The opinion of the court was delivered by: William W. Caldwell United States District Judge
The plaintiffs are Gerald Kohn, Julie Botel, and Rebecca Hostetler. Kohn is the former superintendent of the Harrisburg School District, Botel the deputy superintendent, and Hostetler the assistant superintendent. They brought this suit to contest the termination of their employment. The action was filed in state court and removed here by the defendants under our federal question jurisdiction. See 28 U.S.C. §§ 1331 and 1446(b) and (c). After removal, Plaintiffs filed an amended complaint.
The defendants are the School District; the District's Board of Control and its members, Gloria Martin-Roberts, Herbert Goldstein, Autumn Cooper, Sanford Long, Jennifer Smallwood, Roy E. Christ, and Esther E. Edwards; the "Elected School Board" and its members, Lola D. Lawson, Lionel Gonzalez, Wayne L. Henry, Randy King, Jeffrey Moore, Tiffiney Penn, Patricia Whitehead-Myers, Roy E. Christ, and Esther E. Edwards. Also named as a defendant is Linda D. Thompson, the Mayor of the City of Harrisburg.
Plaintiffs were terminated by a vote of the seven-member Board of Control without notice or a hearing. In their amended complaint, all three plaintiffs join in seven causes of action, with the gravamen of those claims being that Plaintiffs could not be discharged at will and had a right to notice and a hearing before they could be discharged. Plaintiffs base their claims on the Due Process Clauses of the federal and state Constitutions, the state School Code, the Pennsylvania Local Agency Law, and contract. Kohn makes a separate claim against Mayor Thompson that she violated his right to due process by publicly stigmatizing him in connection with his discharge.
Conversely, Defendants maintain that Plaintiffs were at-will employees who could be fired at any time without any process being due them and that therefore their discharges are not actionable. We are considering five motions to dismiss under Fed. R. Civ. P. 12(b)(6), one filed by the School District, one by Christ and Edwards (members of both the Board of Control and the Elected School board), one by the Elected School Board and its members, one by the Board of Control and its members except for Christ and Edwards, and one by Mayor Thompson. The Board of Control has also filed a motion to dismiss under Fed. R. Civ. P. 12(b)(5).
On a motion to dismiss under Rule 12(b)(6), "[w]e 'accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief.'" Byers v. Intuit, Inc., 600 F.3d 286, 291 (3d Cir. 2010)(quoted case omitted). The court is not limited to evaluating the complaint alone; it can also consider documents attached to the complaint, matters of public record, and indisputably authentic documents. Delaware Nation v. Pennsylvania, 446 F.3d 410, 413 n.2 (3d Cir. 2006).
With this standard in mind, we present the background to this case, as Plaintiffs allege it.
In pertinent part, Plaintiffs allege as follows. "In or around 2000, the Harrisburg School District had the lowest Pennsylvania System of State Assessment ("PSSA") scores of all the school districts in the Commonwealth of Pennsylvania. The PSSA is an assessment test used to measure a student's attainment of the academic standards while also determining the degree to which school programs enable students to attain proficiency of the standards." (Am. Compl. ¶ 34). "In addition, the Harrisburg School District had a number of other failing organizational functions and statistics. For example, more students dropped out of school than graduated." (Id. ¶ 35).
"In an effort to rehabilitate the School District's, and other Commonwealth school districts', continually failing performance and history of low PSSA scores, the Pennsylvania General Assembly enacted the Education Empowerment Act (Act No. 2000-16)("EEA"), effective July 1, 2000," 24 Pa. Stat. Ann. § 17-1701-B to § 17-1716-B (West 2006 & West Supp. 2011).
"The Harrisburg School District was determined to have a '[h]istory of extraordinarily low test performance' defined by the EEA as a combined average of sixty percent (60%) or more of students scoring in the 'below basic level' of performance on the PSSA in math and reading in the most recent two school years." (Id. ¶ 38). Pursuant to the EEA, the School District was certified in July 2000 as an "education empowerment district." (Id. ¶ 39).
