In a 5-2 split decision, the Iowa Supreme Court ruled on Friday that a District Court judge should determine whether Iowa Workers’ Compensation Commissioner Chris Godfrey can sue Governor Terry Branstad and five other administration officials individually for defamation, extortion and other claims. Follow me after the jump for background, links and details about the opinion.
Governor-elect Branstad asked Godfrey to resign in December 2010. The Workers’ Compensation Commissioner refused, on the grounds that he had been confirmed to a fixed term in office ending in 2015. (Most of the time, newly elected governors appoint new state agency heads, but certain key positions have fixed terms to reduce political influence on their work.)
During 2011, senior Branstad staffers tried to pressure Godfrey to resign. When Godfrey refused, the governor cut his salary by a third, to the lowest level legally possible. A few months later, Godfrey sued Branstad, Lieutenant Governor Kim Reynolds, the governor’s chief of staff Jeff Boeyink, the governor’s communications director Tim Albrecht, the governor’s legal counsel Brenna Findley, and Iowa Workforce Development Director Teresa Wahlert. The defamation claims stem from public statements questioning Godfrey’s competence in his job. The extortion claims stem from threats to cut his pay if he refused to resign. Godfrey has also alleged discrimination on the grounds that he is gay. He sued Branstad and the other officials both individually and in their official capacity. His attorney, Roxanne Conlin, filed suit against the individuals under the Iowa Tort Claims Act and filed a separate complaint against the State of Iowa.
Before a court could hear substantive claims in the lawsuit, Attorney General Tom Miller certified that Branstad, Reynolds, Boeyink, Albrecht, Findley, and Wahlert were acting within their official capacities when they made various statements to and about Godfrey and undertook actions relating to his job and salary.
The defense team (led by private attorney George LaMarca) moved to substitute the State of Iowa for the individuals named in Godfrey’s lawsuit. But the state can’t be sued for defamation or extortion, so when the District Court accepted Miller’s certification, the judge dismissed several counts in Godfrey’s lawsuit. The suit could proceed only on other claims, in particular that the State of Iowa discriminated against Godfrey, breached his contract, did not deal with him in good faith and unjustly profited from his work without proper compensation.
At that point Godfrey appealed, asking the Iowa Supreme Court to review the lower court ruling substituting the state for the individual defendants and dismissing some of the charges. The justices heard oral arguments in March. LaMarca argued that Branstad and the others were fulfilling their official duties, and that the plaintiff was trying to rewrite longstanding Iowa law. Conlin argued that a court should be able to review the attorney general’s certification, or else “this court would be reduced to petty functionaries of a self-interested executive.” You can listen to the oral arguments at Radio Iowa’s website and review briefs Conlin and LaMarca filed on behalf of their clients at the On Brief blog. Ryan Koopmans, who analyzes many Iowa Supreme Court rulings at that website, filed a “friend of the court” brief for the National Governors Association, supporting the Branstad administration’s position.
The Iowa Supreme Court announced its ruling on June 6. Justice David Wiggins wrote the majority opinion, joined by Chief Justice Mark Cady and Justices Brent Appel, Daryl Hecht, and Bruce Zager. Justices Thomas Waterman and Edward Mansfield wrote separate dissenting opinions agreeing with each other but elaborating on different aspects of the case. The split continues a pattern established over the past three years; Mansfield and Waterman almost always come down on the same side in non-unanimous decisions.
State law gives protection from lawsuits to employees acting in their official capacity and within the scope of their employment. The Iowa Attorney General certified that the defendants were acting in their official capacity. That ruling led a district court to rule that Godfrey could not sue Branstad and the others individually.
In an 18-page ruling, a majority of the judges on the Supreme Court ruled otherwise, saying the attorney general’s ruling could not be the final say on the claims made by Godfrey and sending the case back to a lower court to “allow the fact finder to decide whether the individual defendants’ actions were within the scope of their employment for these counts.”
