California First Amendment Coalition

San Ramon Valley Unified School District (School District), William A. Streshly and James C. O'Connor appeal a judgment in favor of Vern Weber (hereafter Weber) awarding $313,600 in economic damages and $75,000 for mental and emotional distress. William Streshly also appeals the portion of the judgment awarding Weber $7,500 in punitive damages against him. Both parties have filed notices of appeal from a decision awarding attorneys' fees in the amount of $177,034.50.

In an original complaint filed July 31, 1990, and a first amended complaint filed nine months later, Weber alleged fifteen causes of action for legal and equitable relief based on the termination of his employment with the School District. The case was, however, submitted to the jury on only two causes of action as a result of orders of summary adjudication and voluntary dismissals. In response to two motions for summary adjudication, the trial court dismissed a series of causes of action based on theories of fraud, breach of contract, breach of implied warranty, specific performance, bad faith denial of contract, and punitive damages. At the close of evidence, Weber voluntarily dismissed remaining causes of action for negligent misrepresentation and fraud in the face of a motion for nonsuit. The case was submitted to the jury on two theories: wrongful termination under Education Code sections 45117 and 45308 and violation of civil rights under 42 United States Code section 1983.

The jury returned a special verdict finding the School District liable on both theories. Addressing the alleged violation of the Education Code, the jury answered "yes" to the question: "Was Plaintiff laid off for reasons other than lack of work or lack of funds?" And "no" to the question: "If your answer to Question 1 is 'Yes', would the School District nevertheless have laid off Plaintiff because of lack of work or lack of funds?" Since the School District never contended that Weber was laid off for cause or poor job

performance, the findings compelled the conclusion that he was terminated in violation of Education Code sections 45117 and 45308. With regard to the claimed violation of civil rights, the jury answered "yes" to the question: "Was the defendants' decision to lay off the plaintiff substantially motivated by plaintiff's statements on matters of public concern?" And "no" to the question: "Would the defendants have reached the decision to lay off the plaintiff even if he had not made statements on matters of public concern?"

The facts may be very briefly stated because the disposition of the appeal turns on a narrow issue: whether the First Amendment protects Weber's statement to the press published on October 24, 1989. As one of five senior managers of the School District, Weber was a classified employee under the Education Code working on independent contract. He had begun work for the School District in 1973 as business manager after working some time as an educational consultant. In 1984, his job description was changed to director of management services. His responsibilities included demographic planning, facilities planning, and liaison with the Office of Local Assistance, the agency of the State Department of Education providing funding for local school districts. In 1989, he enjoyed a salary of $75,000 plus benefits. By all accounts, Weber was an outstanding employee with a state-wide reputation in the fields of demographics and facilities planning.

In 1986, appellant William Streshly was appointed Superintendent of the School District. He soon began to form his own management team, prompting two senior managers to leave district positions. Weber's own contract expired in June 1989, although he would continue to enjoy job protection as a classified employee. By the time he faced the prospect of renegotiating his contract, Weber had fallen into conflict with Streshly on certain issues. Weber resisted Streshly's use of money from a fund derived from developer's fees for purposes which were not closely related to capital expenditures for new school facilities. In addition, late in 1988, Streshly inflated Weber's projection for student enrollment so as to produce the appearance of a balanced budget in the next school year. In two confidential memoranda written late in the year to School District management, Weber predicted that the inflated projection would lead to a substantial deficit for the next school year.

On April 10, 1989, James O'Connor assumed the duties of assistant superintendent--filling a vacancy for which Weber had applied. The superintendent, Streshly, advised him that he would be expected to reorganize the business functions of the School District, including Weber's position. On his second day on the job, O'Connor interviewed Weber concerning four areas of perceived weakness in his job performance. At trial, O'Connor acknowledged that he relied on Streshly for his information about these alleged shortcomings. In May, O'Connor talked to Weber about the option of applying for a newly created position offering a substantially lower salary. He told Weber that the District needed his skills in demographics and facilities planning but desired these services at a lower cost. About this time, O'Connor testified that he began talking to Weber about the possibility that Weber could continue to work for the School District on a part-time basis as a consultant. Other top officials testified that, as the expiration date of Weber's contract approached, they discussed in a "cabinet" meeting of top officials the desirability of eliminating Weber's position while retaining his invaluable expertise as a consultant.

