The opinion of the court was delivered by: Judge Caputo
Presently before the Court are two motions for summary judgment. Plaintiffs Jimmy Schlier and Wreckers International, Inc., move for partial summary judgment on liability against Defendants Major John G. Rice and Col. Jeffrey B. Miller, in both their individual and official capacities, for violation of Plaintiffs' First Amendment rights. (Pls.' Mot. for Partial Summ. J., Doc. 89.) Defendants John G. Rice, et al., move for summary judgment on all claims. (Defs.' Mot. for Summ. J., Doc. 96.) Because questions of material fact exist regarding the liability of Defendants Rice and Miller for First Amendment retaliation, Plaintiffs' motion for partial summary judgment will be denied. Because no claims have been made against Defendant Sharp, she will be dismissed from this action. Because questions of material fact exist regarding whether Defendants Rice, Miller, and Dougalas retaliated against Plaintiffs for exercise of their First Amendment rights; the evidence in the record, even resolving all disputed facts in favor of Plaintiffs, is not sufficient to make out a claim of First Amendment retaliation against Defendants McGuire, Transue and Robb; Plaintiffs have not adduced sufficient evidence to show that they had a property interest protected by the Fourteenth Amendment; and the evidence in the record, viewed in the light most favorable to Plaintiffs, shows a violation of Plaintiffs' clearly established rights by Defendants Rice, Miller, and Dougalas, Defendants' motion for summary judgment will be granted in part and denied in part.
The following facts are undisputed. Plaintiff Jimmy A. Schlier is the owner and president of Plaintiff Wreckers International Inc., d/b/a Schlier's Towing & Service Center ("Schlier's Towing"). (Decl. of Jimmy A. Schlier, Doc. 91 ¶ 1.) Schlier's business began performing towing services for the Pennsylvania State Police (PSP) in 1976 or 1977, and until September 2002, Plaintiffs were on the State Police's approved towing referral lists, whereby they regularly received requests from motorists and police to tow vehicles that were broken down, involved in accidents, or impounded for criminal investigations; Plaintiffs also regularly performed towing and repair services on police vehicles. (Pls.' Statement of Undisputed Material Facts, Doc. 90 ¶¶ 2, 5, 13 [hereinafter Pls.' Statement]; Defs.' Counterstatement of Undisputed Material Facts, Doc. 107 ¶¶ 2, 5, 13 [hereinafter Defs.' Counterstatement].)
Defendants are Colonel Jeffrey Miller, Commissioner of the PSP; Major John Rice, Commander of Area V and, in 2002, before his promotion from captain, the commanding officer of Troop N, which includes five (5) stations; Lieutenant David Dougalas, the station commander of the Swiftwater barracks of Troop N; Daniel McGuire, assistant counsel at the State Police Office of Chief Counsel (OCC) beginning April 8, 2002*fn1 ; Lieutenant Colonel Cynthia Transue, Commander of Area V in 2002; Joe Robb, Director of the Bureau of Vehicle Management in the Department of General Services (DGS) in 2002; and Josie Sharp, current Director of Vehicle Management in the DGS. (Pls.' Statement ¶¶8-10; Defs.' Counterstatement ¶¶ 8-10; Pls.' Second Am. & Supplemental Compl, Doc. 67, ¶¶ 6, 11; Defs.' Answer to Second Am. & Supplemental Compl., Doc. 103 ¶¶ 6, 11; Dep. of Daniel McGuire, Doc. 122-7, at 15: 2-10, 143: 3-8.)
In February 2001, the PSP adopted Field Regulation 6-2, which regulated the provision of emergency towing services. It provided troop commanders with authority to suspend towing operators from the referral lists for a number of reasons, including failure to maintain the regulation's standards; commission of an act involving dishonesty or corruption when it affects the health, welfare, or safety of others; overcharging for services, to be determined in conjunction with the fee schedule the operator submitted its application; or repeated conduct that tends to demean the public image of the Police. (Defs.' Statement of Undisputed Material Facts, Doc. 122 ¶¶ 3-4 [hereinafter Defs.' Statement]; Pls.' Counterstatement of Facts, Doc. 137 ¶¶ 3-4 [hereinafter Pls.' Counterstatement].)
