Margaret Rookard v. Health and Hospitals Corporation

710 F.2d 41, 115 L.R.R.M. (BNA) 4089, 1983 U.S. App. LEXIS 26888

• Court: Court of Appeals for the Second Circuit
• Decided: June 9, 1983
• Docket: 762, Docket 82-7739
• Status: Published

Opinions

LUMBARD, Circuit Judge:

Margaret Rookard, formerly the Director of Nursing at Harlem Hospital, appeals from the June 21, 1982 decision of Judge Gagliardi of the Southern District of New York, dismissing her civil rights action against the New York City Health and Hospitals Corporation (HHC), the municipal corporation which operates New York City’s municipal hospitals. Rookard claims that HHC, in violation of her First Amendment right to free speech, demoted and eventually fired her because she disclosed illegal and wasteful practices at Harlem Hospital. Judge Gagliardi dismissed Rookard’s claim after a two-day bench trial, concluding that Rookard had not, as required by Monell v. Department of Social Servs., 436 U.S. 658, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978), proven that an official HHC policy caused her demotion or discharge. The central issue on appeal is the sufficiency of Rookard’s proof under Monell. We disagree with Judge Ga-gliardi. Rookard presented sufficient evidence that her injuries resulted from an HHC policy to chill the exercise of First Amendment rights by punishing those who dare complain of corruption and mismanagement. Accordingly, we reverse the judgment and remand for further proceedings.

Rookard’s evidence consisted of her own testimony and numerous exhibits.¹ At the close of Rookard’s case, HHC rested, and presented no evidence. The facts, as testified to by Rookard, and supported by her documentary evidence, may be summarized as follows.

In October, 1980 Rookard began employment, at a salary of $42,000, as Harlem Hospital’s Director of Nursing. In this position Rookard supervised a staff of approximately 1,000 persons, including 600 registered and practical nurses. Rookard was hired by Anthony Summers, the hospital’s Acting Executive Director. Shortly after Rookard began work Summers asked her to sign permits that would authorize unlicensed nurses employed by outside commercial agencies to work at Harlem Hospital. Rookard believed that such permits could lawfully be issued only to nurses directly employed by the hospital, and she refused to sign. Summers resented Rookard’s decision and thereafter ostracized her. Rook-ard noted a number of other irregularities in the hospital’s nursing department. She found that many nurses abused the hospital’s “sign-in” procedures, and either failed to sign the register, or signed for hours they had not worked; that the hospital had not kept adequate records of its use of licensed agency nurses, and could not accurately evaluate bills submitted by agencies; that nurses who worked overlapping, consecutive shifts, one shift each for the hospital and an agency, frequently were paid by both employers for the time of overlap; that Harlem Hospital, for no apparent reason, hired most of its agency nurses through a single agency (Gotham Registry); that agency nurses hired to work in specialized areas often lacked proper credentials; and that some of the foreign nurses working at the hospital had not adequately documented their immigration status. Rookard reported all of these problems to Summers, who ignored her. She took steps to eliminate the problems, and to improve efficiency, and thereby earned the enmity of a number of her nurses. She began to receive anonymous, threatening phone calls and letters.

Illness kept Rookard out of her office from' February to May, 1981. During Rook-ard’s absence one of her subordinates, at Summers’ direction, signed the permits authorizing unlicensed agency nurses to work at the hospital. Rookard, upon returning to work, refused to use the permits. She returned the permits to the State Education Department and advised the Department that they had been invalidly issued. Summers resigned his post as Harlem Hospital’s Acting Executive Director in May, 1981, and was succeeded by Carl Carter as Executive Director. In July, 1981 Rookard told Carter that she planned to inform HHC’s Inspector General’s Office of the threats against her and of some of the problems she had found. Carter said “fine,” and did not object. Later that month Rookard met with HHC Inspector General Conrad Johns and told him of the threats, the dispute over unlicensed agency nurses, and the fact that nurses sometimes left work before completing their shifts. Johns, or his staff, promised an investigation.