For his part, Weber points out that he was on a list of management employees for the next year which the school board approved on June 20, 1989. He claims that the administration first asked him to resign on June 28, 1989, the day after he was interviewed by a local newspaper reporter. Late in the afternoon of that day, Weber was summoned into Streshly's office to answer questions of Kay Hwangbo, a reporter for the San Ramon Valley Times. Hwangbo was questioning Streshly about the inflation of student enrollment figures for the 1988-1989 school year. Although Streshly acknowledged he had deliberately inflated the staff estimate, Hwangbo wanted to pursue the point. Streshly testified it was his normal practice to transfer a reporter to staff members with specific expertise in the topic under discussion. Weber himself was frequently quoted in the press.

When Weber entered the room, he found Streshly talking to the reporter on a speaker phone. Streshly told Weber to "give her what she needed" and suggested that he could pick up the receiver for a one-on-one conversation. Weber talked to Hwangbo for about five minutes on the topic of the inflated student enrollment figures as Streshly and O'Connor stood in another part of the room. He did not know whether they overheard the conversation. Streshly never commented on the way Weber conducted the interview.

The next afternoon, O'Connor asked Weber to resign his position and take a consulting role with the School District. Weber replied that he "would be willing to discuss that" if he were offered "the right terms and conditions...." On June 30, 1989, Hwangbo's article appeared in the San Ramon Valley Times, portraying Weber as a whistle blower. The headline stated in bold letters "Streshly Cited for Deficit" and continued in lower type: "Facilities director says funds were inflated." The same day O'Connor visited Weber's office and demanded again that he resign. Since Streshly was then out of town, the two men scheduled a meeting for July 6, 1989, after his return.

On July 6, 1989, Weber meet for about one and one-half hours with Streshly, O'Connor, and Mike Halloran, the assistant superintendent for personnel. At the conclusion of the meeting, O'Connor briefly summarized on a hand-written note the agreed terms for Weber's resignation: (1) he would remain on the payroll until December 31, 1989, taking two months of accrued vacation in November and December; (2) effective January 1, 1990, he would be given a consulting contract calling for 1,000 hours of work at a rate of $50 per hour; (3) the School District would provide health and welfare benefits until age 70; and (4) the parties would agree on a joint statement regarding his resignation.

The School District attorney, Sandra Woliver, prepared a draft of the consulting agreement, but Weber strongly objected to a provision saying that "neither party may make any other public statement," apart from the joint statement regarding Weber's retirement from the district, and he insisted on a draft of the agreement that he had written himself without this provision. In September, Streshly and Weber signed an agreed public statement. On October 16, 1989, Streshly signed a formal consulting agreement, promising Weber two years of employment as a consultant on the agreed terms. Weber signed the agreement the next day.

Upon learning of his resignation, Hwangbo interviewed Weber for 20 to 30 minutes by telephone. She testified that he told her "that he was being forced to leave the School District," that he had been asked to sign a document prohibiting him from talking "about his leaving the School District or anything like that," that he was never told "why he was being let go," and that "he was concerned about what would happen with the facilities department ... [because] there was nobody in the School District that had his particular expertise in that area." An article sympathetic to Weber, containing the substance of the

interview, was published on October 24, 1989, under the headline "Weber says he was forced from district job." He was quoted in bold print as saying that he had "serious concerns for the welfare of the school district."