Judge David Wiggins, writing for the majority, said the ruling “does not change the way the State has administered claims against state employees or open the floodgates for state employees to be sued individually and to pay the defense costs out of their own pockets when they commit a tort in the scope of their employment.” Instead, he wrote, it exists to ensure due process when there is a factual dispute over actions conducted in official and unofficial capacities.
Judges Edward Mansfield and Thomas Waterman dissented.
Waterman joined a 18-page dissent by Mansfield and authored his own six-page dissent.
“I predict the consequences of today’s decision will be to hamper job performance by state officials and to deter good people from public service,” Waterman wrote. “This will create a strong incentive for public officials to clam up and not participate in press conferences or allow media interviews. Is this what we want? Is it what the Legislature intended?”
The majority ruling gets into some complicated tort law issues. In an analytical section beginning on page 13, Justice Wiggins writes that “the attorney general’s certification can only apply to actions brought under the Iowa Tort Claims Act and not those brought against an employee acting outside the scope of employment.”
Applying these principles, we recognize Godfrey has argued his claims against the individual defendants in their individual capacities do not derive from actions that occurred within the scope of their employment. Thus, the attorney general’s certification does not apply to his claims against the individual defendants in their individual capacities. These claims against the individual defendants in their individual capacities must proceed outside the Iowa Tort Claims Act until such time the fact finder establishes that at the time of the alleged actions, the individual defendants were acting within the scope of their employment. Generally in a tort action, the fact finder decides whether an act is within the employee’s scope of employment.
Excerpt from pages 17 and 18 of the majority opinion:
When there is no factual dispute as to whether the employee was acting within the scope of his or her employment, the certification procedure relieves the employee of personal liability by substituting the State as the only defendant. However, when a factual dispute exists as to whether the state employee was acting within the scope of his or her employment, the court cannot substitute the State as the defendant until the court determines the employee acted within the scope of his or her employment. Otherwise, the attorney general could provide a certification when the employee was not acting within the scope of his or her employment and put the public fisc at risk when it has never previously been at risk.
In summary, where a question of fact exists as to whether a state employee’s actions were within the scope of his or her employment, the state employee is going to be defended, indemnified and held harmless from any damages and should not fear that his or her personal assets will be at risk, unless it is finally determined the employee was acting outside the scope of his or her employment. When a state employee acts outside the scope of his or her employment, the employee should be responsible for the attorney fees and the damages, not the public fisc.
For these reasons we hold the attorney general’s certification under Iowa Code section 669.5(2)(a) is not applicable to Godfrey’s claims that the individual defendants were acting outside the scope of their employment. In circumstances where the employee’s actions are not within the scope of their employment, the public fisc should not be used to pay for that employee’s defense or damages awarded a third party for that employee’s actions. The legislature has never authorized the expenditure of public funds to pay for the acts of its employees when done outside the scope of their employment. We are not going to do so today. Therefore, Godfrey may proceed on these claims against the defendants individually until such time it is determined the defendants were acting within the scope of their employment.
In his dissenting opinion, Justice Mansfield accused the majority of attacking a “straw man.”
No one disputes this broad proposition that the public should not pay for actions taken by state employees outside the scope of their employment, including the defense of lawsuits against those employees. The majority, in this regard, is attacking a straw man. The real issue we need to resolve is who decides the employee’s status.
As I’ve already explained, I believe a plaintiff has two alternatives. If the plaintiff elects to proceed under the [Iowa Tort Claims Act], then he or she authorizes the attorney general to decide whether the claims within that suit are in fact claims against a state employee in the scope of employment. Public funds will not pay for the defense of the employee unless the attorney general, an elected official answerable to the citizens of this State, makes this determination.
Alternatively, if the plaintiff wants to have a court decide whether the state employee acted within the scope of employment, he or she need only file a run-of-the-mill tort lawsuit against the employee. At that point, the employee must raise as a defense that he or she was acting within the scope of state employment. A court would decide whether the defense is valid.
In short, the ITCA contemplates a quick, early decision by either the attorney general or a court, depending on how the plaintiff chooses to bring his or her action. Either way, a third-party decision maker protects the public fisc. And the plaintiff, by choosing whether to proceed inside or outside the ITCA, gets to select that decision maker.
