Mutilation and Evisceration

In a recent case decided by the Oklahoma Supreme Court, the minority accused the majority of "mutilating" and "eviscerating" the standards normally applied to cases that reach the appellate court.

In Oklahoma Goodwill Industries, Inc., v. State ex rel. Oklahoma Employment Security Commission, the Goodwill industries argued that they did not have to pay certain unemployment taxes on consumers receiving rehabilitative or remunerative training while providing services at Tinker Air Force Base and in Oklahoma state offices pursuant to federal and state contracts mandating that individuals with severe handicaps or disabilities be utilized in performing contract services. The trial court agreed with Goodwill. The Oklahoma Employment Security Commission (OESC) appealed, arguing for the first time on appeal that Goodwill should be bound by the OESC's long-standing (30 year) interpretation of the relevant statute (which was, not unsurprisingly, that such employees were covered employees for purposes of unemployment taxes).

Justice Opala wrote the majority opinion, and was joined by Justices Hargrave, Edmonson, Kauger, Taylor and Reif. The majority threw the OESC a bone. The Court determined that the record was not sufficiently clear to allow for a decision on appeal, and (contrary to normal appellate standards) allowed the OESC -- the appellant -- to return to the trial court proceedings and re-argue its case. The Court directed OESC to present its argument on its "long-standing" practice and even suggested that its "long-standing construction" would not be "cast aside without cogent reason."

This outcome was met with a fierce dissent drafted by Justice Watt. Justice Watt argued that the majority opinion eviscerated and mutilated the normal rule that issues not presented to the trial court would not be considered on appeal. Justice Watt suggested that the Court was basically giving the OESC "overs" or a "second bite at the apple" by allowing the OESC to develop theories first asserted in the appellate court. In each of the cases supporting Justice Watt's view, the justice was certain to make it clear that Justice Opala was violating Opala's own holdings in other cases. Justice Watt would have decided the merits of the appeal, and would have held that Goodwill was not required to pay unemployment taxes for the consumers at issues in the case.

Some of the dissent's concerns may be legitimate, in light of the fact that the appeal had been pending in the Supreme Court since August of 2005. A review of the court's docket reveals that the Court took almost two years to decide the case after all the appellate briefing had been accomplished. (Here is an interesting article on the Court's current caseload.)

A petition for rehearing has been filed by Goodwill, so the majority opinion still remains subject revision, alteration or even reversal.

Sua Sponte Remittitur

"Sua sponte" is Latin for "of one's own accord." Well, in a recent order (available here), Judge Ronald White of the Eastern District of Oklahoma, made a sua sponte finding that a multi-million dollar judgment should be remitted by almost seven million dollars.

Apparently, in March of this year, a jury awarded the plaintiff a judgment in the amount of $21,141,975.00. Yes, you read that right. The trial apparently involved an alleged violation of the Packers and Stockyards Act. Following the verdict and judgment, the defendants (for a variety of reasons) filed a motion for a new trial. Judge White rejected all such arguments proffered by the defendants. The defendants apparently did not request that the the judgment be reduced (or remitted). Nevertheless, the Court, on its own motion, reduced the judgment to $14,511.935 -- an amount that was apparently stated in the jury instructions. If the plaintiffs do not consent to the remittiur, the Court stated it would order a new trial as to damages.

As an aside, the Court's comments were interesting regarding the parties' expert testimony. In particular, the Court stated:

This is not to say that the court found persuasive the testimony of either parties’ expert witness. Admittedly not itself an expert in economics, the court found Defendants’ expert’s testimony to have a number of research gaps and found the Plaintiffs’ expert’s testimony to be little more than gussied up wealth redistributive theory of probable Marxist origin. Nevertheless, because the court believed these flaws went more to the credibility of the experts’ testimony than to its admissibility, the jury was allowed to hear it.

The Fact of Removal

In Waters v. Continential Insurance Co., 07-282, Judge Kern denied Plaintiff's Motion for Remand citing evidence in the Notice of Removal that Plaintiff's claims aggregated to more than $75,000.

Plaintiff raised three theories of recovery arising from a bad faith medical claim: 1) Breach of Contract; 2) Tort; and 3) Punitive damages. In the Petition, Plaintiff cited the perfunctory statutory language for each claim, e.g. "damages in excess of $10,000." Defendant, in turn, attached an affidavit from a claims handler incorporating approximately $58,000 in medical bills claimed by Plaintiff in support of the Contract claim.

With the affidavit in hand, the Court proceeded to hold that Defendant had, "by a preponderance of evidence," established the jurisdictional threshold of $75,000. As Judge Kern pointed out, adding a $58,000 Contract claim, plus two additional claims valued at the statutory minimum aggregates in excess of $75,000 and, therefore, the Court retained diversity jurisdiction.

In a separate Order, Judge Eagan arrived at different conclusion. In Madlock v. Farmers Insurance Co., 07-703, the Court held the Defendant failed to support Removal with any "economic analysis" of Plaintiff's claims based upon the "underlying facts." See also Laughlin v. K-Mart Corp., 50 F.3d 871 (10th Cir. 1995).

Unlike the Waters defendant, Farmers simply concluded that invocation of punitive damages alone should suffice to establish the jurisdictional minimum. Of course, Judge Eagan pointed out that conclusory assertions that damages exceed $75,000 will not suffice, nor will reliance upon "the mere invocation of state law limits on punitive damages." Given the absence of any economic analysis of Plaintiff's claims based upon the "underlying facts," Judge Eagan granted the Motion for Remand.

Declaratory Actions Are Not Retalitory

In Shero v. City of Grove, --- F.3d --- (10th Cir. 2007), the Tenth Circuit held, as a matter of law, that "being properly named as a defendant in a declaratory judgment suit, however styled, would not chill a person of ordinary firmness from continuing to engage in constitutionally protected activity."

Shero's plight began when City denied his requests for "Council Packets" in advance of city council meetings. After Shero initially received the packets, the City changed course and began denying his requests. Shero, in turn, threatened suit under the Oklahoma Open Records Act, prompting City to file its own declaratory action against Shero, ostensibly seeking clarification regarding the applicability of the Act to the packets.

Shero eventually prevailed in state court. He then filed suit in federal court arguing, among other things, that City filed the declaratory action in retaliation for Shero exercising his First Amendment right to speak out against the City.

In a 2-1 decision, the Tenth Circuit disagreed. In doing so, the Court held that declaratory actions, even if filed with retaliatory animus, are not actionable under the First Amendment because “'[t]he nature and purpose of a declaratory judgment is to declare rights,' not to attack the opposing party." In support, the Tenth Circuit cited the fact that under Oklahoma's Declaratory Judgment Act, "the state court was prohibited from awarding damages against Mr. Shero."

The dissent argued that such a position might give cold comfort to citizens untrained in the procedural niceties of litigation. For example, the dissent pointed to the fact that litigation forced Shero to expend time and effort in defense of the action utilizing his own assets until awarded attorney's fees. This, argued the dissent, "may alone be enough to dissuade a person from continuing to engage in constitutionally protected speech."

Although litigation may be a "significant matter for private citizens," the Court ultimately concluded the specter of a declaratory action is not significant enough to rise above a de minimus injury and, as such, cannot be actionable under the First Amendment.

At least under federal law, the decision appears to give Oklahoma municipalities a green light to pursue declaratory actions against citizens without fear of violating the First Amendment.

A Right to A Hearing?

In a number of opinions issued in 2007, the Oklahoma Supreme Court has determined that trial courts have abused discretion in refusing to hold evidentiary hearings related to disputed fact issues, or where certain fundamental rights are at issue. For instance:

Oklahoma Oncology, 2007 OK 12, 160 P.3d 936 (finding that when motions and briefs raise disputed fact questions, and in the absence of a stipulation settling facts, Rule 4(c) requires a court to grant a party’s request for evidentiary hearing, noting that it "comports with notions of procedural due process").

White v. White, 2007 OK 86 (in child custody proceeding, finding that child custody proceeding implicates a "fundamental right protected by the federal and state constitutions" and parents are entitled to "an adversary hearing" regarding the existence of a material chance in circumstances and a "considered determination of the best interests of the child") ("The best interests of the child can be determined only by the evidence actually presented in an evidentiary hearing.").

In the Matter of the Guardianship of Holly, 2007 OK 53, 164 P.3d 137 (noting that certain oral arguments related to a ward’s proposed change in guardian was not a hearing, as the trial court "refused to allow them to present any evidence" in support of the proposed change) ("Unsworn, in-court statements by attorneys acting as advocates are not evidence.").

Crest Infiniti v. The Honorable Barbara G. Swinton, 2007 OK 77, 2007 WL 2937460 (when a trial court is considering a motion involving disputed facts, the facts "must be determined by the finder of fact at a hearing"; here, trial court failed to adjudicate the putative deponent’s corporate status for purpose of the motion to quash/motion for protective order).

Personal Dress and the Freedom to "Express"

The Sunday edition of the Tulsa World contains an article by Ben Braun detailing the varying style of dress donned by various courthouse players, from civil clients and criminal defendants to the "young" attorney caught without a tie on "causal" day at the office. The full article can be found here.

Reading the article brought to mind the seminal First Amendment, freedom of expression case, Cohen v. California, 430 U.S. 15 (1971) (A decision also famous for Justice Harlan's quote, "One man's vulgarity is another's lyric"). For background:

"On April 26, 1968, [Cohen] was observed in the Los Angeles County Courthouse in the corridor outside of division 20 of the municipal court wearing a jacket bearing the words ‘F**k the Draft’ which were plainly visible. There were women and children present in the corridor. [Cohen] was arrested. [Cohen] testified that he wore the jacket knowing that the words were on the jacket as a means of informing the public of the depth of his feelings against the Vietnam War and the draft." (Omission added).

Although not addressed by the Tulsa World article, the battle between dress and protest continues to rankle both government and citizen.

Take, for example, the case of Nicole and Jeffery Rank, who, in July of 2004 purchased tickets to attend a speech by President Bush. The tickets "provided that patrons would be seated on a first come, first served basis, without regard to either political affiliation or affinity with the President or his policies."

On July 4, 2004, the Ranks entered the area designated for the speech. While waiting for the President to arrive, the Ranks removed their outer shirts to display t-shirts that bore the international “no” symbol (a circle with a diagonal line across it) superimposed over the word “Bush.” Both shirts also displayed on the left sleeve a small photograph of President Bush with the international “no” symbol superimposed over it, and on the right sleeve a “Kerry” button. The message on the back of Nicole Rank's t-shirt was “Love America, Hate Bush.” On the back of Jeffrey Rank's shirt was the message “Regime Change Starts at Home.”

A short time later, the Ranks were approached by White House Event Staff Members who informed the Ranks that they could not remain on the grounds while wearing t-shirts critical of the President. When the Ranks refused to remove the shirts, they were arrested for trespassing by law enforcement officers who had previously been told that “White House Staff had the authority to revoke any person's ticket....”

On August 16, 2007, the government paid the Ranks $80,000 to dismiss their claim in what the ACLU described as, "a real victory not only for our clients but for the First Amendment."

Given the settlement, it is unknown how courts would decide the issue presented by the Ranks. On the one hand, the Ranks argue the First Amendment protects their expression from governmental intrusion. On the other hand, well-settled First Amendment jurisprudence clearly stands for the proposition that expressive freedoms are not "absolute," i.e., appropriate time, place and manner restrictions may apply depending upon the type of forum in which the expression occurred, in addition to other, content-based restrictions, e.g., the First Amendment does not protect fighting words or words intended to incite others.

Because content-based restrictions are the most loathsome restriction on free expression, and because the Ranks' t-shirts articulated a purely political message, unburdened by patently offensive language, the government would likely argue the President's speech was not an open forum. In other words, by requiring attendees to purchase a ticket, the nature of the forum at issue was materially altered by the terms and conditions of the ticket itself. As such, the government could impose content-neutral time, place and manner restrictions.

In the Ranks' case, it appears they were singled out because of the message appearing on their shirts, and not for any other reason. As such, it is difficult to fathom a content-neutral "time, place, manner," restriction that would govern the Ranks' personal dress to the exclusion of their corresponding freedom of expression.

(A more detailed analysis of First Amendment time, place and manner jurisprudence in the Northern District of Oklahoma, in the context of city council meetings, can be found here).

Bifurcation

Courts have broad discretion to bifurcate claims pursuant to Federal Rule of Civil Procedure 42(b). In a recent case, the defendant requested that the District Court for the Northern District of Oklahoma bifurcate plaintiff's breach of contract claim from the bad faith claim. The defendant claimed the bifurcation would conserve judicial resources and avoid prejudice to the defendant. The plaintiff did not object to the request.

Nevertheless, in a written opinion, the Court denied the request to bifurcate. The Court noted that it frequently conducts trials involving such claims and that, absent extraordinary circumstances, the Court does not bifurcate contract claims from bad faith claims during the liability/compensatory damages phase. And, the Court found no compelling reason to diverge from its general policy. The Court noted that it would bifurcate the liability/compensatory damages phase from the punitive damages phase, if necessary.

It should be noted that, in the state court system, the trial court (absent unusual circumstances) has no authority to bifurcate the contract claim from the bad faith claim. One Court has noted in an opinion that such "theories are connected and . . . should not be bifurcated." It appears that a state trial court has no discretion in this regard. "[T]he issue of whether the insureds had a legal right to recover from the uninsured motorist was not separable from the question of whether the insurer had a good-faith belief that it had a justifiable reason for withholding payment under the policy." See Newport v. USAA, 2000 OK 59, ¶ 26, 11 P.3d 190, 198

Summary Judgment to Non-Moving Party

An interesting opinion was issued by the Northern District of Oklahoma recently. Interesting on several fronts, actually. The case involved a "devout Muslim" who followed the tenets of Islam that "purport to advise followers to use Muslim prayer oils to enhance the spiritual value of their five daily prayers." The Department of Corrections had enacted a rule that, with a few exceptions, banned the sale of Muslim prayer oils in prison canteens and banned the in-cell possession and use of such oils by inmates. The plaintiff sued, claiming a violation of the First Amendment right to freely exercise his religion. Several years ago, the Northern District granted summary judgment to the defendant. The Tenth Circuit affirmed the Northern District's decision with respect to the First Amendment claim, noting that the defendant's policy was "rationally related to a legitimate penological interest." (The Tenth Circuit's opinion can be found here.) The Court remanded for purposes of allowing the district to consider whether the plaintiff -- who was pro se -- had adequately stated a claim under the "Religious Land Use and Institutionalized Persons Act" or "RLUIPA." (RLUIPA can be found here and is discussed here.)

Following remand to the Northern District, the Court found that the plaintiff had stated a RLUIPA claim and, thereafter, the plaintiff moved for summary judgment. Instead of granting summary judgment to the plaintiff, the Court found that the defendant was entitled to summary judgment, even though the defendant had not formally filed a Rule 56 motion. In its order, the Court noted that "[t]he weight of authority is that summary judgment may be rendered in favor of the opposing party even though he has made no formal cross-motion under rule 56." According to the court, summary judgment in favor of the non-moving party is appropriate where "the Court can determine that the non-moving party is entitled to a judgment as a matter of law and if there is no procedural prejudice to the moving party. No procedural prejudice results if the court finds that the parties had the opportunity to present and did present all of the applicable facts concerning the parameters of their positions."

And the Court found that the parties had a "full opportunity to explore the scope of their positions." Applying a strict scrutiny analysis, the Court found that summary judgment was appropriate in favor of the DOC because the DOC had "demonstrated that the compelling state interest in maintaining security and order in a hostile penal system outweighs [the plaintiff's] interest in having the prayer oils in his cell and that limiting access to the prayers [sic] oils to that stored in the chapel or other facility is the least restrictive means of furthering the state's interests."

"Proffer" vs. "Establish" or "Show"

The Tenth Circuit issued a new opinion today in an ADEA case. The district court granted summary judgment to the defendant, finding that the plaintiff had failed to bring forth sufficient evidence to create a jury question as to whether the defendant's alleged nondiscriminatory reason for terminating her was actually a pretext for age discrimination. The Tenth Circuit affirmed.

The case discusses the McDonnell Douglas burden-shifting analysis with respect to summary judgment standards, finding that the well-known analytical framework applies even during summary judgment determinations. "In the employment discrimination context, there is no need for a trial if one party has failed to produce sufficient evidence to carry its burden of persuasion. It is therefore appropriate for a court to reference the burdens of proof articulated by McDonnell Douglas in determining whether the parties have come forward with sufficient evidence to make a trial necessary."

Interestingly, the Court also discussed the nature of the burdens placed on the parties during the summary judgment stage. The burden is one of "production." The Court noted that cases had often described the burden of production in general terms like "establish" or "show." The Court noted that a nonmovant is only required to "bring forth evidence tending to establish or show the material fact at issue." With respect to the defendant's obligation to produce evidence of a legitimate nondiscriminatory reason for the adverse action, the Court stated that the proper terminology would be "proffer." Likewise, at the summary judgment stage, the plaintiff must "proffer some probative evidence that would be sufficient to sustain her burden of persuasion at trial, but she need not offer conclusive proof to the court in order to withstand summary judgment."