In late 2001 or early 2002, disputes developed between Plaintiff Schlier and the PSP about billing. (See Pls.' Statement ¶ 15; Defs.' Counterstatement ¶ 15.) In January 2002, Mr. Schlier had a series of conversations with Representative Kelly Lewis, discussing trouble he was having getting paid for towing operations. (Dep. of Jimmy Schlier, Oct. 19, 2005, Doc. 140-6, at 61-64.) In response to a price that the Police thought exorbitant and a complaint filed against Schlier's Towing by another company, which led to an investigation into possible deceptive practices by Schlier's Towing, the PSP decided to no longer use Schiler's services exclusively but to seek out the best price each time towing services were needed. (See Defs.' Statement ¶¶ 12-18; Pls.' Counterstatement ¶¶ 12-18.) Mr. Schlier called then-Captain Rice to express concern that his services were no longer being used, and Rice informed him of the decision; at this point, Schlier complained of unpaid bills and Rice told Schlier to forward any such bills to Rice for his evaluation. (Defs.' Statement ¶¶ 18-19; Pls.' Counterstatement ¶¶ 18-19.) Schlier then sent more than sixty (60) bills totaling thirty-three thousand, three hundred twenty-five dollars and seventy-five cents ($33,325.75). (Pls.' Statement ¶ 17; Defs.' Counterstatement ¶ 15.)
On April 27, 2002, Plaintiff Schlier sent a formal complaint to the Director of the Division of Internal Affairs, which investigates reports of misconduct, alleging that the Swiftwater barracks had failed to pay bills and had improperly directed towing business to another towing operator owned by a convicted felon. (Pls.' Statement ¶¶ 18-21; Defs.' Counterstatement ¶¶ 18-21.) This complaint was forwarded to Rice by May 22, 2002. (Pls.' Statement ¶ 23; Defs.' Counterstatement ¶ 23.) Rice later asked his personnel to survey Plaintiffs' rates, and after a survey, Lieutenant Dougalas reported to Rice that Plaintiffs' rates were two (2) to four (4) times higher than competitors'. (Defs.' Statement ¶¶ 25-27; Pls.' Counterstatement ¶¶ 25-27.) Although this much is undisputed, Plaintiffs dispute Dougalas' conclusion itself and even dispute that Dougalas believed it. (Pls.' Counterstatement ¶ 26.)
On August 27, 2002, Rice informed Plaintiff that his company would be removed from all Troop N referral lists effective September 6, 2002. Rice informed Plaintiff that his decision was based on four factors: (1) Schlier's Towing failed to meet the requirement of charging reasonable and customary fees; (2) the company demeaned the image of the State Police by falsely communicating to another business that it had a contract with the Police and that the Police approved of its billing practices; (3) a complaint filed by that other company against Schlier's Towing resulted in a criminal investigation into deceptive or fraudulent business practices; and (4) Schliers's Towing submitted invoices to the Police totaling thirty-three thousand, three hundred twenty-five dollars and seventy-five cents ($33,325.75) but the State Police do not act as guarantor of the expenses that motorists may owe to emergency towing operators and the Police will not assume responsibility for the expenses. Finally, Rice informed Plaintiff that he could apply for reinstatement after six (6) months, contingent upon taking "appropriate remedial action so that [your business] will not conflict with the standards required by the Pennsylvania State Police." (Pls.' Statement ¶¶ 24-25; Defs.' Counterstatement ¶¶ 24-25.) The criminal investigation of Schlier's Towing ended September 26, 2002, after the district attorney declined prosecution. (Pls.' Statement ¶ 53; Defs.' Counterstatement ¶ 53.)
On November 15, 2002, Schlier's Towing filed an action with the Pennsylvania Board of Claims against the PSP to recover the charges it claimed it was owed, and the Board of Claims entered an opinion sustaining Plaintiffs' claim as stating a cause of action for breach of an implied-in-fact contract or an implied-in-law contract. (Pls.' Statement ¶¶ 54-55; Defs.' Counterstatement ¶¶ 54-55.) In March 2003, Plaintiffs unsuccessfully applied for reinstatement to the Police referral lists. (Pls.' Statement ¶¶ 57-60, 62-64; Defs.' Counterstatement ¶¶ 57-60, 62-64.)
In March 2006, Plaintiffs, through counsel, sent a letter to Colonel Miller complaining that the PSP had removed them from the referral lists in retaliation for exercise of their First Amendment rights to petition the government for redress of grievances, namely, for submitting the invoices. Plaintiffs argued in the letter that the reasons Rice gave for the suspension were pretextual. (Pls.' Statement ¶ 67; Defs.' Counterstatement ¶ 67.) An assistant counsel with the State Police then wrote to Plaintiffs' counsel that his letter was best directed not to Miller but to the Office of Attorney General, which represented the Defendants, as that he would forward it there. (Pls.' Statement ¶ 68; Defs.' Counterstatement ¶ 68.)
