Boreen v. Christensen

No. 96-011

IN THE SUPREMECOURT OF THE STATE OF MONTANA

1996

.~~

KATHARINE S. BOREEN, formerly

known as KATHARINE SELBY,

Plaintiff and Appellant,

GEORGECHRISTENSEN, a/k/a GEORGEP. CHRISTENSEN,

a/k/a "CHRIS" CHRISTENSEN, and F. GUY YOUNGBLOOD,

acting individually and in the capacities of

administrative officers of the DEPARTMENT OF

MILITARY AFFAIRS, STATE OF MONTANA,

Defendants and Respondents

APPEAL FROM: District Court of the First Judicial District,

In and for the County of Lewis & Clark,

The Honorable Jeffrey Sherlock, Judge presiding.

COUNSEL OF RECORD:

For Appellant:

Peter Michael Meloy (argued); Meloy & Morrison,

Helena, Montana

For Respondents:

Hon. Joseph P. Mazurek, Attorney General,

James M. Scheier (argued), Ass't Attorney General,

Helena, Montana

Submitted: September 10, 1996

Decided: December 30, 1996

Filed:

Justice W. William Leaphart delivered the Opinion of the Court.

Plaintiff Katharine S. Boreen (Boreen) appeals the September

14, 1995 Order of the First Judicial District Court, Lewis and

Clark County, granting qualified immunity to Defendant F. Guy

Youngblood (Youngblood) and dismissing Boreen's 42 U.S.C. § 1983

claim as to Defendant Youngblood. We affirm.

We consider the following issue on appeal:

Did the District Court err in granting Defendant Youngblood

qualified immunity on the basis that Boreen's property interest in

her employment was not clearly established law at the time she was

constructively discharged by the Defendants?

Factual and Procedural Backsround

Boreen was employed by the Montana Department of Military

Affairs. Following her resignation from her employment in April

1990, Boreen filed a complaint against the Department of Military

Affairs, alleging constructive discharge under the Montana Wrongful

Discharge From Employment Act. That action was dismissed because

it was filed after the statute of limitations had passed. Boreen

then filed a complaint pursuant to 42 U.S.C. 5 1983 (§ 1983)

alleging that she was terminated from her employment with the

Department of Military Affairs, and that she was deprived of a

property interest in her employment without due process of law.

Youngblood, one of the named Defendants, filed an answer to the

complaint. Boreen then filed an amended complaint, alleging that

2

she was constructively discharged from her employment. Youngblood

filed an answer to the amended complaint, raising, inter alia, the

affirmative defense of qualified immunity. Youngblood also filed

a motion to dismiss or for summary judgment. Youngblood made two

primary arguments in his motion to dismiss: (1) government

employees who are not covered by a collective bargaining agreement

or a contract for a specific duration do not have a property

interest in their employment; and (2) he was entitled to qualified

immunity. Youngblood also argued that the amended complaint was

barred by res judicata and collateral estoppel.

Following a hearing, in a November 16, 1993 Order, the

District Court granted Youngblood's motion to dismiss on the ground

that Boreen had no property interest in her employment. The

District Court rejected the argument that Boreen's complaint was

barred by res judicata and collateral estoppel. The District Court

declined to rule on the question of whether Youngblood was entitled

to qualified immunity.

Boreen submitted an interlocutory appeal of the November 16,

1993 Order to this Court, which reversed the District Court's

decision. Boreen v. Christensen (1994), 267 Mont. 405, 884 P.2d

761 (Boreen I). This Court determined that Boreen, whose

employment was subject to "just cause" requirements for

termination, had a property interest in her employment and could

therefore maintain an action under § 1983. The issues of qualified

immunity, res judicata, and collateral estoppel were not before

this Court in that initial appeal.

The case was remanded to District Court where Youngblood

renewed his motion to dismiss or for summary judgment upon the

grounds of qualified immunity, i-es judicata, and collateral

estoppel. In a September 14, 1995 Order, the District Court held

that it had already rejected Youngblood's motion for dismissal on

the basis of res judicata or collateral estoppel and resolved the

case on the issue of qualified immunity. The Court granted

Youngblood qualified immunity on the basis that he did not violate

any of Boreen's clearly established rights of which a reasonable

person should have known.

Boreen obtained a Rule 54 (b), M.R.Civ.P., certification

authorizing an interlocutory appeal of the Court's September 14,

1995 Order since the Order effectively dismissed the case as

against both defendants.

