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Kramer v. Southern Oregon University

United States District Court, D. Oregon, Medford Division

December 1, 2014

RONALD H. KRAMER, Plaintiff,
v.
SOUTHERN OREGON UNIVERSITY, a public university, OREGON UNIVERSITY SYSTEM, a public university system, MARY CULLINAN, GEORGE PERNSTEINER, Defendants

For Ronald H. Kramer, Plaintiff: Richard S Yugler, LEAD ATTORNEY, Landye Bennett Blumstein, LLP, Portland, OR; Christine N. Moore, Bennett Hartman Morris & Kaplan LLP, Portland, OR.

For Southern Oregon University, Oregon University System, Mary Cullinan, George Pernsteiner, Defendants: Bruce A. Rubin, LEAD ATTORNEY, Naomi L. Levelle-Haslitt, Miller Nash, LLP, Portland, OR.

ORDER

OWEN M. PANNER, UNITED STATES DISTRICT JUDGE.

This matter comes before, me on Defendants' Motion for Partial Summary Judgment (#87), Plaintiff's Motion for Partial Summary Judgment (#91), and Defendants' Motion for Leave to File an Amended Answer (#84). Defendants' Motion for Partial Summary Judgment is GRANTED as to all claims except Plaintiff's due process claim for violation of a liberty interest. Plaintiff's Motion for Partial Summary Judgment is DENIED. Defendants' Motion for Leave to File an Amended Answer is MOOT, as to the proposed eighteenth affirmative defense and GRANTED as to all other proposed amendments.

Background

Plaintiff Ronald Kramer (" Kramer") was a longtime employee of Defendant Southern Oregon University (" SOU"). SOU is an public university based in Ashland, Oregon. During the relevant period of this case, SOU's President was Defendant Dr. Mary Cullinan (" Cullinan"). SOU is part of Defendant Oregon University System (" OUS"), a public entity comprised of the Oregon public universities. During the relevant period of this case, Defendant George Pernsteiner (" Pernsteiner") served as OUS Chancellor.

SOU runs a network of public radio station known as Jefferson Public Radio (" JPR"). SOU is assisted in its running of JPR by the Jefferson Public Radio Foundation (" JPRF"). SOU and JPRF share ownership and control of the stations, licenses, equipment, and facilities of the JPR network.

Kramer served as the Executive Director (" ED") of JPR. In that capacity, he was an employee of SOU. As part of the contractual arrangement between SOU and JPRF, the Executive Director of JPR also served as the Executive Director of JPRF. Accordingly, Kramer was ED of both organizations for a number of years. This dual role was incorporated into Kramer's job description at SOU.

In 2011, SOU President Cullinan became concerned about new projects being undertaken by JPRF, including the renovation of the Holly Theater in-Medford, Oregon (" the Medford Projects"). Cullinan expressed her concerns to OUS Chancellor Pernsteiner. In response to those concerns, Pernsteiner directed the Internal Audit Division of OUS to perform an Asset & Liability Review of JPR beginning in March 2011.

After conducting the Asset & Liability Review, the Internal Audit Division issued an Internal Audit Report on September 22, 2011 (" the OUS Report"). The OUS Report concluded that JPRF's Medford Projects " may not align with policy interests of SOU and may, in fact, harm SOU by limiting the fundraising ability of the SOU Foundation related to their own fundraising priorities." Rubin Decl. Ex 1, at 10. The OUS Report also concluded that having a single individual serving as the ED of both JPR and JPRF represented a structural problem in the relationship between SOU and JPRF, resulting in " recurring actual or apparent conflicts of interest." Id. at 11. The OUS Report recommended that SOU eliminate the conflict of interest by not allowing Kramer to serve as ED of both organizations. Id. Cullinan accepted the recommendations in the OUS Report and commissioned a task force to resolve the issues identified in the OUS Report. In early 2012, Kramer came to believe that he was going to be terminated as a consequence of the OUS Report. On March 21, 2012, Kramer filed a grievance with SOU. The SOU grievance committee rejected Kramer's complaint on the basis that there had been no grievable employment action. In the meantime, Kramer remained in his position as ED of both JPR and JPRF.

On March 16, 2012, Kramer prepared and distributed a series of proposed resolutions for the JRPF Board which would have fundamentally altered JPRF's relationship with SOU. The JPRF Board was scheduled to consider and vote on those resolutions at a meeting on March 22, 2012. As SOU President, Cullinan also received a copy of the proposed resolutions.

SOU and OUS viewed the proposed resolutions as detrimental to SOU and retained the Miller Nash law firm to prevent the proposed resolutions from being adopted. On March 22, 2012, counsel from Miller Nash prepared a letter addressed to JPRF counsel Jerry Jacobson (" the Miller Nash Letter"). The Miller Nash Letter set forth SOU's opposition to the proposed-resolutions and advised that SOU would proceed with litigation if the resolutions were adopted. Rubin Decl. Ex 1, at 2. The threat of litigation included claims against JPRF, the JPRF Board members personally, and Kramer in particular. Id. at 3-5. Claims against Kramer were to include breaches of fiduciary duties to SOU, interference with contract, impermissible direct and indirect conflicts of interest without the required disclosures, and violations of the standards of conduct for officers of nonprofit corporations. Id. at 4-5. The Miller Nash Letter also notes that Kramer and the JPRF Board may be denied indemnity by JPRF's insurance company if it is found that their actions were taken in bad faith or through willful misconduct. Id. at 5-6. Jacobson was asked to provide copies of the Miller Nash Letter to the JPRF Board in advance of the March 22 meeting.