In early August, Carter met Rookard at HHC headquarters in Manhattan and told Rookard of his decision to relieve her as Director of Nursing, and to transfer her to headquarters as an assistant to Grace Mat-sunaga, the Director of Nursing, Corporate Office. Carter told Rookard that she had been “battered enough” at Harlem Hospital, and that she would be reinstated as Director of Nursing when matters “cooled down,” but gave no other reason for the transfer. Rookard objected to the transfer, but began work in her new position, at her previous salary, late in August. Matsunaga assigned Rookard a windowless cloak room for an office and informed her of her displeasure that Rookard’s salary was higher than hers. Rookard worked on “special projects” for Matsunaga into early 1982.

On January 28, 1982 HHC’s Inspector General’s Office reported on the investigation of Harlem Hospital it had conducted following Rookard’s transfer. The Inspector General’s report stated that Gotham Registry had overcharged Harlem Hospital $518,686.18 between September, 1977 and May, 1981. Harlem Hospital, the report found, had repeatedly paid Gotham for full working shifts when Gotham’s nurses actually worked only part shifts. Although Rookard had, by January, 1981, reduced the number of tours serviced by Gotham nurses by 43%, the hospital’s use of Gotham nurses returned to previous levels when, in March, 1981, illness kept Rookard away from work. The report also found that Summers’ plan to use unlicensed agency nurses “was clearly in violation of state rules and regulations.”

On March 9, 1982 Carlotta Brantley, HHC’s Vice President for Corporate Affairs, informed Rookard that Matsunaga no longer would tolerate an assistant earning more than she earned, that budget cuts necessitated personnel changes within HHC, and that she, Rookard, would have to find a new position. Brantley offered to employ Rookard as an entry-level nurse, an offer which Rookard indignantly refused. By letter dated March 19, 1982 Brantley gave Rookard notice of discharge, effective April 30, 1982.

Rookard retained counsel, who requested HHC’s General Counsel to stay the scheduled discharge. On April 28th the General Counsel informed Rookard’s attorney that a stay would not be granted. On April 29th Rookard filed suit in the Southern District for an injunction against discharge. Judge Gagliardi denied the injunction; Rookard was discharged; and Rookard’s claim against HHC for reinstatement as Director of Nursing and damages was tried on May 17th and 18th.²

Under Monell v. Department of Social Servs., 436 U.S. 658, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978), a plaintiff suing a municipal corporation, such as HHC, under 42 U.S.C. § 1983 must prove that the constitutional wrong complained of resulted from the corporation’s official policy, custom, ordinance, regulation, or decision. As a municipal corporation cannot be held liable under § 1983 on a respondeat superior theory, Monell, 436 U.S. at 691-94, 98 S.Ct. at 2036-37, proof that the corporation employed a tortfeasor will not, standing alone, establish liability. Monell thus required Rookard to show that an official HHC policy of punishing “whistle-blowers,” in violation of her First Amendment right to free speech, caused her transfer and discharge. The district judge ruled Rookard’s evidence insufficient to establish the existence of any relevant HHC policy, and so dismissed the case. .We disagree with the judge’s ruling and find, as a matter of law, that Rookard’s proof was sufficient.

A single unlawful discharge, if ordered by a person “whose edicts or acts may fairly be said to represent official policy,” Monell, 436 U.S. at 694, 98 S.Ct. at 2037, may support an action against the municipal corporation. The difficulty, of course, lies in identifying those officials whose actions, because they may fairly be treated as the municipality’s own actions, establish policy. Where an official has final authority over significant matters involving the exercise of discretion, the choices he makes represent government policy.³ See Bowen v. Watkins, 669 F.2d 979, 989 (5th Cir.1982). An official has final authority if his decisions, at the time they are made, for practical or legal reasons constitute the municipality’s final decisions. See Familias Uni-das v. Briscoe, 619 F.2d 391, 404 (5th Cir. 1980). An allegation of policy-making authority thus requires proof of the official’s scope of employment and his role within the municipal or corporate organization.⁴ An official’s title, though not dispositive of his authority to make policy, see Schneider v. City of Atlanta, 628 F.2d 915, 920 (5th Cir.1980), is relevant for the inferences fairly to be drawn therefrom.

