Juarez v. Aguilar

Case: 10-40611 Document: 00511619342 Page: 1 Date Filed: 09/30/2011

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT United States Court of Appeals

Fifth Circuit

FILED

September 30, 2011

No. 10-40611 Lyle W. Cayce

Clerk

ANTONIO JUAREZ,

Plaintiff-Appellee

v.

ROLANDO AGUILAR, Brownsville Independent School District Board of

Trustees, Individually and in their Official Capacity; RUBEN CORTEZ, JR.,

Brownsville Independent School District Board of Trustees, Individually and

in their Official Capacity; JOE COLUNGA, Brownsville Independent School

District Board of Trustees, Individually and in their Official Capacity; RICK

ZAYAS, Brownsville Independent School District Board of Trustees,

Individually and in their Official Capacity,

Defendants-Appellants

Appeal from the United States District Court

for the Southern District of Texas

Before WIENER, BENAVIDES, and STEWART, Circuit Judges.

CARL E. STEWART, Circuit Judge:

Before the court is the interlocutory appeal of Defendants-Appellants

Rolando Aguilar, Ruben Cortez, Jr., Joe Colunga, and Rick Zayas (collectively,

“Appellants”) from the district court’s denial of summary judgment. Appellants,

all members of the Brownsville Independent School District (“BISD”) Board of

Trustees (“Board”), argue that the district court should have granted their

motion for summary judgment because they are entitled to qualified immunity.

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We AFFIRM the judgment of the district court.

I.

On August 12, 2008, the BISD hired Plaintiff-Appellee Antonio Juarez

(“Juarez” or “Appellee”) as its Chief Financial Officer (“CFO”) pursuant to a one-

year contract.1 As CFO, Juarez made insurance recommendations to BISD’s

Board. One such endorsement recommended American Administration

General’s (“AAG”) bid as the best for the BISD’s Stop Loss Insurance Coverage

Contract. Juarez’s recommendation created tension with members of the Board.

Aguilar, Cortez, and Colunga accused Juarez of misinforming the Board

regarding the AAG recommendation, while Cortez and Colunga opposed the

recommendation and accused Juarez of lying. Cortez and Colunga complained

to Hector Gonzales, then-BISD Superintendent.

Shortly after the AAG recommendation, Kent Whittemore, an employee

of BISD, initiated a grievance contending that Juarez had lied to the Board.

Juarez alleges that Whittemore’s grievance was filed at the Appellants’ behest,

a tactic aligned with BISD’s practice of “setting one employee to grieve against

another,” so as to afford pretext when terminating employees. Whittemore’s

grievance was consolidated with a second Whittemore grievance and both were

heard on January 20, 2009.

Gonzales responded to the controversy by offering Juarez a new position.

According to Juarez, Gonzales told Juarez in November 2009 that if Juarez were

to resign as CFO, Gonzales would reassign him as the BISD’s Grants

Administrator. Gonzales would later execute an affidavit in which he averred

that he “understood, and believed [he] was conveying to Juarez that if Juarez

performed satisfactorily in his newly assigned position, [Gonzales] would not

1

Because of the limitations on our jurisdiction, we base our factual summary on

the Background section of the district court’s order and the evidence submitted by

Appellee.

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have a problem to recommend renewal of [Juarez’s] contract in the new position

beyond the existing term of the contract, although, [Gonzales] never specifically

told him that using those words.” Juarez resigned as CFO on November 24,

2008, with an acceptance of reassignment.

Between his resignation and the hearing concerning the Whittemore

grievances on January 20, 2009, Juarez recorded conversations with Elizabeth

Brito-Hatcher, a BISD employee, and Otis Powers, a former Trustee of BISD.

According to the evidence submitted by Juarez, Brito-Hatcher told Juarez that

the BISD was engaged in bidding irregularities, while Powers urged Juarez to

file a grievance against Gonzales. Powers suggested to Juarez that if Juarez

would file a grievance against Gonzales and blame Gonzales for the statement

about the insurance recommendation, Juarez would be reinstated as CFO.

Powers also told Juarez that BISD employees routinely used the filing of

grievances as a way of advancing their careers.