Standard of Review

The question of whether a district court properly granted

qualified immunity involves a determination of whether the rights

in question were clearly established at the time of their alleged

violation, and is a question of law, reviewable, de nova. Cannon

v. City and County of Denver (10th Cir. 1993), 998 F.2d 867;

Williams v. Commonwealth of Kentucky (6th Cir. 1994), 24 F.3d 1526.

In Montana, the standard of review of a district court's

conclusions of law is whether the court's interpretation of the law

4

is correct. Carbon County v. Union Reserve Coal Co., Inc. (1995),

271 Mont. 459, 469, 898 P.2d 680, 686.

ISSUE

Was the District Court correct in holding that Boreen's

property interest in her employment was not clearly established law

at the time she was constructively discharged from her employment,

thereby rendering Youngblood immune from suit?

The District Court dismissed Boreen's 5 1983 claim against

Youngblood on the grounds that Youngblood is entitled to qualified

immunity. Because § 1983 is a federal remedy, qualified immunity

from a 5 1983 suit is a matter of federal law. Finch v. Wemlinger

(Minn. 1981), 310 N.W.Zd 66, 69-70; Cooperman v. University Surg.

Assoc., Inc. (Ohio 1987), 513 N.E.2d 288, 296 (superseded by state

statute in 1990).

The purpose of granting qualified immunity to public officers

is not to protect them from the consequences of their wrongful acts

but to facilitate the proper operation of government by protecting

public officers in the discharge of their duties where they act

honestly and in good faith. Rickard v. Paradis (1975), 167 Mont.

450, 539 P.2d 718. The good faith requirement has since been

modified as set forth below.

The theory of qualified immunity first arose as a defense for

police officers in Pierson v. Ray (1967), 386 U.S. 547, 87 S.Ct.

1213, 18 L.Ed.Zd 288. The United States Supreme Court in Scheuer

v. Rhodes (1974), 416 U.S. 232, 94 S.Ct. 1683, 40 L.Ed.2d 90,

expanded the defense to apply to a broader group of executive

branch officers. Rhodes arose out of the shootings at Kent State

5

University in 1970. The plaintiffs alleged that Rhodes, then

Governor of the State of Ohio, recklessly deployed the National

Guard to the Kent State campus. Rhodes, 416 U.S. at 232. The

Supreme Court found that a qualified immunity should be available

to officers of the executive branch of government because of the

wide range of discretion that officers of the executive branch are

called upon to exercise. Rhodes, 416 U.S. at 247. The Court found

that:

It is the existence of reasonable grounds for the belief

formed at the time and in light of all the circumstances,

coupled with good-faith belief, that affords a basis for

qualified immunity of executive officers for acts

performed in the course of official conduct.

Rhodes, 416 U.S. at 247-48. The Court explored the contours of the

doctrine of qualified immunity through subsequent decisions that

discussed an "objective" versus a "subjective" test of good faith.

See Wood v. Stricklund (19751, 420 U.S. 308, 95 S.Ct. 992, 43

L.Ed.2d 214. An official's subjective good faith belief as to

whether he or she violated the plaintiff's constitutional rights

was no longer relevant after Harlow v. Fitzgerald (1982), 457 U.S.

800, 102 S.Ct. 2727, 73 L.Ed.Zd 396. The standard for granting

qualified immunity was reformed in this matter:

We therefore hold that government officials performing

discretionary functions generally are shielded from

liability for civil damages insofar as their conduct does

not violate clearly established statutory or

constitutional rights of which a reasonable person would

have known.

.

On summary judgment, the judge appropriately may

determine, not only the currently applicable law, but

whether that law was clearly established at the time an

6

action occurred. If the law at that time was not clearly

established, an official could not reasonably be expected

to anticipate subsequent legal developments, nor could he

fairly be said to "know" that the law forbade conduct not

previously identified as unlawful . the defense would

turn primarily on objective factors.

Harlow, 457 U.S. at 818-19.

Harlow and its progeny make clear that the qualified immunity

inquiry is an objective one. a, e.g., Davis v. Scherer (19841,

468 U.S. 183, 104 S.Ct. 3012, 82 L.Ed.2d 139. The qualified

immunity inquiry focuses on whether a defendant, faced with

circumstances similar to those of the defendant before the court

and in light of the legal authorities extant at the time the

defendant acted, reasonably should have known that his or her

conduct was unlawful. Qualified immunity "gives ample room for

mistaken judgments by protecting all but the plainly incompetent or

those who knowingly violate the law." Hunter v. Bryant (1991), 502

U.S. 224, 229, 112 S.Ct. 534, 537, 116 L.Ed.2d 589, 596 (quoting

Malley v. Briggs (1986), 475 U.S. 335, 343, 106 S.Ct. 1092, 1097,

89 L.Ed.2d 271, 280).

Harlow presents a two-pronged test to determine whether an

official will be granted qualified immunity. The court must first

consider whether a clearly established right has been violated and

second, the court must determine whether a reasonable person or

official would have known that his conduct violated that right.

