Tibbetts v. Kulongoski

Procedural entryThis page is a short order in Tibbetts v. Kulongoski. Read the opinion of the Court — 567 F.3d 529
Court of Appeals for the Ninth Circuit·Decided May 29, 2009·No. 07-36067·Published

Opinion

FOR PUBLICATION UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

CECIL TIBBETTS and DAVID  THURBER, Plaintiffs-Appellees, v. THEODORE KULONGOSKI, individually and in his official No. 07-36067 capacity, Defendant-Appellant,  D.C. No. CV-06-00503-ALH and OPINION STATE ACCIDENT INSURANCE FUND CORP., an Oregon corporation; BRENDA ROCKLIN, individually and in her official capacity, Defendants.  Appeal from the United States District Court for the District of Oregon Ancer L. Haggerty, District Judge, Presiding

Argued and Submitted March 4, 2009—Portland, Oregon

Filed May 29, 2009

Before: Susan P. Graber, Raymond C. Fisher and Milan D. Smith, Jr., Circuit Judges.

Opinion by Judge Milan D. Smith, Jr.

6357 6360 TIBBETTS v. KULONGOSKI

COUNSEL

Hardy Myers, Attorney General, Mary H. Williams, Solicitor General, and Erin C. Lagesen, Assistant Attorney General, Salem, Oregon, for appellant Theodore Kulongoski. TIBBETTS v. KULONGOSKI 6361 Gregory A. Hartman and Aruna H. Masih, Bennett, Hartman, Morris & Kaplan, LLP, Portland, Oregon, for appellees Cecil Tibbetts and David Thurber.

OPINION

MILAN D. SMITH, JR., Circuit Judge:

Defendant-Appellant Oregon Governor Theodore Kulon- goski appeals from the district court’s order denying his motion for summary judgment on the ground of qualified immunity. Plaintiffs-Appellees, who are former employees of the State Accident Insurance Fund, brought this action pursu- ant to 42 U.S.C. § 1983, alleging, among other claims, that Governor Kulongoski violated their Fourteenth Amendment due process rights by making stigmatizing statements about them in two press releases without providing them name- clearing hearings.

Because the relevant parameters of a Fourteenth Amend- ment right to a name-clearing hearing were not clear at the time of the allegedly stigmatizing statements, we conclude that a reasonable official in the Governor’s position would not have been aware of his alleged obligation to provide Plaintiffs name-clearing hearings. We therefore reverse the district court and hold that Governor Kulongoski is entitled to quali- fied immunity in this suit.

Factual and Procedural Background

Plaintiffs Cecil Tibbetts and David Thurber (together, Plaintiffs) are former managerial employees of Defendant State Accident Insurance Fund Corporation (SAIF). SAIF is a part of the executive branch of the State of Oregon but is organized to function as a public corporation. The Oregon legislature created SAIF “for the purpose of transacting work- 6362 TIBBETTS v. KULONGOSKI ers’ compensation insurance and reinsurance business” with Oregon employers. Or. Rev. Stat. § 656.752(1). SAIF is gov- erned by a five-member Board of Directors (Board) whose members are appointed by the Governor of Oregon, Or. Rev. Stat. § 656.752(1) and (3), and who serve at the Governor’s pleasure, id. The Board appoints a manager to run SAIF, who “serves at the pleasure of the board of directors.” Id. Governor Kulongoski was Governor of Oregon at all times material to this dispute.

In the time period leading up to the events that are the sub- ject of this appeal, SAIF was the subject of extensive media attention because of alleged scandals regarding the practices of its then-President, Katherine Keene. Charges of ethics vio- lations had been filed against SAIF for its alleged failure to report its lobbying expenditures accurately, and a lawsuit had been filed alleging a willful failure to produce documents in violation of public records laws. See Oregonians for Sound Econ. Policy, Inc. v. SAIF, 182 P.3d 895 (Or. Ct. App. 2008) (hereinafter, OSEP litigation). In December 2003, Keene resigned from her position as SAIF’s President/Manager.

After Keene’s resignation, Plaintiff Cecil Tibbetts, who had served as Vice President for Human Resources at SAIF since November 1, 1995, was appointed to act as SAIF’s Interim President/Manager by SAIF’s Board. In April 2004, the SAIF Board responded to Governor Kulongoski’s public demand for a report regarding some of SAIF’s controversial policies and practices. In a letter to Governor Kulongoski, the Board questioned, among other things, SAIF’s relationship with Associated Oregon Industries, a non-profit business advocacy group, with which Plaintiff David Thurber, Vice President for Policy Services at SAIF, was closely associated. The letter noted that the relationship “has been particularly controversial to some, and it therefore merits special attention.” Some Ore- gon senators called for an “independent review” of spending, and the media reported that the Oregon Government Stan- dards and Practices Commission had voted to initiate an TIBBETTS v. KULONGOSKI 6363 investigation into whether SAIF had under-reported the money it spent to lobby the legislature.

In June 2004, Mark Cohen, a former SAIF employee, filed an affidavit in the ongoing OSEP litigation which, among other things, accused Tibbetts of twice having ordered the destruction of certain records to avoid producing them in the OSEP litigation. Cohen further alleged that Tibbetts was con- cealing documents in his office and at his home to avoid dis- closing them. The contents of the affidavit were covered by the media. SAIF officials called the allegations “erroneous, misleading and untrue” and described Cohen as a “disgruntled former employee who destroyed the documents without their knowledge.” Tibbetts told a legislative committee that “[he] never told anyone to destroy documents that should have been retained.” Governor Kulongoski thereafter issued a prepared statement to the media, reading:

Unauthorized destruction of public records is against the law and cannot be tolerated by any public offi- cial. These allegations are very serious, and I believe they require immediate investigation. I am asking the attorney general to ensure there is a thorough investi- gation.

At the same time, Governor Kulongoski’s spokeswoman stated to the press that “the governor is not taking a position on the allegations.”

On August 12, 2004, Governor Kulongoski issued a press release announcing his intention to appoint Brenda Rocklin to replace Tibbetts as Interim President/Manager of SAIF. Pre- ceding the issuance of that press release, Governor Kulon- goski had explained to Board members that he thought Rocklin was an appropriate replacement because of “her cred- ibility as a person that could fix things.” He further told Board members that he thought that, given its problems, SAIF required some housecleaning and that Rocklin was the person 6364 TIBBETTS v. KULONGOSKI who could make that happen. During this conversation, some Board members reminded Governor Kulongoski that they alone had the statutory authority to appoint the President of SAIF. Nevertheless, after discussing the replacement, the Board voted unanimously on August 12, 2004, to appoint Rocklin as interim President and CEO.

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