Waterman’s dissent (beginning on page 19 of this document) agrees with the points Mansfield raised and goes into more detail about the legislature’s intent in providing statutory immunities to government officials. Because majority ruling makes it more likely that state defendants will “remain personally entangled in costly litigation all the way through trial,” Waterman argues,
I predict the consequences of today’s decision will be to hamper job performance by state officials and to deter good people from public service. Why take a government job if your personal savings could be lost in a lawsuit? Why give a negative job performance evaluation of someone you supervise if he can sue you personally for defamation and take that case all the way to trial?
In this case, for example, the plaintiff has sued the Governor for making “false, defamatory statements to news organizations, including WHO-Radio and WHO-TV,” wherein the Governor “blamed Plaintiff for rising workers’ compensation costs for Iowa businesses.” Because it is important for public officials to communicate with the public, it has been the law for the last fifty years that defamation claims are not available against any public official who was acting in his or her official capacity. The attorney general, after independently reviewing the matter, found that the Governor was acting in his official capacity when he went on the radio and television to make these statements. The defamation claims were therefore dismissed, with the plaintiff being free to pursue his constitutional and discrimination claims. However, because the plaintiff included a bare allegation that the Governor was acting “individually and in his official capacity,” the majority now strips the attorney general of his authority, revives the plaintiff’s defamation claims, and puts the Governor in the position of having to defend them.
This will create a strong incentive for public officials to clam up and not participate in press conferences or allow media interviews. Is this what we want? Is it what the legislature intended? It should be noted that the decision in this case applies to all branches of government, including members of the general assembly. Allowing plaintiffs to sidestep the safeguards of the certification procedure will have a chilling effect on the willingness of state officials to answer questions about official actions or pending legislation. The price of the majority opinion will be less transparency and openness in our state government.
Speaking to the Des Moines Register’s Grant Rodgers, Conlin framed the case as being about about accountability and the rule of law:
In arguments before the court, Godfrey’s attorney, Roxanne Conlin, argued the certification process allowed the state to effectively shut down claims of wrongdoing without any due process. Critics of Godfrey’s lawsuit have argued that allowing it to move forward would open state workers up to an increased number of lawsuits.
Conlin praised the court’s decision, saying it ensures that plaintiffs can pursue damages against state workers, even Iowa’s top elected official, if they have claims. Conlin expects Godfrey’s case to go in front of a jury, she said.
“It’s important because nobody’s above the law,” she said. “That’s a bedrock principle of Iowa jurisprudence. Everybody is accountable for their own action and that includes the governor, the lieutenant governor and members of the staff who defame other people.”
Foley of the Associated Press summarized the implications of the ruling.
The 5-2 decision means that a lawsuit filed by Workers’ Compensation Commissioner Christopher Godfrey returns to a lower court for trial. It also sets a new standard that allows state officials to more easily be sued as individuals, which is expected to affect other pending lawsuits involving the Branstad administration. It means they – not taxpayers – will have to cover damages and attorneys’ fees if juries find that they broke the law and were acting outside the scope of their employment. […]
Branstad’s attorney, George LaMarca, said the decision created a new rule that ultimately won’t change the case’s outcome.
“We fully expect the trial judge will find – as the attorney general did – that the governor was acting within his official duties both when he did not pay the commissioner the highest salary allowed by law and also when he gave the public his reasons,” said LaMarca, who’s receiving $325 hourly in taxpayer-funded legal fees. […]
The ruling could affect fired Division of Criminal Investigation agent Larry Hedlund, who contends Branstad defamed him by falsely criticizing his performance at a news conference. Hedlund was removed from duty days after pursuing Branstad’s speeding SUV and complaining that troopers driving Branstad and Reynolds endangered public safety.
It could also affect Godfrey’s deputy, Joe Walsh, who alleges that Wahlert wrongfully terminated him as the chief judge for unemployment insurance appeals. Like Godfrey, Walsh contends the administration wanted to favor businesses in those cases.