Sacco v. High Country Indep. Press (19951, 271 Mont. 209, 216, 896

P.2d 411, 415.

The first prong of the Harlow qualified immunity test depends

on whether the constitutional right allegedly violated was clearly

7

established at the time of the official conduct giving rise to the

litigation. See Finkelstein v. Bergna (9th Cir. 1991), 924 F.2.d

1449; Burgess v. Pierce County (9th Cir. 1990), 918 F.Zd 104.

The plaintiff has the burden of proving that the right which

the defendants allegedly violated was clearly established at the

time of the alleged misconduct. Baker v. Racansky (9th Cir. 1989),

887 F.Zd 183, 186.

A defendant need not have actual knowledge of a decision which

the plaintiff claims clearly established the law. Neither should

the defendant be required to have actual knowledge of a decision

upon which he relies to show that the law was not clearly

established. a, e.9., Mitchell v. Forsyth (1985), 472 U.S. 511,

105 s.ct. 2806, 86 L.Ed.Zd 411; Anderson v. Creighton (1987), 483

U.S. 635, 107 S.Ct. 3034, 97 L.Ed.Zd 523.

In the present case, Boreen alleges that she had a clearly

established protected property interest in her employment with the

Department of Military Affairs when she was constructively

discharged from her job by Youngblood in April of 1990.

Youngblood is raising the qualified immunity defense on the

basis that Boreen's protected property interest in her employment

was not a clearly established right at the time she was

constructively discharged. Although this Court held that Boreen

did have a protected property interest in her employment in Boreen

I, we must ask whether this property interest was a clearly

established right in 1990 when Boreen was constructively

discharged.

8

The United States Supreme Court has not established the

requisite hierarchy of law from which to determine whether a right

is clearly established. See, e.g., Harlow, 457 U.S. at 818 n.32

(expressly leaving this question open). Whether a United States

Supreme Court decision is necessary, whether circuit courts may

look to lower federal court decisions, and whether state decisional

law plays a role are questions disputed among circuit courts. See

Richard B. Saphire, Qualified Immunity in Section 1983 Cases and

the Role of State Decisional Law, 35 Ariz. L. Rev. 621, 633 (1993).

Circuit courts are in agreement that the determination of whether

the right in question is clearly established begins with a relevant

United States Supreme Court decision if available. See

-I e&L,

Thomas v. Whalen (6th Cir. 1995), 51 F.3d 1285.

The United States Supreme Court's seminal case establishing an

employee's property interest in employment is Cleveland Board of

Education v. Loudermill (1985), 470 U.S. 532, 105 S.Ct. 1487, 84

L.Ed.2d 494. In Loudermill, the Court held that an Ohio statute

which protected a public employee's employment during "good

behavior and efficient service" and prohibited dismissal "except

for misfeasance or nonfeasance in office" created a property

interest in continued employment which could not be taken away

without appropriate procedural safeguards. The Court concluded in

Loudermill that the "just cause" provision in the Ohio statute

created such a property interest.

The Court in Loudermill did not hold that all employees whose

employment is subject to "just cause" or "for cause" protection

9

have a property interest in their employment. Rather, the Supreme

Court held that the language in the Ohio statute, which provided

that an employee could not be fired except for specific listed

reasons, gave the plaintiff a property interest in his job under

Ohio law. Loudermill, 470 U.S. at 538-39. The Ohio laws expressly

provided that employees were classified civil servants who were

entitled to hold positions of employment, and that they were

entitled to hold their positions during good behavior and efficient

service. The Ohio employees' pay could not be reduced, nor could

they be suspended, or removed from their positions, except for

specific statutory violations. Loudermill, 470 U.S. at 538.

The Supreme Court decision in Loudermill emphasized that

property interests "are not created by the Constitution, they are

created and their dimensions are defined by existing rules or

understandings that stem from an independent source such as state

law." Loudermill, 470 U.S. at 538 (quoting Board of Regents v.

Roth (1972), 408 U.S. 564, 577). Thus the question of whether a

property interest exists must be examined by reference to state

law. Bishop v. Wood (1976), 426 U.S. 341, 344, 96 S.Ct. 2074,

2077, 48 L.Ed.2d 684, 690. The Loudermill decision, therefore, did

not answer the question of whether a public employee in Montana has

a property interest in his or her employment.