On January 15, 2009, Juarez and his legal counsel approached the FBI

with allegations of improprieties at BISD. During the meeting, Juarez told the

FBI that the Appellants were “manipulating the bidding process for the [BISD]’s

Stop [Loss] Insurance Coverage.” He also told the FBI about his meetings with

Powers and Brito-Hatcher and played for the FBI his tape-recorded

conversations.

The next day, Juarez filed a grievance based on his experience with the

BISD and his conversations with Powers and Brito-Hatcher. Juarez also

expressed concern that his abstention from the conspiracy to manipulate the

bidding process would result in his termination. He says that he also rescinded

his letter of resignation and asked to be restored as CFO. His grievance was

later dismissed when Juarez and his legal counsel refused to participate on the

grounds that the presiding officer at his hearing was a complained-of party in

Juarez’s grievance. His request for review at the next level of the grievance

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process was denied.

On January 20, 2009, counsel for Juarez objected to the continuance of

Whittemore’s grievance hearing on several grounds and stated that any action

flowing from the hearing “[would] be retaliat[ory].” He further said that he

“think[s] the Board is aware that Mr. Juarez has reported this activity to the law

enforcement agencies.” Thereafter, neither Juarez’s original contract as CFO

nor his reassignment as Grants Administrator were renewed.

Juarez subsequently filed this suit. He alleges Appellants retaliated

against him for exercising his First Amendment right to report illegal activity

to law enforcement. His suit named Appellants in their official and individual

capacities and alleged that the BISD violated the Texas Open Meetings Act, and

that the Board conspired to manipulate the insurance bidding procedures.

Appellants sought dismissal based on qualified immunity. The district court

converted their motion to one for summary judgment and dismissed Juarez’s

Fourteenth Amendment Due Process claims brought pursuant to 42 U.S.C.

§ 1983; denied summary judgment on the retaliation claims brought against the

Appellants in their official and individual capacities pursuant to § 1983; and

further held that Appellants were not entitled to qualified immunity on

summary judgment. The district court ruled that genuine issues of fact existed

with respect to whether the Appellants’ actions violated Juarez’s rights under

the First Amendment and whether those rights were clearly established at the

time Appellants allegedly violated them. This interlocutory appeal followed.

II.

This court has limited jurisdiction to conduct an interlocutory review of a

district court’s order denying a motion for summary judgment based upon

qualified immunity. “Although a denial of a defendant’s motion for summary

judgment is ordinarily not immediately appealable, . . . the denial of a motion for

summary judgment based upon qualified immunity is a collateral order capable

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of immediate review.” Kinney v. Weaver, 367 F.3d 337, 346 (5th Cir. 2004). Our

jurisdiction extends to these appeals only “to the extent that [the denial of

summary judgment] turns on an issue of law.” Id. (quoting Mitchell v. Forsyth,

472 U.S. 511, 530 (1985)). We review the district court’s conclusions concerning

the legal consequences of the facts de novo. Kinney, 367 F.3d at 349.

Because of our limited jurisdiction, we only review certain aspects of a

district court’s denial of an official’s motion for summary judgment based on

qualified immunity. We have explained our jurisdiction to hear these

interlocutory appeals by distinguishing between the two components of the

district court’s order: first, the decision that a “certain course of conduct would,

as a matter of law, be objectively unreasonable in light of clearly established

law”; and second, the decision that a “genuine issue of fact exists regarding

whether the defendant(s) did, in fact, engage in such conduct.” Kinney, 367 F.3d

at 346. When hearing interlocutory appeals of denials of summary judgment

motions, our jurisdiction extends only to reviewing the district court’s first

determination, i.e., that a “certain course of conduct” would be “objectively

unreasonable” as a matter of law. It does not extend to the district court’s

second determination that a genuine issue of fact exists as to whether appellant

engaged in a “course of conduct” that is “objectively unreasonable.” Id. at 346-

47. Accordingly, we do not apply to such appeals the Rule 56 standard that

normally governs appeals of motions for summary judgment.

Instead, our precedent sets forth a two-step process to determine whether

the “certain course of conduct” was “objectively unreasonable” as a matter of law.