Having evaluated Rookard’s evidence under the principles above, we conclude that Rookard sufficiently established both Carter’s and Brantley’s authority to make policy. Rookard proved that Carter held the post of Executive Director of Harlem Hospital; that Rookard herself, as Director of Nursing, held a high position and supervised approximately 1,000 employees; that Carter ordered her transfer; and that the transfer occurred. This evidence establishes that Carter held a top level position with HHC and had authority to order the transfer. Rookard similarly proved that Brantley held the post of Vice President for Corporate Affairs and had authority to order her discharge. Equally important, there was evidence that Carter’s and Brantley’s authority over personnel decisions was final. On August 7, 1981, several days after Carter transferred Rookard, HHC President Stanley Brezenoff received an anonymous telegram warning him that the “Establishment” wanted to “remove” Rookard because “she exposed frauds.” Brezenoff referred this telegram to Carter. In April, 1982, when Rookard’s counsel requested a stay of the scheduled discharge, HHC’s General Counsel declined to grant a stay or to reverse the transfer. The reluctance of HHC’s President and General Counsel to intervene, or even to inquire into Rookard’s claims, confirms that Carter and Brantley had final authority in personnel matters.⁵ Moreover, HHC’s counsel conceded at trial that HHC is “highly decentralized.” We think that this evidence, in the absence of rebuttal evidence from HHC, sufficiently established Carter’s and Brantley’s policy-making authority. We accordingly hold, on the present record, that if Carter transferred Rookard, and Brantley fired her, because she brought evidence of malfeasance and corruption to HHC’s Inspector General, they established HHC policy.

Of course, to prevail, Rookard must prove more than the existence of an official policy. Under Mt. Healthy City School Dist. Bd. of Educ. v. Doyle, 429 U.S. 274, 287, 97 S.Ct. 568, 576, 50 L.Ed.2d 471 (1977), she also must prove that her speech (1) was constitutionally protected and (2) was a “substantial factor” in the action taken against her. Because the district judge dismissed under Monell, he did not consider the sufficiency of Rookard’s evidence under Mt. Healthy.

The First Amendment protects a government employee from discharge for speech upon matters of public concern, Connick v. Myers, ___ U.S. ___, 103 S.Ct. 1684, 75 L.Ed.2d 708 (1983), unless, under all the circumstances, the employee’s interest in free comment is outweighed by the State’s interest in the efficiency of its public services. See Pickering v. Board of Educ., 391 U.S. 563, 568, 88 S.Ct. 1731, 1734, 20 L.Ed.2d 811 (1968). In striking the balance between these interests, a court should consider whether the speech impaired the employee’s ability to perform his duties, disrupted working relationships requiring personal loyalty and confidence, or otherwise impeded the regular operation of the employing agency. See Pickering, 391 U.S. at 569-70 & 572-73, 88 S.Ct. at 1735 & 1736-37. Tested under these principles, Rookard’s complaint to HHC’s Inspector General clearly is constitutionally protected. An allegation of corrupt and wasteful practices at a large municipal hospital, made to the city official empowered to investigate such charges, obviously involves a matter of public concern. The matters of which Rookard complained were her proper concern; as Director of Nursing, it was her duty to do as she did. There is no suggestion that Rookard’s speech impaired her ability to perform her job, or impeded the regular operation of Harlem Hospital. Rookard attempted to minimize the disruption of working relationships by giving Carter advance notice of her intention to speak to the Inspector General. That Rookard’s speech was made privately, rather than publicly, did not remove it from First Amendment protection. Givhan v. Western Line Consol. School Dist., 439 U.S. 410, 99 S.Ct. 693, 58 L.Ed.2d 619 (1979).