In August of 2006, after Plaintiffs moved for a preliminary injunction ordering Colonel Miller and Major Rice to reinstate them to the towing referral lists, the parties agreed to a rate schedule and Plaintiffs were reinstated to the lists. (Pls.' Statement ¶¶ 70-75; Defs.' Counterstatement ¶¶ 70-75.) As both parties have moved for summary judgment, disputed facts will be discussed below in the context of each party's motion.
II. Procedural Background
Plaintiffs filed their Complaint on August 20, 2004. (Doc. 1.) Plaintiffs filed their Amended Complaint (Doc 18), mooting Defendants' initial Motion to Dismiss (Doc. 13). Defendants then moved to dismiss the Amended Complaint (Doc. 20), and this Court denied that motion in its Memorandum and Order of February 16, 2006. (Doc. 29).
Plaintiffs later filed their Second Amended and Supplemental Complaint on October 25, 2006. (Doc. 67.) Defendants moved to dismiss Count III of that Complaint (Doc. 76.), and this Court denied their motion in its Memorandum and Order of January 11, 2007. (Doc. 99.) Defendants filed their Answer to the Second Amended and Supplemental Complaint on January 25, 2007. (Doc. 103.)
Both parties now move for summary judgment. Plaintiffs move for partial summary judgment on liability against Major Rice and Colonel Miller, in their individual and official capacities, for violating Plaintiffs' First Amendment rights. (Pls.' Mot. for Partial Summ. J., Doc. 89.) Defendants move for summary judgment on all claims. (Defs.' Mot. for Summ. J., Doc. 96.) These motions are fully briefed and ripe for disposition.
Summary judgment is appropriate if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED. R. CIV. P. 56(c). A fact is material if proof of its existence or nonexistence might affect the outcome of the suit under the applicable substantive law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
Where there is no material fact in dispute, the moving party need only establish that it is entitled to judgment as a matter of law. Where, however, there is a disputed issue of material fact, summary judgment is appropriate only if the factual dispute is not a genuine one. See id. at 248. An issue of material fact is genuine if "a reasonable jury could return a verdict for the nonmoving party." Id.
Where there is a material fact in dispute, the moving party has the initial burden of proving that: (1) there is no genuine issue of material fact; and (2) the moving party is entitled to judgment as a matter of law. See CHARLES ALAN WRIGHT & ARTHURR. MILLER, FEDERALPRACTICE AND PROCEDURE: CIVIL 2D § 2727 (2d ed. 1983). The moving party may present its own evidence or, where the nonmoving party has the burden of proof, simply point out to the Court that "the nonmoving party has failed to make a sufficient showing of an essential element of her case." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
All doubts as to the existence of a genuine issue of material fact must be resolved against the moving party, and the entire record must be examined in the light most favorable to the nonmoving party. See White v. Westinghouse Elec. Co., 862 F.2d 56, 59 (3d Cir. 1988). Once the moving party has satisfied its initial burden, the burden shifts to the nonmoving party to either present affirmative evidence supporting its version of the material facts or to refute the moving party's contention that the facts entitle it to judgment as a matter of law. See Anderson, 477 U.S. at 256-57.
The Court need not accept mere conclusory allegations, whether they are made in the complaint or a sworn statement. Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 888 (1990). In deciding a motion for summary judgment, "the judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Anderson, 477 U.S. at 249.
Plaintiffs' claims for violations of their First and Fourth Amendment rights are brought pursuant to 42 U.S.C. § 1983, under which, every person who, under color of state law, subjects another to the deprivation of any federal right shall be liable to the party injured. Plaintiffs argue, in their motion for partial summary judgment, that no genuine dispute of material fact exists as to whether Defendant Rice retaliated against Plaintiffs for the petition they filed with the state Board of Claims by not reinstating them to police referral lists, and that no evidence of any other reason for non-reinstatement exists. (Br. in Supp. Pls.' Mot. for Partial Summ. J., Doc. 92, at 5.) Plaintiffs also claim that no genuine dispute of material fact exists as to whether Defendant Colonel Miller "knew of and disregarded," or "knowingly acquiesced" in violations of Plaintiffs' civil rights by Defendant Rice and others. (Id. at 15.)
Defendants argue that they are entitled to summary judgment as to Plaintiff's First Amendment retaliation claim and Plaintiffs' Fourteenth Amendment due process claim, and that, in the alternative, all Defendants are entitled to qualified immunity from suit. (Defs.' Br. in Supp. of ...