The "just cause" provision analyzed in Loudermill was

contained in an Ohio statute whereas the "just cause" provision

Boreen claims protection under is found in a Montana administrative

rule. Rule 2.21.6509, ARM. In addition, Montana has an "at will"

10

employment statute, § 39-Z-503, MCA, which has been construed as

providing no property interest in employment absent a "specified

term" of employment. Reiter v. Yellowstone County (1981), 192

Mont. 194, 627 P.2d 845. Loudermill did not address, nor did it

resolve, the issue of whether a "just cause" regulation converts an

employment "at will" to employment for a specified term. It is

necessary then to examine Montana law as expressed by this Court

and the federal courts interpreting Montana law to determine if

Boreen had a property interest in her employment in 1990.

This Court described the issue of whether a public employee in

Montana had a property right in employment as one of "first

impression" in Boreen I. Boreen I, 884 P.2d at 763. The Court

confirmed that "a close reading of our prior cases clarifies that

we have not heretofore decided the issue presented in the instant

case . .'I Boreen I, 884 P.2.d at 769. While the nonexistence

of a decision specifically addressing the alleged right is a

"significant consideration" in determining whether the right is

clearly established, Fortner v. Thomas (11th Cir. 1993), 983 F.2d

1024, 1028, the plaintiff need not produce a case directly on point

to show that a right was clearly established. Ostlund v. Bobb (9th

Cir. 1987), 825 F.2d 1371, 1374. Nonetheless, the contours of the

right allegedly violated must be sufficiently clear that a

reasonable official would understand that what he is doing violates

that right. Anderson, 483 U.S. at 640.

Montana has an "at will" employment statute providing that an

employment with "no specified term" may be terminated by either

11

party on notice to the other. Section 39-2-503, MCA. Under that

law, as construed by this Court prior to April 1990, such "at will"

employees not covered by any written contract or collective

bargaining agreement had no property interest in their employment.

Reiter, 627 P.2d at 849. In Reiter this Court considered the case

of a county custodian whose employment was terminated after

eighteen years of service. In rejecting Reiter's argument that he

had a property interest in his employment, this Court stated:

It is clear . . that property interests are created and

defined by state law. The Montana statute [§ 39-2-503,

MCA] creates no property interest in employment if there

is no specified term.

Reiter, 627 P.2d at 849. Reiter had argued that his longevity of

service, by implication, created a property interest. The Court

rejected that argument, and the Court's pronouncements provided a

firm basis for the conclusion that state employees with no

specified term of employment likewise had no property interest in

their employment:

Even though appellant may have had an implied contract

with the county by virtue of his longevity of service, it

would be a contradiction in terms to say that he had an

"implied specified" period of employment. A specified

term is one which the parties expressed, and there was no

expression here concerning the length of employment.

Section 39-2-503, MCA, operates to fill the gap left by

the parties by defining the relationship as an "at-will"

employment.

Reiter, 627 P.2d at 849. The Court did not answer the question of

whether an administrative regulation containing a "just cause"

termination provision creates a "specified period" of employment

and thus a property interest in that employment.

12

The underlying administrative regulation which this Court

considered in conjunction with Laudermill as giving rise to a

property interest in Boreen I, was first discussed in Nye v.

Department of Livestock (1982), 196 Mont. 222, 639 P.2d 498. The

Court initially determined that Nye had completed her probationary

period of state employment and hence "had permanent status" in her

public employment, and then held that there was no showing of "just

cause" for removing her from her position. EYS, 639 P.2d at 502.

In considering the question of whether Nye was entitled to

judicial review of the decision following her grievance, the Court

explained that the answer depended on whether her grievance was a

contested case under the Montana Administrative Procedure Act

(MAPA). &'e, 639 P.2d at 500-501.

The Court noted that whether a person was entitled to a

contested case hearing depended not only on statutory rights

providing for due process but also on whether a hearing is required

as a matter of constitutional law. WC, 639 P.2d at 501. Nye had

not cited any statutory or constitutional authority which indicated

that a person in Nye's position was "required by law" to be given

an opportunity for hearing prior to a determination of her rights

or privileges. NYe, 639 P.2d at 501. The Court indicated that its

own research had likewise not revealed any such authority.

Therefore, the Court concluded that Nye's grievance procedure did

not qualify as a contested case under MAPA and consequently, Nye

was not entitled to judicial review. EYe, 639 P.2d at 501.

Although the Court held that Nye had "permanent status" in her

13

employment, it did not find that such "permanent status" was a

"specified term” that would defeat the "at will" nature of Nye's

employment, giving her a constitutional right to a hearing.