Under the EEA and an amendment to that act, the mayor of the City of Harrisburg, then Stephen R. Reed, assumed control of the School District on December 19, 2000. (Id. ¶ 40). The EEA provided for a five-member Board of Control appointed by the mayor to run the District, except for the levying of taxes, which was left to the Elected School Board. (Id. ¶ 41). A 2007 amendment to the EEA expanded the Board of Control to seven members, five appointed by the mayor and two from the Elected School Board to be selected by the members of the Elected School Board. (Id. ¶ 42).*fn1
Under the EEA, Mayor Reed appointed a school district "Empowerment Team" to create the "School District Improvement Plan" required under the act. (Id. ¶ 43). The Improvement Plan became effective on August 31, 2001. (Id. ¶ 48). The Plan "acknowledged that the School District had come under the EEA because greater than 50% of the district's students scored in the lowest quartile on the PSSA for two consecutive years." (Id. ¶ 49). The Plan "listed as its first and primary goal to reduce the percentage of students scoring in the lowest group on the PSSA to less than 50%." (Id. ¶ 51). The Plan also acknowledged that "the district's chronic leadership and management issues" had to be addressed. (Id. ¶ 50).
The School District and the Board of Control conducted a national search for a superintendent. (Id. ¶ 58). In July and August 2001, the School District and the Board of Control hired Kohn to be the superintendent and Botel to be the deputy superintendent. (Id. ¶ 59). Kohn and Botel signed written agreements for five-year terms with an option for another five years. (Id. ¶ 61). There were never any complaints about their performance during this original employment period. (Id. ¶ 62).
In December 2005, the School District and the Board of Control exercised the option to renew Kohn's and Botel's contracts for another five years, with an option for a further five-year term. (Id. ¶¶ 65-66). Kohn's new agreement started on July 16, 2006, and was to end on July 15, 2011. Botel's new agreement began on August 7, 2006, and was to end on August 6, 2011. (Id. ¶ 67). In December 2005, the School District and Board of Control entered into a five-year employment agreement with Hostetler to serve as assistant superintendent starting December 1, 2005, and ending on December 1, 2010. (Id. ¶ 68). The three agreements are attached to the complaint as exhibits, and all three are between the respective plaintiff and the School District.
All three agreements contain an identical provision. Quoting from Kohn's agreement, the provision reads as follows:
Dr. Kohn's employment may be suspended or terminated by THE SCHOOL DISTRICT for neglect of duty, incompetency, intemperance or immortality (sic) as set forth in the Pennsylvania School Code of 1949, as amended; 24 P.S. §10-1080. In any job action, DR. KOHN is entitled to any and all rights available under the Pennsylvania Local Agency law and the Pennsylvania School Code of 1949, as amended; any appeal of said job action shall be taken to the Court of Common Pleas of Dauphin County and to the Pennsylvania appellate courts, if necessary. THE BOARD [of Control] shall not arbitrarily or capriciously call for the dismissal of DR.
KOHN and he shall in any event have the right to written charges, notice of hearing, and fair and impartial hearing and appeal as provided for above. At any such hearing or appeal, DR. KOHN shall have the right to be present and to be heard and to be represented by counsel of his choice at SCHOOL DISTRICT expense. (Am. Compl. ¶ 70)(quoting Kohn Employment Agreement, ¶ 12, Am. Compl., Ex. A). As noted, the Botel and Hostetler agreements contain the identical provision in paragraph 9 (Am. Compl., Ex B) and paragraph 8, (Am. Compl., Ex. C), respectively, except of course, that in their contracts Botel and Hostetler are named instead of Kohn. This provision essentially prohibits termination of the plaintiffs except for cause and only after notice and a hearing.
"Over the next several years following renewal of the Employment Agreements and the hiring of Hostetler, under the leadership of plaintiffs the School District continued to implement the provisions and strategies of the Improvement Plan -- resulting in steady progress toward and meeting the Goals set by the Improvement Plan, including dramatic improvement in the academic performance of district students." (Id. ¶ 77). "The Education Empowerment Annual Reports of the PDE specifically noted that 'since the implementation of the EEA in 2000, significant performance gains have been realized.'" (Id. ¶ 78). "The Education Empowerment Annual Report for the 2006-2007 School Year by [the Pennsylvania Department of Education] noted specifically for Harrisburg School District: 'Student performance under EEA guidelines has improved gradually each year for the past six years.'" (Id. ¶ 79). "Each year the Education Empowerment Annual Report made note of 'Significant Accomplishments' of the Harrisburg School District, including the increase in college acceptance rates, the increase in enrollment, the development of a comprehensive Literacy Handbook, advanced training for teachers and principals and the Central Office Staff's weekly Learning Walks through all schools in the district." (Id. ¶ 80).
