Alabama State University v. Danley, [Ms. 1140907, Apr. 8, 2016] __ So. 3d __ (Ala. 2016). Stacy Danley was fired as Athletic Director of ASU. He sued ASU; individual members of its Board of Trustees; John Knight, the Executive Vice President and Chief Operating Officer who recommended his termination; William Harris, who was interim President of ASU at the time; and Gwendolyn Boyd, subsequent President of ASU. Danley alleged that the manner in which the pre-termination hearing was conducted violated his due-process rights, that the ASU officials had violated his due-process rights by failing to provide a post-termination hearing, that only the Board of Trustees had the power to terminate his employment, and that ASU and the ASU officials had violated his due-process rights by withdrawing his pay from his bank account to cover allegedly unauthorized charges on a University-issued charge card. The circuit court held that he was not properly terminated and awarded damages against all defendants.

The Supreme Court holds that ASU and the ASU officials in their official capacities were immune under Section 14 of the Alabama Constitution. The Court holds that no exception to the non-liability of state officials applied. It distinguishes cases applying exceptions where a state employee has performed services and the only issue is how their pay is calculated, or where a contractor has performed services and the State has accepted those services. Because of his termination, Danley was not providing services, so he could not be awarded back pay against the officials in their official capacity. As to another exception allowing suits where the State agent has acted "fraudulently, in bad faith, beyond authority, or in a mistaken interpretation of law," this exception allows either injunctive relief against State officials in their official capacity or damages against them in their individual capacity, not damages against them in their official capacity.

Danley also sued Knight and Harris in their individual capacities. Danley argued that the "fraudulently, [etc.]" exception applied, but the Court holds that it does not apply where an action against an individual is in effect one against the State because it affects a contract or property right of the State or would result in the plaintiff's recovery of money from the State. Because he was seeking back pay, the award is effectively for breach of contract and is an award against the State. The Court notes that Danley might have filed a claim with the Board of Adjustment under § 41-9-62, Ala. Code 1975. As to a separate individual-capacity award based on their alleged wrongful withdrawal of money from his checking account, the Court analyzes under State-agent immunity and holds that because neither Knight nor Harris had personal involvement with that withdrawal (it was ordered by the Comptroller), they were entitled to State-agent immunity because they were sued only in their supervisory roles. "[T]he exercise of judgment in supervising personnel falls within the parameters of State-agent immunity."

Danley's complaint included a claim under 42 U.S.C. § 1983, as to which the ASU officials first asserted immunity derived from the Eleventh Amendment to the U.S. Constitution. Because the back-pay claim was effectively a claim against the State as the real, substantial party in interest, the Eleventh Amendment barred it. As to the wrongful-withdrawal claim against Knight and Harris in their individual capacities, they were entitled to qualified immunity, again because they acted only in a supervisory capacity. There was no evidence "that the supervisor either directly participated in the unconstitutional conduct or that a causal connection exists between the supervisor's actions and the alleged constitutional violation." There was neither "widespread abuse" nor "deliberate indifference to constitutional rights." The withdrawal by the Comptroller "was nothing more than the type of 'isolated occurrence' ... that is insufficient to hold a supervisor liable under a plaintiff's § 1983 claim."

By the above holdings, the Supreme Court reverses the awards of damages.

The circuit court also entered judgment for Danley on ASU's counterclaim seeking recoupment of unauthorized charges, and the Supreme Court affirms, holding that the judgment was not clearly erroneous, manifestly unjust, or against the great weight of the evidence.

On a cross-appeal from the denial of reinstatement, the Supreme Court affirms. Cases allowing reinstatement under § 1983 are for instances where employees had been wrongfully discharged because they had exercised their constitutional rights. Here, if anything, ASU terminated Danley in an improper manner, not for an improper reason or purpose. Only where an employee is discharged for constitutionally impermissible motives may he be reinstated "as a means of deterring his employer from future retaliatory firings." (Emphasis in original.) Danley had argued that he was discharged for exercising his First Amendment rights, but the trial court did not find in his favor on this ground, and Danley did not argue on appeal that the trial court erred in refusing to grant relief on his First Amendment retaliation claims.

Because the trial court awarded no injunctive relief under § 1983, and because the Supreme Court reverses his award of damages under that section, he was not a prevailing party for purposes of 42 U.S.C. § 1988 and is not entitled to an award of attorney fees or expenses.

On the main appeal, this is a plurality opinion by three Justices, with two Justices concurring specially, three Justices concurring in the result, and the Chief Justice concurring in part and dissenting in part. On the cross-appeal, it is a majority opinion. Justice Murdock's special concurrence does not disagree with the lead opinion, but suggests that, under the exceptions involving a failure of the State to pay under a contract, the action should not be deemed one that adversely affects a contract or property right of the State, because the funds, in essence, no longer belong to the State, but belong by right to the contracting party. He also notes that reinstatement is sometimes available for procedural due-process violations for a proper hearing to be conducted to determine whether, after such a hearing, termination was in order. "We are not presented here with an issue for decision in this regard." (Murdock, J., concurring specially.)

Related Documents: ASU v Danley 4-8-16

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