claims on qualified immunity grounds. In summary,

we will affirm in part, will reverse in part, and will remand

this case to the district court for further proceedings

consistent with this opinion.

A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Circuit

28