"Based on the [Pennsylvania Department of Education's] PSSA data, the Harrisburg School District ranked eighth out of the state's 498 school districts in percentage improvement (84.52%) in reading and math performance from 2002 to 2008." (Id. ¶ 81). "The School District reduced its 'Below Basic' group of students on the PSSA from 68.1% in 1999 to 49.2% in 2008 while increasing its 'Proficient'/'Advanced' group from 11.1% to 28.7%." (Id. ¶ 82). "For the school year 2007-2008, the PSSA data demonstrates that the School District met the state empowerment goal of having less than 50% of students tested scoring 'Below Basic' on the PSSA [49.2%]." (Id. ¶ 83). "For the school year 2008-2009 -- for the second consecutive year -- the School District satisfied the state empowerment criteria with a score of 45.7% of students scoring 'Below Basic.'" (Id. ¶ 84). "Finally, for the school year 2009-2010, the School District further reduced the percentage of its students scoring Below Basic to 39.6%." (Id. ¶ 85).
This rate of success, having less than 50% of students scoring "below basic" on the PSSA for three consecutive years, meant that the plaintiffs not only met the goals of the Improvement Plan but also the criteria set forth in the EEA. (Id. ¶ 88). In addition, for the years 2001 through 2009, the percentage of students graduating rose 171% and college acceptances rose 419%. (Id. ¶¶ 89-90).
"At all times material and relevant hereto, plaintiffs each maintained at least satisfactory performance ratings. In fact, in each of plaintiffs' most recent performance reviews, they received a performance review of 'Excellent.'" (Id. ¶ 76). Kohn's review was completed by the Board of Control in December 2009. He was rated as "near Excellent." (Am. Compl., Ex. D).
In November 2009, Linda Thompson was elected as the new mayor of
Harrisburg, and she took office in January 2010. (Id. ¶¶ 91-92). She
appointed five new members to the Board of Control.*fn2
On March 15, 2010, the Board of Control held a public
meeting. At the meeting, the newly appointed members voted to
"rescind" plaintiff Kohn's and Botel's employment agreements,
effective immediately, doing so "arbitrarily," and some sixteen months
before their employment agreements were to expire. (Id. ¶¶ 93-94). The
other two members, Roy Christ and Esther Edwards, voted against
rescission. (Doc. 35-3, CM/ECF p. 45, Board minutes for March 15,
On May 17, 2010, the Board of Control held another public meeting. At that meeting, the Board voted to "rescind" Hostetler's employment agreement, with some six months and two weeks remaining on it. (Id. ¶¶ 96, 98). "Hostetler was told that her Employment Agreement was rescinded because she was 'too close to Doctor Kohn.'" (Id. ¶ 97). Roy Christ voted against rescission of Hostetler's agreement, and Esther Edwards was not present for the vote. (Doc. 35-4, CM/ECF pp. 40-41, Board minutes for May 17, 2010).
Plaintiffs aver that "[n]either the School District nor Board of Control provided plaintiffs with written charges as to why their contracts were being 'rescinded,' nor were the plaintiffs given a fair and impartial hearing," as allegedly required by the employment agreements, the Public School Code, 24 Pa. Stat. Ann. § 10-1080 (West 1992), and the Local Agency Law. 2 Pa. Con. Stat. Ann. §§ 551-555 (West 2008). (Id. ¶ 100). The "rescission" of plaintiffs' employment agreements "was not consistent with the Improvement Plan." (Id. ¶ 102). In fact, it caused "the loss of significant grant monies . . . ." (Id. ¶ 104). "With more than $22 million of grant applications in the pipeline for 2010-11 (a conservative estimate based on the previous administration's track record), the School District could have received at least $17 million. Instead, the new administrators applied for only $7 million and received a mere $300,000." (Id. ¶ 131).
The EEA expired on June 30, 2010, and control of the School District was returned to the Elected School Board. (Id. ¶ 105). "Despite repeated requests, the School District and the Elected School Board refuse to reinstate plaintiffs' employment and refuse to provide plaintiffs with a hearing." (Id. ¶ 110). Plaintiffs allege that the "Elected School Board has in effect ratified the unlawful rescissions of the Board of Control by failing to take action and failing to reinstate the plaintiffs." (Id. ¶ 111).
"It is believed and averred that the Board of Control 'rescinded' plaintiffs' Employment Agreements as part of the Mayor's plan and personal agenda to destroy plaintiff Kohn's career and those of the people that supported him." (Id. ¶ 113). The Mayor "vowed she would get even with Kohn" after he agreed not to renew the contract of Loveship, Inc, her non-profit corporation, a contract under which Loveship provided job counseling services in the School District's alternative education program. (Id. ¶¶ 114-117).