The Court next considered whether Nye could bring a claim of

wrongful discharge. Agreeing with the district court that Nye's

employment was "at will" pursuant to § 39-z-503, MCA, this Court

nevertheless found that Nye was not precluded from bringing a

wrongful discharge claim:

The District Court's order of dismissal [of the wrongful

discharge claim] appears to rest upon the fact that Nye's

employment was I' at will." Section 39-2-503, MCA.

However, the tort of wrongful discharge may apply to an

at will employment situation.

EYC, 639 P.Zd at 501-502.

The Court recognized that the administrative "just cause"

rule, applicable to Nye, "may be the source of a public policy [the

violation of] which would support a claim of wrongful discharge."

@Ye, 639 P.2d at 502. Reciting the due process protections

contained in the policy, the Court concluded that the Department of

Livestock failed to apply these regulations to Nye and, thereby,

violated public policy. UYe, 639 P.Zd at 502. The Court then

remanded the case~on this issue.

Citing m, a later decision of this Court stated that a

wrongful discharge claim based on a public policy violation is one

of several "exceptions11 to the right of "at will" employers to

discharge employees. Prout v. Sears, Roebuck & Co. (1989), 236

Mont. 152. 157, 772 P.2d 288, 291. As noted by Justice Morrison in

14

a subsequent concurring opinion, such a court-created exception

does not abrogate the statutory employment "at will" rule:

The breach of the obligation owed by the employer may

give rise to a tort action on the part of the employee,

but does not convert "at will" employment to employment

for a specific term.

Dare v. Montana Petroleum Mktg. Co. (1984), 212 Mont. 274, 286, 687

P.2d 1015, 1022 (Morrison, J., specially concurring).

When u is read in conjunction with Reiter and subsequent

Montana decisions analyzing the "at will" statute, it is apparent

that a Montana employee subject to a "just cause" provision did not

have a clearly established property interest in her employment

subject to the protections of the Due Process Clause. Reiter held

that an implied employment contract did not create a "specified

term" of employment nor did 'Ipermanent status" in the u case

create a "specified term" that would render the "at will" statute

inapplicable to an employee. Although the Court in w held that

violation of the administrative "just cause" provision may be the

basis for a claim of wrongful discharge it did not hold that "just

cause" may be the basis for a protected property interest.

Subsequent case law emphasized that a wrongful discharge claim did

not convert an "at will" employment to a "specified term.”

Although we said that Reiter and a subsequent Montana federal

district court decision suggested our decision in Boreen I, this

"suggestion" cannot fairly be said to have clearly established the

law. "Government officials are not charged with predicting

the future course of constitutional law." Ostlund, 825 F.2d at

1374.

15

While the pre-1990 case law did not hold specifically that an

administrative "just cause" provision did not create a property

interest in employment, neither was it clear that the "just cause"

provision affirmatively established a property interest.

Certainly, the "contours" of an employee's right to a property

interest in employment were not sufficiently clear such that a

reasonable official would understand that he was violating that

right. See Anderson, 483 U.S. at 640. We therefore hold that at

the time Boreen was constructively discharged in 1990, it was not

clearly established that she had a protected property interest in

her employment.

Although Boreen alleges that it was improper for the District

Court to consider post-1990 decisions in its determination of

whether her property interest in employment was clearly established

in 1990, these decisions are relevant indicators of the state of

the law before Boreen I. Generally courts do not look to post-

incident decisions in determining whether the prior law had been

clearly established, but such cases may serve as persuasive

authority. Baker, 887 F.2d at 187.

The District Court noted that in 1991, this Court ruled that

a governmental (school district) employee did not have a property

interest in his employment. Medicine Horse v. Big Horn Cty. Sch.

Dist. (1991), 251 Mont. 65, 823 P.2.d 230. In 1994, the Ninth

Circuit Court of Appeals, in Hollister v. Forsythe (9th Cir. 1994),

22 F.3d 950, construed Montana law and specifically the Reiter and

Medicine Horse decisions, and ruled that a county employee subject

16

to "just cause" requirements for termination did not have a

property interest in employment. This Court acknowledged the

Hollister decision in Boreen I, stating "we simply do not agree"

with the decision. Boreen I, 884 P.2d at 769. Our disagreement

with the result in Hollister illustrates the lack of clarity on the

issue of whether a Montana employee subject to a "just cause"

provision had a protected property interest in her job before

Boreen I.

A determination of whether the law was clearly established

requires an analysis of the state of the law as of the date of the

incident in question as opposed to a review of legal developments

after the incident. Nonetheless, the District Court did not err in

noting that numerous judicial decisions after 1990 illustrate the

fact that the question of whether an "at will" employee had a

property right in employment was not "clearly established" before

our 1994 decision in Boreen I. Moreover, the Court's conclusion is

not inconsistent with our analysis of the pre-1990 authority.