The JPRF Board met as scheduled on March 22, 2012. Members of the local media attended the open session. Cullinan gave a speech urging the board to reject the resolutions and consider mediation. Moore Decl. Ex. 7. Cullinan referred to the Miller Nash Letter, although she did not go into detail about the contents of the letter. Id. The JPRF Board went into executive session, during which it rejected the proposed resolutions.

On March 23, 2012, Cullinan sent Kramer a letter informing him that his appointment as ED of JPR " may not be renewed for the upcoming 2012-2013 fiscal year, " and that " [a]s a result, your employment with Southern Oregon University may terminate on June 30, 2012." Moore Decl. Ex. 9.

The dispute between SOU and JPRF was covered in local newspapers and generated considerable interest. On June 8 and 9, 2012, SOU and JPRF engaged in mediation, to which Kramer was not a party, and reached an agreement, subject to the to approval by the JPRF Board (" the Lukens Agreement"). After considering the matter, the JPRF Board rejected the Lukens Agreement.

On June 13, 2012, SOU adopted an amendment to its personnel policies. The new policy permitted SOU to terminate administrative appointments without cause at any time during the appointment by providing the employee with ninety days notice prior to termination. Stephens Decl. Ex. 1.

On June 25, 2012, Kramer received a letter from Cullinan informing him that his employment was terminated effective June 30. Stephens Decl. Ex. 8. Kramer performed no work for SOU after June 25, 2012. On or about June 30, 2012, Kramer also stepped down from his position as ED of JPRF. Moore Decl. Ex 11, at 15.

On July 2, 2012, Kramer submitted a written grievance to SOU. Kramer grieved the sufficiency of his notice of termination and the allegations contained in the OUS Report and the Miller Nash Letter. Kramer also alleged that he had been terminated in retaliation for his earlier grievance. Stephens Decl. Ex. 9, at 2.

On August 17, 2012, the SOU Grievance Committee issued its findings. The Grievance Committee determined that Kramer did not receive proper notice of non-renewal until June 25, 2012, because the March 23 letter used conditional language. The Grievance Committee determined that Kramer had not been terminated for a retaliatory reason. The Grievance Committee also determined that, although the OUS Report and Miller Nash Letter were public documents, they were not placed in Kramer's personnel file and that disclosure would not violate SOU policy. Stephens Decl. Ex. 9. The Grievance Committee concluded Kramer was entitled to ninety days of pay and benefits beginning on June 25, 2012.

Following a " cooling off" period after the failure of the Lukens Agreement, SOU and JPRF engaged in a second round of mediation on August 21 and 22, 2012, conducted by a new mediator, Susan Hammer. At the conclusion of the second round of mediation, SOU and JPRF entered into a binding settlement agreement (" the Hammer Agreement"). One of the terms of the Hammer Agreement was that " Ron Kramer may serve as a volunteer consultant or independent contractor consultant to [JPRF] or its affiliates but is not eligible to be an officer, director, advisory board member, or employee of [JPRF] or its affiliates." Moore Decl. Ex. 17., at 1. As part of the Hammer Agreement, SOU and JPRF extended their contract for exchange of services without modification. JPR employee Paul Westehelle was appointed to serve as the interim ED of both JPR and JPRF in the same dual capacity previously occupied by Kramer.

On September 11, 2012, Cullinan accepted the SOU Grievance Committee's determination and Kramer received the recommended ninety days of pay and benefits in a lump sum on October 22, 2012. Kramer then filed this action.

Legal Standard

I. Summary Judgment

Summary judgment is appropriate " if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). Whether or not a fact is material is determined by the substantive law on the issue. T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987). There is a genuine dispute if the evidence is such that a reasonable jury would return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The moving party has the burden of establishing the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

Special rules of construction apply to evaluating summary judgment motions: (1) all reasonable doubts as to the existence of genuine issues of material facts should be resolved against the moving party; and (2) all inferences must be drawn in the light most favorable to the nonmoving party. T.W. Elec., 809 F.2d at 630-31,

II. Qualified Immunity

Qualified immunity protects government officials from " liability for civil damages insofar as their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known." Harlow v. Fitzgerald, 457 U.S. 800, 818, 102 S.Ct. 2727, 73 L.Ed.2d 396 (1982). Defendants are entitled to qualified immunity where they " reasonably could have believed that their conduct was lawful 'in light of clearly established law and the information [that they] possessed.'" Cohen v. San Bernardino Valley Coll., 92 F.3d 968, 973 (9th Cir. 1996)(quoting Baker v. Racansky, 887 F.2d 183, 187 (9th Cir. 1989)).

The Supreme Court has established a two-part analysis for determining whether qualified immunity is appropriate in a suit against an official for an alleged violation of a constitutional right. Saucier v. Katz, 533 U.S. 194, 201, 121 S.Ct. 2151, 150 L.Ed.2d 272 (2001). The court must determine whether the official violated the plaintiff's constitutional rights on the facts, alleged and whether the constitutional rights were clearly established. Id. The Supreme Court has since explained that a ...


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