During her campaign for mayor, Mayor Thompson "publicly promised to fire plaintiff Kohn as the School District Superintendent." (Id. ¶ 118). "At the time the School District and Board of Control 'rescinded' the plaintiffs' Employment Agreements, Mayor Thompson continued her attack against plaintiff Kohn, falsely stating that Kohn failed to perform his job and that keeping Kohn as Superintendent would be a crime against the students of the Harrisburg School District." (Id. ¶ 119). "In fact, in a news article reported on www.abc27.com, the Mayor falsely stated: 'He [Kohn] committed a crime by failing to educate our kids and now he's committing another crime by coming back and asking us to pay him for failed performance . . . .'" (Id. ¶ 121). "The Mayor made similar defamatory remarks in various television interviews and other news articles." (Id. ¶ 122). The Mayor's "false statements" have damaged Kohn's "standing and association in the educational employment community . . . ." (Id. ¶ 198). As a result, Kohn allegedly has been foreclosed from pursuing "innumerable public school employment opportunities in the Commonwealth of Pennsylvania and elsewhere." (Id. ¶ 199).
Plaintiffs collectively refer to the Board of Control and its members as "the Board of Control." (Id. ¶ 14). They collectively refer to the Elected School Board and its members as the "Elected School Board." (Id. ¶ 23). Plaintiffs allege that the School District acted through the Board of Control and the Elected School Board. (Id. ¶ 26). They then collectively refer to the School District, the Elected School Board and the Board of Control as the "School District Defendants," (id. ¶ 29), with the "School District Defendants" being principals and agents of each other. (Id. ¶ 30).
The complaint contains eight causes of action. One cause of action, Count VII, is a separate claim by Kohn against Mayor Thompson for allegedly violating his right to due process by publicly stigmatizing him in connection with his discharge. This count seeks only damages, consisting in part of loss of salary and injury to reputation.
The remaining seven causes of action are brought by all three plaintiffs against the "School District Defendants," meaning all the defendants, as defined in the complaint. Count I is a state-law claim for mandamus. Count II seeks a declaratory judgment, alleging that the terminations violated federal and state law. Count III is a federal civil-rights claim, asserting that the terminations violated Plaintiffs' federal right to due process because they received no notice or a hearing before the terminations. Count IV seeks a declaratory judgment, asserting that the statutory authority used to terminate Plaintiffs violates federal and state constitutional law guaranteeing due process and prohibiting the impairment of contracts. Count V is a state-law claim for breach of contract, asserting that the terminations violated Plaintiffs' contractual rights to termination only for good cause and to notice and a hearing before being terminated. Count VI is a state-law claim for promissary estoppel, based mainly on promises that termination would only be for good cause and only after notice and a hearing. Count VIII is a state-law claim for violation of the Public School Code and the Local Agency Law for termination without notice or a hearing.
Counts I and II seek the same relief: a declaration that the terminations of Plaintiffs' contracts were void and of no force or effect; an order removing the current administrators and reinstating Plaintiffs' employment; and compensatory damages, consisting in part of loss of salary. Counts III, V, VI and VIII seek only damages, consisting in part of loss of salary and injury to reputation. Count IV seeks the same relief as Counts I and II and also a declaration that the pertinent statutory section violates the federal and state constitutions.
A. Plaintiff Kohn Fails to State a Due Process Claim Against Mayor Thompson Because Her Remarks Did Not Stigmatize Him in Connection With His Discharge
We deal first with plaintiff Kohn's separate claim against Mayor Thompson. In Count VII, Kohn brings a federal due-process claim against the Mayor, alleging that she defamed him in connection with his discharge and that her defamatory remarks foreclosed other employment opportunities for him in the public schools. Specifically, he alleges that at the time the School District and Board of Control rescinded the plaintiffs' employment agreements, Mayor Thompson falsely stated that Kohn failed to perform his job and that keeping Kohn as superintendent would be a crime against the students of the Harrisburg School District. The Mayor also allegedly falsely stated to a television station: "He [Kohn] committed a crime by failing to educate our kids and now he's committing another crime by coming back and asking us to pay him for failed performance . . . ." (Am. Compl. ¶ 121). She made similar defamatory remarks to the news media.*fn4
"[R]eputation alone is not an interest protected by the due process clause" of the Fourteenth Amendment. Hill v. Borough of Kutztown, 455 F.3d 225, 236 (3d Cir. 2006)(quoted case and internal quotation marks omitted). Instead, the Due Process Clause . . . protects a liberty interest in reputation only when the plaintiff shows a "stigma" to reputation "plus deprivation of some additional right or interest." Id. Under this "stigma-plus" test, when a public employer "'creates and disseminates a false and defamatory impression about the employee in connection with his termination,'" due process applies and the employee is entitled to a "name-clearing ...