Boreen also argues that Rule 2.21.6509, ARM, the

administrative rule which requires just cause and due process for

disciplinary action, clearly established the right upon which

Boreen bases her 5 1983 claim. In other words, Boreen contends

that the administrative rule is the source of her procedural due

process right, and that the rule created clearly established

constitutional rights as of 1990, thereby defeating Youngblood's

qualified immunity claim. Boreen's argument is incorrect.

17

A similar argument was made by a discharged employee in Price

v. Brittain (5th Cir. 1989), 874 F.Zd 252. Price alleged that he

was deprived of his property interest in employment without

procedural due process. He claimed that his employee handbook,

which required notice and an opportunity to respond prior to any

discharge, "made the contours of his procedural due process rights

clear to defendants." Price

-I 874 F.2d at 261. Citing the Supreme

Court's decision in Davis, the appeals court rejected the argument:

[Elmployee handbooks cannot alone clarify established

constitutional rights that are not themselves clear in

light of preexisting law.

Price, 874 F.2d at 262. The court found that the defendant was

entitled to qualified immunity.

The Fifth Circuit Court of Appeals' holding as to the employee

handbook underscores the problem with Boreen's argument on the

issue of whether the "just cause" provision by itself clearly

established a property right in employment as of 1990.

As of 1986, this Court had held in Bick v. State, Dept. of

Justice (1986), 224 Mont. 455, 457, 730 P.2d 418, 420, that "it is

axiomatic in Montana law that a statute cannot be changed by

administrative regulation." (Citation omitted.) Accordingly, the

"just cause" provision in Rule 2.21.6509, ARM, did not by itself,

as of 1990, clearly establish a property right in the face of the

"at will" employment statute, § 39-2-503, MCA.

Our decision in Boreen I was based not on the administrative

"just cause" provision alone, but on the administrative "just

18

cause" provision read in conjunction with the United States Supreme

Court decision in Loudermill and our decision in u.

As of April of 1990, § 39-2-503, MCA, provided that an

employment "having no specified term" may be terminated at the will

of either party. At that time, this Court had not held that an

administrative rule containing a "just cause" termination provision

constituted a "specified term" of employment which would render the

"at will" statute inapplicable to an employee, thereby creating a

property interest in his or her employment.

As the dissent points out, the "at will" employment doctrine

embodied in § 39-z-503, MCA, is "antithetical" to the "just cause"

requirement of Rule 2.21.6509, ARM. However, contrary to the

dissent's conclusion, the fact that the administrative rule is

incompatible with the statute, only goes to prove that the law was

confusing (i.e., not clearly established) until our decision in

Boreen I.

Because we hold that Boreen's property interest in her

employment was not clearly established in April of 1990, we need

not reach the second prong of the Harlow test for granting

qualified immunity. The second prong asks whether a reasonable

official under the defendant's circumstances would have known that

his conduct violated the law. Because the law was not clearly

established a reasonable official could not have known of it and

the second prong need not be addressed. See Lucero v. Hart (9th

Cir. 1990), 915 F.2d 1367, 1371 (citing Harlow for the proposition

that the unsettled nature of the law, on the issue of entitlement

19

to a job, necessarily means that the government officials could not

have violated a clearly established statutory or constitutional

right of which a reasonable person would have known).

we hold, therefore, that Boreen's property interest in her

employment was not clearly established when she was constructively

discharged in 1990 and, consequently, Youngblood is immune from

suit. The District Court's grant of Youngblood's motion to dismiss

on the basis of qualified immunity was therefore correct. Because

we affirm the District Court's dismissal on the basis of qualified

immunity we do not reach the issues of res judicata and collateral

estoppel. Affirmed.

We concur: /Y

Justices

20

21

Justice James C. Nelson dissenting.

I respectfully dissent. Except as herein set forth, I do not

disagree with the majority's explication of the general principles

of law pertaining to qualified immunity and to an employee's

property interest in her employment. I do, however, disagree with

its application of these principles to the facts here. In that

regard, I also believe that the courts--this Court included--have

unnecessarily and improperly confused what is, in essence, a simple

and straightforward legal concept that has been clearly established

in the law for more than a decade: An employee whose employment is

subject to termination only for "just cause" or "good cause"

because of a contract, statute, rule or policy has a property

interest in her employment and may not be deprived of that interest

without due process of law; such an employee is not an "at will"

employee.