On November 1, 1989, Streshly wrote Weber a letter claiming that they had "not yet reached a final agreement regarding [his] separation from the district." Streshly stated, "Several issues which have surfaced, we must discuss them immediately." Among these issues was "[Weber's] recent unilateral statement to the press regarding separation from the district which directly contradicts [his] proposed joint statement." A few days later, Weber received another letter from Streshly stating that the School Board had eliminated his job for "lack of work and/or lack of funds." Retaining an attorney, Weber sought unsuccessfully to renegotiate the consulting agreement. Among other things, the School District objected that the provision regarding a joint statement was "no longer performable" because of his "unilateral public statement about his employment and retirement...." The School District eventually retained another consultant to do the work promised to him. At trial, O'Connor characterized Weber as "a victim" of the October 24, 1989, article.

In the orders granting summary adjudication, which are not challenged in this appeal, the trial court ruled that the consulting agreement signed by Streshly, not having been properly authorized, was therefore unenforceable under the Education Code and that the alleged misrepresentations leading to Weber's resignation were not actionable under Government Code sections 818.8 and 822.2. Nevertheless, the court admitted evidence of the October 24, 1989, article for its relevance to the cause of action for deprivation of civil rights which is premised on the theory that Weber was discharged as retaliation for his exercise of his First Amendment rights. Ruling on a motion in limine, the court found that the statement was constitutionally protected. In this appeal, the School District bases its attack on the judgment for damages solely on this constitutional ruling.

Weber brings his cause of action for deprivation of civil rights under 42 United States Code section 1983, invoking the concurrent jurisdiction of state courts in the enforcement of this federal statute. Subject to a qualified immunity which we do not reach here (Harlow v. Fitzgerald (1982) 457 U.S. 800, 818, 102 S.Ct. 2727, 2738, 73 L.Ed.2d 396), the statute creates a cause of action for damages against any state official "who, under color of any statute, ordinance, regulation, custom, or usage, of any State ... subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution...." The same constitutional standards apply in suits brought against state officials under section 1983 and in suits brought directly under the constitution against federal officials. (Butz v. Economou (1978) 438 U.S. 478, 504, 98 S.Ct. 2894, 2909-10, 57 L.Ed.2d 895.)

[1][2][3] Since the United States Supreme Court decision in Pickering v. Board of Education (1968) 391 U.S. 563, 88 S.Ct. 1731, 20 L.Ed.2d 811, it has been well established that a public employee's exercise of his " 'right to speak on issues of public importance' " may not furnish the basis for his dismissal from public employment. (Havekost v. U.S. Dept. of Navy (9th Cir.1991) 925 F.2d 316, 318; Burgess v. Pierce County (9th Cir.1990) 918 F.2d 104; Barnes v. Small (D.C.Cir.1988) 840 F.2d 972, 982.) The Pickering decision directs the courts to balance "the interests of the teacher, as a citizen, in commenting upon matters of public concern and the interest of the State, as an employer, in promoting the efficiency of the public services it performs through its employees." (Pickering v. Board of Education, supra, 391 U.S. 563, 568, 88 S.Ct. 1731, 1734-35, 20 L.Ed.2d 811.) But "the threshold question before applying the balancing test is whether the employee's challenged speech may be 'fairly characterized as constituting speech on a matter of public concern....' " (Chico Police Officers' Assn. v. City of Chico (1991) 232 Cal.App.3d 635, 643, 283 Cal.Rptr. 610; Rankin v. McPherson (1987) 483 U.S. 378, 384, 107 S.Ct. 2891, 2896-97, 97 L.Ed.2d 315.) This question of whether "an employee's speech involves a matter of public concern is a question of law" (Roth v. Veteran's Admin. of Government of U.S. (9th Cir.1988) 856 F.2d 1401, 1405) which may be reviewed de novo on appeal. (Allen v. Scribner (9th Cir.1987) 812 F.2d 426, 430, fn. 8.)