We first determine whether the official’s conduct violated plaintiff’s

constitutional rights. Id. at 356. Then, we determine whether “the contours of

[plaintiff’s] right [were] sufficiently clear [at the time of the alleged violation]

that a reasonable official would understand that what he is doing violates that

right.” Id. at 356-57 (quoting Anderson v. Creighton, 483 U.S. 635, 640 (1987)).

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In determining whether a “certain course of conduct” would be “objectively

unreasonable” as a matter of law, we “consider only whether the district court

erred in assessing the legal significance of the conduct that the district court

deemed sufficiently supported for purposes of summary judgment.” Id. at 348

(citing Behrens v. Pelletier, 516 U.S. 299, 313 (1996); Johnson v. Jones, 515 U.S.

304, 313 (1995)). “Where factual disputes exist in an interlocutory appeal

asserting qualified immunity, we accept the [plaintiff’s] version of the facts as

true.” Id. at 348 (citation omitted). We do not have jurisdiction to rule on

contentions that require us to resolve factual disputes in defendant’s favor. Id.

A.

We first examine whether Appellants’ conduct violated Appellee’s First

Amendment right to be free from retaliation for protected speech. To establish

a retaliation claim, plaintiffs must prove the following elements: “(1) the plaintiff

suffered an adverse employment decision, (2) the plaintiff’s speech involved a

matter of public concern, (3) the plaintiff’s interest in speaking outweighed the

governmental defendant’s interest in promoting efficiency, and (4) the protected

speech motivated the defendant’s conduct.” Id. at 356. Adverse employment

decisions include “discharges, demotions, refusals to hire, refusals to promote,

and reprimands.” Sharp v. City of Houston, 164 F.3d 923, 933 (5th Cir. 1999).

To establish liability against the government employees in their official capacity,

plaintiffs must additionally show that “the execution of a policy, custom, or

practice of the board caused the adverse action.” Banks v. E. Baton Rouge

Parish Sch. Bd., 320 F.3d 570, 579-80 (5th Cir. 2003).

Appellants raise a number of challenges to the district court’s order with

respect to these elements. Because we do not have jurisdiction to decide the

contentions requiring us to overturn the fact-finding of the district court or to

rule on the admissibility of the evidence considered by the district court, we

reject these challenges. Our jurisdiction does extend to questions about the

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“legal materiality” of the facts, so we will consider appellants’ argument that a

government board can only make an “adverse employment decision” by way of

a formal vote.

1.

Our jurisdiction does not permit us to consider several issues raised by

Appellants. A number of Appellants’ contentions effectively challenge the

district court’s holding that Appellee raised material issues of fact with respect

to the elements of a retaliation claim. Appellants argue, for instance, that the

evidence shows they did not make the adverse employment decision and

therefore cannot be held responsible for it; that they did not know of the

Appellee’s protected speech; and that the protected speech did not cause the

adverse employment decision. All of these arguments, however, implicate

factual disputes, and Appellee responds to each with allegations that contradict

the Appellants’ narrative. According to the evidence presented by the Appellee,

the Board and Gonzales collaborated to evade policy guidelines with respect to

Juarez’s employment; the Board knew about the protected speech because

Juarez’s attorney had told them about it; and this knowledge caused the Board

to decide not to renew Juarez’s contract. To hold for Appellants with respect to

these contentions, we would need to resolve these factual disputes in Appellants’

favor. Our limited jurisdiction prevents us from doing so. See Kinney, 367 F.3d

at 348. Accordingly, we reject such challenges.

We also do not have jurisdiction to decide whether the district court

erroneously considered hearsay evidence in denying Appellants’ motion for

summary judgment. Appellants challenge the admission of two items of

evidence: an affidavit Appellee submitted to the district court describing what

his attorney said during an executive session of a meeting, and Appellee’s

description of a meeting he had with Powers in early January 2009. For the

purposes of deciding this interlocutory appeal, our jurisdiction over challenges

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to the admissibility of evidence extends only to evidence that is “critical” to the

district court’s denial of a summary judgment motion. See Mersch v. City of

Dall., 207 F.3d 732, 734-35 (5th Cir. 2000). Further, we only have jurisdiction

over “immunit[ies] from suit,” not over “mere defense[s] to liability.” See Swint

v. Chambers Cnty. Comm’n, 514 U.S. 35, 43 (1995).