First, as regards this case, the majority correctly

acknowledges that, in the application of the doctrine of qualified

immunity, whether the law at issue was "clearly established"

focuses (in the words of the opinion) on the "legal authorities

extant at the time the defendant acted." What, then, was the law

"extant" at the time Boreen was constructively terminated on April

13, 1990? Obviously, in answering this question we need look no

further than to federal law and Montana law as of that date.

As to federal law, the U.S. Supreme Court's decision in

Cleveland Board of Education v. Loudermill (1985), 470 U.S. 532,

105 S.Ct. 1487, 84 L.Ed.2d 494, had been the law of the land for

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five years prior to Boreen's discharge. We discussed Loudermill at

length in Boreen v. Christensen (19941, 267 Mont. 405, 884 P.2d

761, (Boreen I), and there is no need to repeat that analysis.

Important to our discussion here, however, and again as the

majority acknowledges, the Court concluded in Loudermill that the

"just cause" provision in the Ohio statute at issue there created

a property interest in Loudermill's public employment. The

majority cites no federal case decided in the years between

Loudermill and Boreen's termination that departed from that simple

and straightforward proposition.

Accordingly, we must next look to the State of Montana law as

of April 13, 1990. For some twelve years prior to Boreen's

discharge, her public employment was subject to and was protected

by State administrative regulations which (a) premised all

disciplinary action, including discharge, on there being "just

cause" and (b) required "due process" in the administration of such

discipline or discharge. Again, these administrative regulations

are discussed in and appended to our decision in Boreen I.

Thus, as of April 13, 1990, a public employer in Montana which

had adopted the administrative regulations aforementioned, knew or

should have known that the public employee could not be terminated

absent there being just cause, as defined in 2.21.6507(6), ARM, and

that the employee was entitled to due process prior to termination

all as set forth and defined in 2.21.6506, 6507 and 6509, ARM.

Moreover on that date, given Loudermill, that same public employer

knew or should have known that if state law conditions termination

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of public employment on "just cause"--as was the case here--then

that law creates in the employee a property interest in her

employment.

In short, on April 13, 1990, the law was clearly established

that an employee whose employment is subject to termination only

for "just cause" under state law had a property interest in her

employment and could not be deprived of that interest without due

process of law. That simple and straightforward legal principle

derived directly from the unambiguous requirements of Montana law

and federal law "extant" on that date. On April 13, 1990,

Youngblood needed to look no further than the Administrative Rules

of Montana and Loudermill to arrive at that conclusion.

Notwithstanding, Respondents here go to great lengths arguing

that the above settled principle of law was not clearly established

in April 1990--and in fact was not clearly established until our

decision in Boreen I. The majority agrees. However, viewed from

an objective standard, as the majority concedes it must, such a

position is insupportable.

First, as early as 1985, the principle of law articulated

above could not have been more clear to Montana public officials.

Through Attorney General Mike Greely, Montana participated in

Loudermill as amicus curiae on behalf of the Cleveland Board of

Education. See, Loudermill, 470 U.S. at 534. The State took the

position that state employees should not have a property interest

in their employment simply because they are protected by an

administrative just cause requirement. Obviously, Loudermill can

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hardly be read as supportive of that position. Having advanced

that argument, however, and in light of the Court's decision in

Loudermill, the handwriting was clearly on the wall five years

before Boreen was constructively discharged. She was protected by

a just cause/due process provision in Montana law; she had a

property interest in her employment.

Second, while not dealing with the constitutional property

interest issue addressed in Loudermill, this Court recognized in

Nye v. Department of Livestock (1982), 196 Mont. 222, 639 P.2d 498,

that the same just cause/due process regulations which governed

Boreen's employment were a source of public policy that would

support a claim of wrongful discharge and that the State

(Department of Livestock) had violated public policy by failing to

apply these regulations. Again, three years before Loudermill,

public employers in Montana were on notice that just cause/due

process requirements in administrative regulations would implicate

an employee's right to notice and an opportunity to be heard and to

the retention of her job if those regulations were not followed.

Under these circumstances and given the actual state of the

law as of April 13, 1990, any claim that the principle of law

establishing Boreen's property interest in her employment was not

clearly established must necessarily find justification in some

other basis than a simple reading of the provisions of Montana's

public policy expressed in the Administrative Rules of Montana

cited above and in what the majority concedes is the "seminal [U.S.

Supreme Court] case" on this subject.