[4] "Because of the enormous variety of fact situations in which critical statements by teachers and other public employees may be thought by their superiors ... to furnish grounds for dismissal," the Pickering decision did not "attempt to lay down a general standard against which all such statements may be judged" but merely indicated "some of the general lines along which an analysis of the controlling interests should run." (Pickering v. Board of Education, supra, 391 U.S. at p. 569, 88 S.Ct. at p. 1735.) " 'Whether an employee's speech addresses a matter of public concern must be determined by the content, form, and context of a given statement, as revealed by the whole record.' " (Rankin v. McPherson, supra, 483 U.S. 378, 384-385, 107 S.Ct. 2891, 2897, 97 L.Ed.2d 315.) Pursuing this analysis, the Supreme Court in Connick v. Myers (1983) 461 U.S. 138, 103 S.Ct. 1684, 75 L.Ed.2d 708, distinguishes between speech relating to matters of public concern--the focus of the Pickering decision--and speech voicing grievances about internal office affairs. Only the former, it held, can give rise to a cause of action under section 1983.

The plaintiff in Connick, an assistant district attorney who was transferred to another division of the criminal court, distributed a questionnaire to other assistant district attorneys concerning, among other things, "office transfer policy, office morale, the need for a grievance committee, the level of confidence in supervisors, ..." (461 U.S. at p. 141, 103 S.Ct. at p. 1687.) This action resulted in her immediate dismissal from her job. The Supreme Court viewed the questions propounded in the questionnaire as "mere extensions of [her] dispute over her transfer to another section of the criminal court." (Id. at p. 148, 103 S.Ct. at p. 1690.) While this dispute was not "totally beyond the protection of the First Amendment," it did not present a constitutional issue that could be scrutinized by federal courts in action under section 1983. The court held "that when a public employee speaks not as a citizen upon matters of public concern, but instead as an employee upon matters only of personal interest, absent the most unusual circumstances, a federal court is not the appropriate forum in which to review the wisdom of a personnel decision taken by a public agency allegedly in reaction to the employee's behavior." (Id. at p. 147, 103 S.Ct. at p. 1690.)

The court sought to avoid an interpretation of section 1983 that would "constitutionalize" ordinary employee grievances, adding a federal cause of action to the remedies otherwise existing under state law. The issue is not whether the grievance was well founded; other provisions of law may provide a remedy if the employee's contractual or statutory rights were violated. The narrow issue presented by section 1983 is whether the employee's discharge is barred by the First and Fourteenth Amendments. The constitutional standard, protected by section 1983, bars discharge only when the employer retaliates against the exercise of speech on "public issues," which occupies " ' "the highest rung of the hierarchy of First Amendment values" ' and is entitled to special protection." (Id. at p. 145, 103 S.Ct. at p. 1689.) In contrast, "[w]hen employee expression cannot be fairly considered as relating to any matter of political, social or other concern to the community, government officials should enjoy wide latitude in managing their offices, without intrusive oversight by the judiciary in the name of the First Amendment." (Id. at p. 146, 103 S.Ct. at p. 1690.)

[5] While ruling that the October 24, 1989, statement was constitutionally protected, the trial court commented that it presented a "borderline situation." We agree that the issue is close, but conclude that the statement does not fall into the category of statements protected by section 1983. Weber's statements concerning the circumstances of his departure from the school district clearly relate to an individual employee grievance, i.e., that he was forced out of the position without an explanation and asked to sign a "gag" document preventing public comment. The more difficult question relates to his expressed concern for the welfare of the school district. On its face, this statement might seem to involve a matter of public concern. But in actual context, Weber's concern for the district welfare was a "mere extension" of his individual grievance. His concern was directed at the consequence of his discharge on the management of district affairs; the detriment to district welfare lay in the loss of his own expertise. The expressed concern did not go beyond the subject of his own individual grievance--the loss of his job--and therefore did not concern a matter of public concern as defined in the Connick decision. (See Allen v. Scribner, supra, 812 F.2d 426, 431; Murray v. Gardner (D.C.Cir.1984) 741 F.2d 434, 438; McKinley v. City of Eloy (9th Cir.1983) 705 F.2d 1110, 1114; Chico Police Officers' Assn. v. City of Chico, supra, 232 Cal.App.3d 635, 644, 283 Cal.Rptr. 610.)

