Engquist v. Oregon Department of Agriculture

This public-employee employment-law case arose in my home town, is being argued before the Court by a person I worked with for years on the US District Court Historical Society and cites an important law review article from the person who hired me to teach for four years at my alma mater, Willamette University College of Law. Its facts betray all the worst suspicions that some of us entertain about the "old boy" network in state government in my state, too. Perhaps it isn't bad for Oregon to air its dirty laundry like this before the world; it ought to lead to some humility...

But rather than hold forth here on the virtues of humility, I propose to bring you into the heart of this case. The Supreme Court decided to limit consideration of this case to one question (even though Engquist wanted two questions to be considered), and that one question relates to the applicability of the so-called "class-of-one" doctrine of equal protection to public employees. Now that is a mouthful, and it deserves a patient telling. Let's begin with some facts.

Relevant Facts

Ms. Anup Engquist, a native of India, worked as an international food standards specialist in the Oregon Department of Agriculture (DOA)'s Export Service Center ("ESC") from 1992-2002. Along the way she seemed to be singled out by the department's system analyst, Joseph Hyatt, for unfavorable comments. Hyatt also allegedly made false statements against Engquist and withheld important data from her. Enquist complained to her supervisor, another foreign-born female (Corristan), and she required Hyatt to attend diversity and anger-management classes.

Furious that he was required to do these things, Hyatt, upon return to the department, decided to collude with John Szczepanski, an Assistant Director of the ODA and supervisor of the ESC program. When the directorship of the ESC became vacant, Hyatt sent an email to Szczepanski detailing a plan that would get rid of both women and land Hyatt in the director chair of ESC. Szczepanski went along with the plan. Engquist applied with Hyatt for the ESC directorship; the latter got it, and then Engquist and Corristan were removed from the department.

I don't need to go through the details of the subsequent litigation. Both women were, you might understand, mad at their situation, and filed suit against the ODA and the guys on a number of grounds. Corristan was awarded more than $1 million at trial but since this case is only about Engquist, I focus on her. Her attorney brought claims under Title VII of the Civil Rights Act of 1964, a sec. 1981 claim, three constitutional claims (equal protection, procedural and substantive due process) and a state tort claim (intentional interference with contract). After an 11-day trial, a jury awarded Engquist a total of $425,000, but $75,000 of the award went to the State of Oregon (Oregon has a punitive damages statute that gives the state 60% of the punitivie damage amount awarded on a state claim). More specifically, her $425,000 was divided as follows: $175,000 in compensatory damages (not tied to any particular claims) and $250,000 in punitive damages, half of which was based on the state law tort claim and half of which on the equal protection claim. The court also awarded $172,740 in attorneys' fees as well as costs.

I don't think I want to break into a chorus of "Oregon My Oregon" at this point.

On Appeal and the Issue Before the Supreme Court

The Ninth Circuit panel (478 F3d 985 (2007)) really threw a wrench into the case. Over the prolix (as usual) dissenting voice of Judge Reinhardt, two judges decided that the constitutional claims were invalid as a matter of law, and that the case must be remanded to the district court to adjust Engquist's damages and attorneys' fees awards in the light of that holding. This might mean that, had she not appealed to the US Supreme Court, the only amount she would have gotten out of the case was the $125,000 in punitive damages (less the $75,000 of which the state claimed) and a portion, to be specified on remand, of the $175,000 in compensatory damages.

The central reason the 9th Circuit panel decided to shave the award, and the issue on which the Court granted cert., was the applicability of the Equal Protection Clause of the 14th Amendment to a so-called "class-of-one" in the public employment context. Now for the explanation.

The Equal Protection Clause Issue

The Equal Protection Clause, which ensures that 'all persons similarly situated should be treated alike,' has primary significance when you have several people in one class and one of those in the class has been sort of "singled-out" for poor treatment. The Supreme Court's 2000 Olech decision applied this clause to a "class-of-one" for the first time (Village of Willowbrook v. Olech, 528 US 562). In Olech, a municipality conditioned water service for a property on the plaintiff-owner's granting a 33-foot easement, even though it required only a 15-foot easement from every other property owner. In its per curiam decision, the Court allowed the plaintiff to proceed on the "class-of-one" theory, recognizing claims where "a plaintiff alleges that she has been intentionally treated differently from others similarly situated and that there is no rational basis for the difference in treatment." The Court stated that allegations of irrational and wholly arbitrary treatment, even without allegations of improper subjective motive, were sufficient to state a claim for relief under equal protection analysis.

Based on Olech, the 9th Circuit, as well as the other circuits, have applied class-of-one theory in the regulatory land-use context to forbid government actions that are arbitrary, irrational or malicious. The kind of analysis used by the court to review the actions of government regulators is known as "rational basis" scrutiny. Generally government actions are rational if they are tied to a legitimate government interest, but if they betray malicious, irrational or arbitrary action, they don't have a rational basis.

So far, so good. But the 9th Circuit panel chose not to extend this analysis into the sphere of government employment. The reason the 9th Circuit didn't do this was because they claimed there is a signficant difference between "government as regulator" and "government as employer"/"government as proprietor." As the majority in the panel explained, "government as employer" must be given wider latitude in its hiring and termination of people. When "government as regulator" is acting, however, it is often a powerful entity against a hopeless and, often, hapless, taxpayer. Thus, in this case, the panel decided that there were no federal constitutional routes available to Ms. Engquist.

Conclusion

In reaching this decision, the Ninth Circuit opposed nearly every other circuit which had looked at this question. In this regard, the decision is pretty arresting. Normally the US Supreme Court seems to have to "rein in" the 9th Circuit for being too "liberal," i.e., for granting too many rights to the "little guy." In this case, however, the 9th Circuit is depriving the "little girl" of rights that other circuits want to award. It would be ironic if the Supreme Court would reverse the 9th Circuit on this one but that is, I think, what will happen.

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