Rookard also has shown that her complaint was a substantial factor behind the transfer. Without having previously expressed discontent with Rookard’s work, Carter ordered the transfer shortly after Rookard spoke to the Inspector General. Carter gave no reason for the transfer except to remark that Rookard had been “battered enough.” The record contains no evidence that the transfer was for cause. In light of Rookard’s long and distinguished career as a nursing administrator, and her previous successful service as Director of Nursing at a different HHC hospital, her treatment can only be explained as retaliation.⁶

Brantley was responsible for Rookard’s discharge on April 30, 1982. As Vice President for Corporate Affairs she must have known of the Inspector General’s report resulting from Rookard’s transfer and Rookard’s earlier treatment by Carter. The conclusion is inescapable that Brantley’s shabby treatment of Rookard and the discharge were both intended to make it clear to HHC personnel that blowing the whistle would not be tolerated and would be met with swift retribution.

We thus conclude that Rookard met all the requirements of Monell and Mt. Healthy. The district judge should not have granted judgment to HHC, and a remand is necessary. We do not, of course, hold that Rookard has conclusively established a case against HHC. Upon remand, both parties will be free to present evidence regarding the points discussed above and the issues not reached because of the dismissal following the plaintiff’s case.⁷

Reversed and remanded for proceedings consistent with this opinion.

1 . Rookard also presented two witnesses who testified only to her professional qualifications.

2 . Rookard’s complaint named both HHC and the City of New York as defendants. All claims against the City of New York were dismissed by consent of the parties at the close of trial.

3 . The issue raised by Monell is not whether a particular official generally may be characterized as a policy-maker, but whether that official’s particular decision established a policy fairly attributable to the municipality. Thus municipal liabiility may be predicated upon the unconstitutional acts of a subordinate official who has been delegated final authority in limited areas. See generally, Schnapper, Civil Rights Litigation After Monell, 79 Colum.L.Rev. 213, 219-24 (1979).

4 . Mayors may be treated as policy-makers without proof of their specific powers and responsibilities. See Quinn v. Syracuse Model Neighborhood Corp., 613 F.2d 438, 448 (2d Cir. 1980). Lesser officials, however, cannot similarly be presumed to embody plenary municipal power.

5 . The President’s and General Counsel’s failure to intervene is relevant not as a ratification of the transfer and discharge, but as indirect evidence of the scope of Carter’s and Brantley’s authority. If Carter and Brantley had not had final authority, Rookard’s high position, combined with the Inspector General’s report finding merit in her allegations about Harlem Hospital, could reasonably have been expected to prompt an investigation of the claim of retaliatory discharge. This is not a case where a high official notified of a pending discharge claimed to be unlawful could reasonably decline to investigate because of the claim’s apparent lack of merit.

6 . The controversy that Rookard’s allegations created at Harlem Hospital may explain Carter’s decision to order the transfer. Apparently, many hospital employees and community members supported Rookard’s efforts at reform. As noted, on August 7, 1981 anonymous persons who signed themselves as “Concerned employees of Harlem Hospital,” sent HHC President Brezenoff a telegram stating that Rookard’s success in “expos[ing] frauds” had turned the “Establishment” against her. Six days later, on August 13, 1981, anonymous persons who signed themselves as “The Harlem Community and the Concerned Staff of Harlem Hospital Center,” sent Mayor Koch a telegram stating that Harlem Hospital was “in crisis” because Carter was “unqualified” and because Rookard, “a brave and honest woman,” had been removed from her job. The Mayor’s Office referred this second telegram to HHC Inspector General Johns. In late August, Carter told an investigator from the Inspector General’s Office that Rookard’s allegations were false and that she would retract them in a letter to the “Black Voice.” Carter thus was aware in late August, and presumably was aware before the transfer, of community support for Rookard.

7 . Of course, upon remand, HHC will be entitled to reopen its case and to present evidence. The course of proceedings at trial compels this result. After Rookard rested, HHC moved to dismiss under Monell The district judge clearly stated his belief that Rookard’s proof was insufficient under Monell, and did so in words that left no doubt that dismissal would follow. The district judge then asked HHC’s attorney if he rested his case, and the attorney replied that he did rest. HHC’s answer alleged that Rook-ard would have been fired without regard to her speech, and simple fairness requires that HHC be allowed to present evidence on that defense and on other relevant points.