[6] We now address the perplexing question of the implications of the error for disposition of the case on appeal. Under California Constitution, article VI, section 13, the test of prejudicial error "may be stated as follows: That a 'miscarriage of justice' should be declared only when the court, 'after an examination of the entire cause, including the evidence,' is of the 'opinion' that it is reasonably probable that a result more favorable to the appealing party would have been reached in the absence of the error." (People v. Watson (1956) 46 Cal.2d 818, 836, 299 P.2d 243.)

[7] Under this standard, we do not see any reasonable probability that the error affected the jury's verdict on the action brought under the Education Code. The evidence had no logical connection with the issues presented by this legal theory, and Weber's case was very strong. An abundance of evidence tended to prove that the School District's elimination of Weber's position for "lack of work and/or funds" was merely a pretext adopted after the fact. Without question, he was an exceptionally effective and productive employee. After his discharge, the School District attempted to replace his contribution by delegating tasks to several employees and purchasing an expensive software program with less than complete success. James O'Connor acknowledged that it took the equivalent of two and one-half employee positions to perform the work that Weber was doing. Although the School District was under financial pressure, Weber's position was funded by a developer's fund, devoted to capital improvements, that was under less financial pressure than the general fund. A series of witnesses testified that lack of work or funds was in fact never mentioned in connection with Weber's discharge.

Similarly, we do not think it reasonably probable that the error affected the award of punitive damages against William Streshly. The claim for punitive damages was based on a lengthy course of conduct, beginning with Weber's opposition to Streshly's policies, that was relevant to both causes of action.

But apart from the October 24, 1989 article, the cause of action for deprivation of civil rights was based on rather tenuous inferences drawn from the succession of events. In testimony strongly disputed by other School District officials, Weber said that he was first given an ultimatum to resign the day after he gave the interview for this article. The testimony was strongly disputed by other School District officials, but it gained plausibility in light of the school district's response to the October 24, 1989 publication. Streshly explicitly raised the October 24, 1989 article as an obstacle to the proposed consulting contract and ultimately reneged on his promise to secure the contract. While the denial of this proposed arrangement was not actionable, it gave credibility to Weber's claim that Streshly had also sought his resignation because of his earlier disclosure to the press. Weber's counsel linked the two incidents in a compelling argument to the jury: "If October 24th costs Mr. Weber his consulting agreement, it's a little difficult to believe that the June 30th article wouldn't have cost him his job."

We find that, in the absence of the court's erroneous ruling extending constitutional protection to the October 24, 1989 statement, it is reasonably probable that the jury would have reached a result more favorable to the School District on the civil rights cause of action. This conclusion, however, does not affect the judgment for compensatory damages. The theory of deprivation of civil rights was one of two alternative theories of liability supporting the same elements of damages. The error only calls into question the validity of the award of attorney's fees.

The court awarded attorney's fees under the authority of 42 United States Code section 1988(b) which provides in relevant part: "In any action or proceeding to enforce a provision of sections ... 1983 ... of this title ... the court, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney's fee as part of the costs." The statute has no counterpart in the Education Code.

We are forced to conclude that Weber did not prevail in his action under 42 United States Code section 1983 because, to the extent that it was based on this theory of liability, the judgment is subject to reversal for prejudicial error. We recognize some possible unfairness in this result. Since the facts underlying the June 30, 1989 article (as opposed to that of October 24th) might have supported an inference allowing the case to go to the jury on the theory of deprivation of civil rights, it is possible that the jury could have upheld this theory of liability in any event. But we cannot remand the case for a new trial simply in order to determine Weber's right to attorney's fees on the first trial; and, as the case reaches us in this appeal, the action under 42 United States Code section 1983 has proved to be inconclusive.

The order awarding attorney's fees filed December 19, 1991, is reversed. In all other respects the judgment is affirmed. Costs to the School District.

STRANKMAN, P.J., and STEIN, J., concur.

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