I would not be surprised if LaMarca’s predictions holds true, and a lower court determines that Branstad and the others were acting in their official capacity when they spoke to the media about the Godfrey controversy. Then both sides would be back where they were before the Iowa Supreme Court ruled: Godfrey could pursue only some parts of his lawsuit against the State of Iowa.
I see how holding a press conference is part of a public official’s work. Boeyink and Findley will likewise claim that they were representing the governor as his chief of staff and legal counsel in conversations with Godfrey. Still, it doesn’t seem right to allow government officials to threaten to reduce Godfrey’s salary if he didn’t resign before the end of a fixed term, and then to lie about their reasons for targeting Godfrey in public statements. Although the governor has the power to set some officials’ salaries, using that power to pursue a political end seems wrong. I’m not an attorney, but I think case law supports the idea that government officials’ salaries are not supposed to be used as political leverage.
Any relevant comments are welcome in this thread.
P.S.- As of April 2014, legal fees paid by the state to LaMarca’s law firm for its work on this case had exceeded $525,000. Those are sure to grow substantially, now that the case is going back to district court. Any private employer would have settled this lawsuit long ago rather than spend more than a half-million dollars defending the decision to cut the employee’s pay by $37,000 per year. During this year’s legislative session, Iowa Senate Judiciary Committee Chair Rob Hogg proposed a bill to rein in what he called “excessive and grossly disproportionate” legal costs stemming from this case. However, that legislation did not advance.
P.P.S.- Conlin told Foley “that she plans to depose Branstad before the November election in which he’s seeking another four-year term.” Raise your hand if you’d like to be a fly on the wall during that deposition. Conlin was the Democratic nominee for governor in 1982, the year Iowans first elected Branstad.
UPDATE: Cityview’s Civic Skinny comments further on the insanity of not settling this lawsuit.
So suddenly, Branstad, Lt. Gov. Kim Reynolds, gubernatorial counsel Brenna Findley, former Branstad chief of staff Jeff Boeyink, former Branstad spokesman Tim Albrecht and Director of Iowa Workforce Development Teresa Wahlert again face charges individually as well as in their official capacities. And they must go through the entire trial – and all its costly pre-trial depositions and preparations – before they find out whether they or the state are paying the costs.
They are all defended by George LaMarca and his colleagues at LaMarca and Landry, who so far have collected $525,591.08 of taxpayer money, which is astonishing in itself. LaMarca’s job just got infinitely tougher and more complex. He now has to convince a jury that everything the six individuals did they did within their normal scope of duties. Some lawyers not involved in the case wonder how LaMarca can continue to represent the state and the individual defendants now that their interests could easily diverge.
Now that they might be on the hook for their actions – in terms of damages and legal fees – might not they want their own lawyers? What if, say, Wahlert says Boeyink ordered her to create “a hostile working environment” after Godfrey refused the governor’s demand to resign as Workers’ Compensation Commissioner before his fixed term was up? Or Boeyink says Findley told him to retaliate against Godfrey and cut his salary to the bare minimum of $73,500 from the $112,068.84 he had been making? Or Findley says Branstad told her to claim Godfrey was a poor worker? How does one firm argue all those positions?
But whether there’s one lawyer or seven, if the jury ultimately says the actions were not within the scope of their duties, those five people themselves will have to pay the lawyers – and any damages as well.
That’s why they should pressure the state to settle, lawyers and politicians tell Cityview. The state, not the individuals, would pay any settlement. That would include any legal fees – and surely Roxanne Conlin wouldn’t settle for any less than LaMarca has been paid – as well as damages sustained by Godfrey. It’s a fact that the Governor cut his salary, and Conlin could argue that the Branstad team messed with Godfrey’s head and sullied his reputation. A settlement probably would cost around $1 million.
Michael Gartner added that contrary to Justice Waterman’s dissent, the majority ruling shouldn’t “have a chilling effect on the willingness of state officials to answer questions about official actions or pending legislation” unless the officials are lying.