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Enter the "at will" employment doctrine. As of April 13,

1990, one case, Reiter v. Yellowstone Cty. (1981), 192 Mont. 194,

627 P.2d 845, had discussed Montana's at will employment statute,

s 39-2-503, in conjunction with an employee's claim of a property

interest in his employment. We held that, "[tlhe Montana statute

create[d] no property interest in employment if there [was1 no

specified term" and therefore, Reiter had no constitutionally

protected property interest in his employment. Reiter, 627 P.2d at

849-50. Importantly, as we pointed out in Boreen I:

Reiter did not raise, nor did we address, the effect on

the "at will" nature of the plaintiff's employment of the

parties conditioning termination on a demonstration of

"just cause" under an administrative regulation adopted

by the government. In fact, we specifically pointed out

that Reiter's employment "was not covered by any written

contract or collective bargaining agreement or

ordinance."

Boreen I, 884 P.2d at 765 (citing Reiter, 621 P.2d at 847).

Accordingly, whatever Reiter stands for, it can hardly be

argued that our decision in that case made unclear the unambiguous

requirements of Montana law as expressed in the above cited

administrative regulations and in the subsequent Loudermill

decision, when Reiter did not even address the Loudermill issue.

Correctly, we rejected out of hand any application of Reiter (and

its progeny) in Boreen I and we should, likewise, do so here.

Montana's I' at will" employment statute and the cases

interpreting that statute simply have no bearing where the employee

is protected by a just cause/due process legal requirement. In

fact, the whole concept of "at will" employment is antithetical to

the legal mandate that an employee may not be discharged except for

26

just cause or good cause. "At will" employment, as we have defined

it, is the ability of an employer to dismiss his employee "for a

good reason, bad reason or for no reason at all." Scott v. Eagle

Watch Investments, Inc. (1991), 251 Mont. 191, 195, 828 P.2d 1346,

1349. That definition simply cannot be reconciled with a legal

requirement that the employer can only discharge his employee for

just cause or good cause--i.e., as the corollary, that he may not

terminate his employee for a bad reason or no reason at all. The

concepts of "at will" employment and "just cause" termination are

purely and simply incompatible with each other, and our use here of

"at will" employment cases to justify our decision not only flies

in the face of our rejection of the applicability of those cases in

Boreen I, but also lends further confusion to what was, at least in

April of 1990, a clearly established principle of law. The issue

of "at will" employment was a red herring in Boreen I; it is in

this case as well. Boreen never was an "at will" employee; she was

entitled to retain her job until her employer established just

cause for her termination and provided her with due process before

discharging her. Boreen I, 884 P.2d at 766-67.

That brings me to my last point. The law in April 1990 was

clearly established. The majority’s reliance on post-1990 cases to

explain what law was extant at the time Boreen was constructively

discharged is plainly improper under the doctrine of qualified

immunity articulated in Harlow v. Fitzgerald (1982), 457 U.S. 800,

102 S.Ct. 2727, 73 L.Ed.2d 396. The fact that since 1990 courts

have engrafted onto the rule in Loudermill legal concepts--like "at

27

will" employment--that plainly have no bearing on the rule

articulated in that case speaks not to any confusion in the law in

1990, but rather to judicial attempts to avoid what Loudermill--and

Montana's administrative regulations--clearly require.

Much is made by the'Respondents and by the majority of our

statements in Boreen I that our decision was one of first

impression. True enough. Boreen I was just such a case; this

Court had not, prior to that case, directly addressed the

Loudermill issue. It does not, however, follow from a case being

one of first impression before a particular court, that the legal

principle on which the case is decided has not been already clearly

established in the black-letter law or in some other controlling

body of case law. In fact, as pointed out above, that was

precisely the situation in Boreen I. Montana's administrative

regulations and Loudermill dictated the rule in Boreen I.

Moreover, by the time we decided Boreen I in 1994, the courts had

had four years to complicate and confuse what was clear in 1990.

Notwithstanding, even with the additional four years of state and

federal case law, this Court had no apparent difficulty in

concluding, on the basis of Montana's administrative regulations

and Louder-mill, that Boreen had a property interest in her public

employment. If that simple principle of law was clear to this

Court in 1994, it was, likewise, certainly clearly established in

April 1990. We did not make any new law in 1994; we simply set

forth what clearly had been the law since 1985.

Our decision here cannot be justified on the basis of the

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principles of law cited by the majority. The law was clearly

established on April 13, 1990: because Boreen's employment was

protected by state regulations prohibiting her from being

discharged absent her employer demonstrating just cause, she had a

property interest in her employment and could not be deprived of

that property interest without due process of law. Youngblood is

not entitled to qualified immunity from her § 1983 claims.

Katharine Boreen won the battle in Boreen I; unfortunately,

she has lost the war in Boreen II. I dissent.

Justice Terry N. Trieweiler and

foregoing dissent.

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/ Justices

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