Hannon v. Turnage

Page 653

892 F.2d 653

58 USLW 2427

Donald W. HANNON, M.D., Plaintiff-Appellee, v. Thomas K. TURNAGE, Administrator of the Veterans Administration, and John Gronvall, Chief Medical Director of the Veterans Administration Defendants-Appellants.

No. 88-2130.

United States Court of Appeals Seventh Circuit.

Argued Sept. 11, 1989.

Decided Jan. 4, 1990.

Rehearing and Rehearing En Banc Denied Feb. 13, 1990.

Mary A. Sedey, Patricia L. Cohen, St. Louis, Mo., Bruce Goldstein, Edwardsville, Ill., for plaintiff-appellee, Hannon.

Frederick J. Hess, U.S. Atty., Robert L. Simpkins, Asst. U.S. Atty., Office of U.S. