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RAO v. NEW YORK CITY HEALTH & HOSPS. CORP.

August 16, 1995

RAMAKRISHNA C.V. RAO, Plaintiff, against NEW YORK CITY HEALTH AND HOSPITALS CORPORATION; JO IVEY BOUFFORD, both individually and in her capacity as President of the New York City Health and Hospitals Corporation; ANTHONY JAPHA, both individually and in his capacity as Vice President of the New York City Health and Hospitals Corporation; DENNIS NEWMAN, both individually and in his capacity as Chief Engineer of the New York City Health and Hospitals Corporation; ROBERT WEIGAND, both individually and in his capacity as Deputy Chief Engineer of the New York City Health and Hospitals Corporation; and PAUL ROZSYPAL, both individually and in his capacity as Group Director of the New York City Health and Hospitals Corporation, Defendants.


The opinion of the court was delivered by: JOHN G. KOELTL

 John G. Koeltl, District Judge:

 After a nine day trial of these consolidated cases, a jury returned a verdict, based on answers to special interrogatories, finding for the plaintiff, Ramakrishna Rao, against defendants Anthony Japha, Dennis Newman, and Robert Weigand on the plaintiff's claim that their termination of his employment at the New York City Health and Hospitals Corporation ("HHC") violated his First Amendment rights. The jury awarded compensatory damages of $ 100,000 under 42 U.S.C. § 1983. It found the remaining individual defendant, Paul Rozsypal, not to be liable for any violation of the plaintiff's First Amendment rights and found that none of the defendants terminated the plaintiff's employment on account of his national origin. *fn1" The jury also found that the wrongful actions of the liable defendants were not taken pursuant to an official policy, custom, or practice of HHC and thereby found HHC not to be liable to the plaintiff. See Monell v. Dep't of Social Services, 436 U.S. 658, 56 L. Ed. 2d 611, 98 S. Ct. 2018 (1978). In addition to his § 1983 claims for violation of First and Fourteenth Amendment rights, the plaintiff pleaded claims for violations of Title VII of the Civil Rights Act of 1964 which were not presented to the jury, because this action was filed prior to the 1991 amendments to the Act. See Postema v. Nat'l League of Professional Baseball Clubs, 998 F.2d 60, 61-62 (2d Cir. 1993) (holding that 1991 Civil Rights Act amendments to Title VII providing for jury trials are not retroactive). After trial, the Court dismissed the Title VII claims in an opinion and order dated April 7, 1995 in accordance with the jury's finding that Rao had not been terminated on account of his national origin. See Rao v. New York City Health and Hosp. Corp., 882 F. Supp. 321 (S.D.N.Y. 1995). The defendants now move for judgment as a matter of law pursuant to Fed. R. Civ. P. 50(b).

 At trial, all of the defendants admitted to having participated in the termination of the plaintiff's employment with HHC in March, 1987. The jury was asked to determine: 1) whether the individual defendants' decisions to terminate Rao's employment were motivated by his national origin, and 2) whether Rao had engaged in various forms of speech that the Court found to be protected by the First Amendment and, if so, whether such speech was a substantial or motivating factor in the defendants' termination decisions. The jury found that for defendants Japha, Newman, and Weigand the following instances of protected speech were substantial or motivating factors in their decisions to terminate Rao: (1) Rao's verbal complaints about the failure of a contractor, Joseph L. Muscarelle, Inc., to comply with the terms of its contract with HHC for work to be done at the Cumberland Neighborhood Family Care Center in Brooklyn and (2) Rao's December 15, 1986 memorandum to defendant Weigand complaining about Muscarelle's alleged failings and alleged extortionate threats made by Free At Last, a community group allegedly demanding money and jobs at the project. *fn2" The jury also found the liable defendants did not prove by a preponderance of the evidence that they would have terminated Rao's employment even if they had not considered his protected speech. See Mt. Healthy City School Dist. Bd. of Educ. v. Doyle, 429 U.S. 274, 50 L. Ed. 2d 471, 97 S. Ct. 568 (1977) (holding that once the finder of fact determines that protected speech was a substantial or motivating factor in a municipal defendant's adverse action against a municipal employee, the finder of fact must consider whether the defendant has established a defense by proving by a preponderance of the evidence that the defendant would have taken the same action in the absence of the protected speech). Thus, the jury's answers to the special interrogatories established that defendants Weigand, Japha, and Newman terminated Rao's employment in violation of 42 U.S.C. § 1983. *fn3"

 The defendants have moved for judgment as a matter of law, arguing that the speech that the jury found to have been a substantial or motivating factor in Rao's termination was not protected by the First Amendment, or, alternatively, if it was protected, the defendants are entitled to qualified immunity, because they reasonably believed their actions were not violative of the plaintiff's rights. For the reasons stated below, the defendants' motion is denied.

 I.

 In the opinion dated April 7, 1995, the Court made the following findings of fact in dismissing the plaintiff's Title VII claim in conformance with the finding of the jury that he was not terminated on account of his national origin. See Rao, 882 F. Supp. 321. On July 21, 1986, HHC hired plaintiff Ramakrishna Rao as a Director, Engineering and Facilities Services, Capital Programs, on the recommendation of defendant Robert Weigand who was Senior Deputy and Chief Engineer, Capital Programs. During his tenure at HHC, Rao's superiors were defendants Weigand; Paul Rozsypal, Group Director, Construction Management, Capital Programs; Dennis Newman, Assistant Vice President and Chief Engineer, Capital Programs; and Anthony Japha, Senior Assistant Vice President, Capital Programs.

 Rao was initially assigned as Director of HHC's North District, which encompassed the Bronx and Upper Manhattan. In the North District, Rao had encountered significant difficulties with a subordinate, Gary Yates, whom Rao considered to be insubordinate. In December, 1986, the defendants transferred Rao to a temporary assignment as the on-site project manager at the Cumberland Neighborhood Family Care Center in Brooklyn, which was undergoing extensive renovation in HHC's most expensive new construction project at the time. Rao authored a December 15, 1986 memo to defendant Weigand (attached hereto as Appendix A) complaining about numerous aspects of the Cumberland project, including alleged deficiencies in the performance of Joseph L. Muscarelle, Inc., a contractor, and of alleged extortion attempts by a community action group, Free at Last. Weigand was not pleased with the memo, alleging at trial that the reason for his dissatisfaction was that he was already aware of virtually everything reported in it. Rao testified:

 
Mr. Weigand was furious. He indicated that over the phone, he had no time to read my December 15th memorandum, Exhibit 21, and I should not be writing or sending such memoranda in the future without his approval. And he immediately said that is not why I sent you to Cumberland.

 Tr. of Nov. 23, 1994 at 14. Rao also testified that after reading the memorandum Weigand said that Rao should look for another job. Id.

 On December 23, 1986, Rao met with defendant Japha and they discussed some of Rao's concerns about his employment situation. Japha told Rao that if he could not get along with Weigand, he should find another job. On or about February 10, 1987, defendant Weigand informed Rao that his services were no longer required and offered him the option of resigning. Weigand had discussed the decision to terminate Rao with both Japha and Newman who concurred. On February 13, 1987, Rao was informed that he had been given an unsatisfactory performance evaluation. Rao received a copy of the evaluation on February 23, 1987. On or about March 6, 1987, Rao received a letter informing him that his employment with HHC would be terminated effective March 13, 1987.

 II.

 A public employee may not be terminated due to the exercise of the employee's First Amendment rights. See Luck v. Mazzone, 52 F.3d 475, 476 (2d Cir. 1995) ("A public employee does not relinquish her First Amendment rights to comment on matters of public interest by virtue of government employment.") (citing Connick v. Myers, 461 U.S. 138, 140, 75 L. Ed. 2d 708, 103 S. Ct. 1684 (1983) and Pickering v. Board of Educ., 391 U.S. 563, 568, 20 L. Ed. 2d 811, 88 S. Ct. 1731 (1968)). To prevail on a claim for wrongful termination in violation of First Amendment rights, a public employee must show (1) that the speech at issue was constitutionally protected and (2) that it was a substantial factor in the decision to terminate the employment. Mount Healthy, 429 U.S. at 286; White Plains Towing Corp. v. Patterson, 991 F.2d 1049, 1057-59 (2d Cir. 1993). If the plaintiff proves these elements, a public employer and its agents may avoid liability by proving by a preponderance of the evidence that they would have terminated the plaintiff even in the absence of protected conduct. Mount Healthy, 429 U.S. at 286; White Plains Towing, 991 F.2d at 1059.

 To be protected by the First Amendment and by judicial remedies, speech by a government employee must address a matter of public concern. Connick, 461 U.S. at 140-49. However, speech addressing a matter of public concern will only be protected if the interests of the employee, as a citizen, in commenting upon matters of public concern outweigh the interests of the State, as an employer, in promoting the efficiency of the public services it performs through its employees. See Pickering, 391 U.S. at 568 ("The State has interests as an employer in regulating the speech of its employees that differ significantly from those it possesses in connection with regulation of the speech of the citizenry in general."). Pickering balancing is not at issue in this case, because the defendants have not argued that the plaintiff's allegedly protected speech interfered with administrative efficiency to such a degree as to justify the plaintiff's termination. See Tr. 954-55, 1045, 1085. *fn4" Rather, the defendants argue that the plaintiff's speech was not protected, because it did not address a matter of public concern. Whether a particular instance of speech relates to a matter of public concern is a question of law to be answered by the Court. Connick, 461 U.S. at 148 n.7; Luck, 52 F.3d at 476.

 Rao's December 15, 1986 memorandum to defendant Weigand expressed Rao's concerns about the progress of the Cumberland Neighborhood Family Care Center project which he had the duty of managing. Rao's official duties did not require him to write the memorandum and it was not solicited by Weigand, who was in fact displeased that Rao had written it. The memorandum sets forth various shortcomings of the project's general contractor, Joseph L. Muscarelle, Inc., and documents them by reference to prior memoranda by Rao which were attached to it, including memoranda to Sanford Krusch, Muscarelle's representative at the project. Prior to listing fourteen alleged failings of the contractor, the December 15 memorandum states:

 
Please refer to our discussions on December 13, 1986, regarding the failure of our Construction Consultant in providing the Construction Management Services we contracted for, my letters and memoranda seeking your approval for the proposed remedial action, copies attached, and the threats from Jameson of Free At Last. Any further delay in taking appropriate action will seriously prejudice our interests.
 
The project is behind schedule as such and it will not be completed on time and within budget. The extent of delay and the budget slip depend solely on the performance of our Construction Consultant which, as of this date, is far from satisfactory.

 After listing the shortcomings of Joseph L. Muscarelle, Inc., the memorandum concludes:

 
We are paying the Construction Consultant around $ 1,000,000 and based on the IFA fee of around $ 1,000,000 we can support a staff of twelve (12) at $ 80,000 per individual. If you can give me one (1) Construction Manager, two (2) Superintendents of Construction and (1) PAA, I can bring this project to a satisfactory conclusion without the Construction Consultant.
 
I am also seeking your help in view of the threats from Jameson of Free At Last who wants $ 50,000 per year from us. (See, My memorandum dated 12/5/86 to you.)

 Rao gave the following testimony at trial regarding his knowledge of the community group Free at Last at the time that he wrote the December 15 memorandum:

 
Free at Last is or was a locally-based minority organization seeking jobs for black, African and other minorities in the Cumberland area. . . . The method they were using was extortion. They wanted $ 50,000 per year under the table so that there would be peace on the project. If that amount is not paid, then the work would be stopped and people would get hurt.
 
Jameson of Free at Last did not like the response I gave him just like we discussed. He called me "headstrong" in [another employee's] presence and left with an implied threat that more. . . to follow.
 
Need your help before this implied threat becomes an actuality.

 At trial, the defendants moved for judgment as a matter of law at the close of the plaintiff's case. In denying the motion, the Court declared:

 
I'm certainly satisfied at this point that there are specific statements that would be matters of public concern taking into account all of the Second Circuit cases with respect to complaints by public officials with respect to matters of public concern, whether those are matters reported to investigative authorities or to superiors.
 
For example, the December 15th memo is a statement about specific deficiencies by a contractor on an important city project, as well as an allegation with respect to the possibility of an improper payment associated with that project. That certainly would be a matter of public concern. And there is no evidence that the possible disruption from issuing such a memo in the employment context would take that memo out of the context of protected speech.

 Tr. of December 5, 1994 at 955. The motion for judgment as a matter of law was renewed and denied again at the close of the case. Id. at 1045.

 Addressing the issue for the third time, the Court again finds that Rao's December 15, 1986 memorandum to defendant Weigand and its attachments, as well as his verbal complaints about the failure of Joseph L. Muscarelle, Inc. to comply with the terms of its ...


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