These standards are not met here. The assertion that officials were not

acting pursuant to official policy for the purposes of § 1983 liability “ranks as a

‘mere defense to liability.’” Id. (citing Mitchell v. Forsyth, 472 U.S. 511, 526

(1985)). The district court only cited the challenged evidence to support its

conclusion that fact issues remained as to whether the Board had acted pursuant

to official policy. Appellants’ contention that the district court erred in this

respect is thus only a “defense to liability.” See id. Because we lack jurisdiction

over “defenses to liability” at this stage of the proceedings, we cannot review

whether the district court appropriately considered the challenged evidence

when deciding whether appellants were acting pursuant to official policy.

Appellants’ attempt to avoid this jurisdictional limitation is unavailing.

Appellants argue that, in addition to providing support for the district court’s

determination that the Board acted pursuant to official policy, the challenged

evidence also led the district court “to infer that the Trustees were generally bad

men who must have retaliated somehow when Juarez refused to join them.” In

effect, they argue that the district court considered the challenged evidence

without citing it when the court found that the fourth prong of the First

Amendment retaliation test was satisfied. The Appellants provide no support

for this assertion. In any event, we have already discussed the district court’s

explanation for ruling that Appellants had not defeated summary judgment with

respect to each element of a First Amendment retaliation claim. This discussion

demonstrated that the district court found a bona fide factual dispute regarding

whether the Board’s actions caused the adverse employment decision, even

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without the “bad men” inferences purportedly drawn by the district court.

Accordingly, the challenged evidence was plainly not “critical” to the district

court’s denial of the motion for summary judgment on the elements of a First

Amendment retaliation claim. We therefore do not have jurisdiction to conduct

an interlocutory review of the district court’s consideration of hearsay evidence.

2.

Appellants further maintain that the district court erred in determining

that a school board can make an “adverse employment decision” in the absence

of a formal vote. The district court found that an issue of fact existed as to

whether Appellants entered into an informal agreement to refuse to renew

Appellee’s contract. Appellants argue, in essence, that even if such an

agreement existed, it would not rise to the level of retaliation for protected

speech under Fifth Circuit precedent. Because this contention concerns the

“legal significance” of facts, we have jurisdiction to consider it. Kinney, 367 F.3d

at 348.

Appellants argue that “adverse employment decisions” can only occur

through formal votes. They note that for a defendant to be liable under § 1983

for retaliation, the defendant must have been the “final decision-maker.” See

Johnson v. State of La., 369 F.3d 826, 831 (5th Cir. 2004). Appellants also point

to a case in which a governmental body was held not to be the “final decision-

maker” when it did not vote. See James v. Tex. Collin Cnty., 535 F.3d 365, 374

(5th Cir. 2008). However, neither of these cases held that the “adverse

employment decisions” of collective bodies can only result from recorded votes.

Such a rule finds support neither from our case law nor from the purposes of §

1983.

Instead, our precedent indicates that informal decisions such as the

alleged agreement between the Board and Gonzales can be “adverse employment

decisions” subject to the same protections as formal decisions. In James, this

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court considered a First Amendment retaliation claim brought by a municipal

employee against county commissioners. We granted summary judgment in

favor of the commissioners because we determined that the commissioners were

not the final decision-maker with respect to that particular employment

decision. Id. at 374. James does not, however, stand for the proposition that

final decision-makers always hold formal votes. While we pointed to evidence

indicating that the commissioners had not voted, the lack of a formal vote was

just one item of evidence we considered in deciding whether the commissioners

were the final decision-maker. Id. We provided no indication that we considered

the lack of a vote conclusive. See id. In addition, we reviewed evidence

presented by the employee to determine whether the commissioners had entered

into an “agreement” to fire the employee. See id. While we did not find

sufficient evidence of an “agreement” to defeat summary judgment, our

willingness to consider such evidence of an “agreement” demonstrates our belief

that something less than a formal vote can serve as the basis for an adverse

employment decision.