Word choice appears to matter in this context.

Teacher Discharge: Lessons on Standard of Review

In the recent case of Weston v. Indep. School Dist. No. 35 of Cherokee County, 2007 OK 61, the parties received a lesson in the vagaries of appellate "standard of review" in a teacher discharge case. In that case, a "career" teacher was dismissed by the board of education for the Tahlequah Public School system for "institutional ineffectiveness" and "unsatisfactory teaching performance."

The teacher had apparently been approached by the principal regarding his teaching methods; the principal told the teacher of his plans to "make him a better teacher." The principal had reviewed some of the teacher's previous test scores, and had some concerns, even though the teacher was not shown the test scores in question. The principal suggested that the teacher inprove his particular methodology by instituting a methodology known as "Teaching for Internalization." The method apparently involves: stating objectives, reviewing learned material, involving the learners, restating the objectives, restating the lesson's relevance to past learning and sutdents' experiences, and then summarizing.

Even though the teacher's teaching methods thereafter received satisfactory ratings, the principal recommended that he not be rehired. The superintendent gave him additional time to complete his efforts to improve, but subsequently concurred in the principal's recommendation. The school board agreed, and dismissed the teacher on the grounds of unsatisfactor teaching performance and institutional ineffectiveness.

The teacher petitioned for a new trial before a district court pursuant to 70 O.S. sec. 6-101.27. The section provides for de novo review of the school board's decision; no deference is given to the school board's findings and conclusions. The trial court found that the teacher had substantially complied with the principal's recommendations, and that the test results from students in his class were not substantially different than those of students in other classes.

The Court of Civil Appeals, however, found that the issue was not whether the teacher had complied with the plan of improvement, but whether his teaching was unsatisfactory or ineffective, and that the school board had made an appropriate decision.

(Interestingly, the district court failed to memorialize its findings in a journal entry, but merely read them into the record. After all of the appellate briefing was complete, the Court of Civil Appeals ordered the trial court to enter written findings of fact and conclusions of law, and thereafter supplement the appellate record with the findings. After the new findings were included in the appellate record, the Court of Civil Appeals allowed the parties to submit supplemental briefing related to the written findings. On certiorari, the Oklahoma Supreme Court held this to be an appropriate procedure.)

The Supreme Court of Oklahoma reversed and found that the appellate standard of review effectively prevented the Court of Civil Appeals from reversing the trial court's de novo review of the school board's decision. The Court noted that the standard before the court on appeal is "whether there is any compentent evidence to support the trial court's decision." The appellate court is prohibited from weighing the evidence. Only if the decision was clearly erroneous as a matter of law may the trial judge's findings not be accepted.

The Court also noted the importance of the teacher tenure law, finding that it "was intended to give job security to competent and qualified teachers and to protect them from dismissal or non-renewal for political, personal, arbitrary or discriminatory reasons." Tenure status grants teachers "substantive rights in their continued position." The Court ultimately held that the standard of review required affirmance of the trial court's decision:

There was testimony on Mr. Weston's behalf from a number of former students and their parents. Eighteen parents and students testified, in almost one-hundred pages of testimony, praising Weston's teaching and his effectiveness as a teacher. Students testified that they were not bored in class, that they had worked on special projects and had worked in groups, etc., in contradiction to the assertions of the administration. Those parents and students who were asked why they came to testify for Mr. Weston responded, variously, that it was because he was a good teacher, they did not believe that he should have been fired and they were surprised to learn that he had been fired. School District attempted to discredit their testimony because all of the students who testified made As and Bs in Mr. Weston's classes, suggesting that they were not representative. The burden, however, was on the School Board, who could have called as witnesses students or parents of students who felt adversely affected by Weston's teaching, which was one of the charges leveled at Weston.

The trial judge weighs the evidence and determines the credibility of witnesses and the weight to be given to their testimony. The trial judge applied the correct standard under the Teacher Due Process Act and found that the school district had failed to prove by a preponderance of the evidence that the teacher should be dismissed on the grounds of instructional ineffectiveness and unsatisfactory teacher performance. Because there was competent evidence supporting the trial judge's decision, it will be affirmed on appeal.