In related contexts, this court has applied similar reasoning. We have

written, for instance, that informal governmental policies can establish § 1983

liability against individuals acting in their official capacity to the same extent

as formal governmental policies can. See Johnson v. Rodriguez, 110 F.3d 299,

312 (5th Cir. 1997). This further supports the conclusion that deprivations

subject to § 1983 liability do not result only from formal government actions. See

id.

Additionally, a rule that punishes formal retaliation but foregoes

punishment when the same end is accomplished informally would undercut the

purpose of § 1983. Such a rule would only encourage municipalities to conduct

their business off-the-record. Given that such an incentive structure would

likely make state abuses of power more common rather than less, the

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Appellants’ proposed rule does not promote the purposes envisioned by Congress

when it enacted liability under § 1983. See Wyatt v. Cole, 504 U.S. 158, 161

(1992) (“The purpose of § 1983 is to deter state actors from using the badge of

their authority to deprive individuals of their federally guaranteed rights and

to provide relief to victims if such deterrence fails.”)

For these reasons, we will not extend our precedent to exempt decisions

made through informal procedures from the category of “adverse employment

decisions” that can result in liability under § 1983. Even if an adverse

governmental decision does not result from a formal vote, the “final decision-

maker” responsible for that adverse employment decision is subject to individual

liability if her decision was motivated by impermissible considerations.2

B.

Finding no error in the district court’s holding that genuine issues of fact

exist with respect to whether Appellants violated Appellee’s First Amendment

rights, we next consider whether Appellants are entitled to qualified immunity.

Officials are shielded from liability for civil damages as long as their conduct

“does not violate clearly established statutory or constitutional rights of which

a reasonable person would have known.” Harlow v. Fitzgerald, 457 U.S. 800,

818 (1982). “Qualified immunity should not be denied unless the law is clear in

the more particularized sense that reasonable officials should be ‘on notice that

their conduct is unlawful.’” Kinney, 367 F.3d at 350 (quoting Saucier v. Katz,

533 U.S. 194, 206 (2001)). “The central concept is that of ‘fair warning’: The law

can be clearly established ‘despite notable factual distinctions between the

2

We emphasize that this holding is narrow. While we hold that adverse

employment actions need not result from formal votes, our limited jurisdiction prevents

us from evaluating the sufficiency of Appellee’s evidence in any respect. It is for the

district court to decide on remand whether Appellee has shown that Appellants’

conduct satisfied each of the elements of a retaliation claim under the First

Amendment.

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precedents relied on and the cases then before the Court, so long as the prior

decisions gave reasonable warning that the conduct then at issue violated

constitutional rights.’” Id. (quoting Hope v. Pelzer, 536 U.S. 730, 740 (2002)).

Appellants have not shown their entitlement to qualified immunity at this

stage of the proceedings. Appellee’s retaliation claim is straightforward. He

alleges that because he informed the FBI of illegal activities, the Appellants

entered into an agreement with Gonzales not to extend Appellee’s contract.

Assuming Appellee’s allegations are true, Kinney, 367 F.3d at 348, such conduct

would fall well within the clearly established elements of retaliation in violation

of Appellee’s First Amendment rights. With respect to the issues we can

consider on this appeal, the only distinction between this case and the previous

cases we have decided is the fact that Appellants did not formally vote when

making the alleged adverse employment decision. That this court has not

previously considered an identical fact pattern does not mean that a litigant’s

rights were not clearly established. See id. at 350. As long as the officials

received fair notice that their conduct violated the litigant’s rights, the right was

clearly established. See id. In this case, it would have been unreasonable for the

Appellants to believe that the absence of a formal vote would absolve them of

liability. As we explained above, the conclusion that informal actions can result

in liability follows clearly from the precedent of this court and the Supreme

Court. This was sufficient to provide Appellants with fair notice that even an

informal decision to retaliate against Appellee would violate Appellee’s First

Amendment rights. Accordingly, the district court did not err when it denied

summary judgment on Appellants’ qualified immunity defense.

III.

For these reasons, the district court’s denial of qualified immunity is

AFFIRMED. We REMAND for further proceedings consistent with this

opinion.

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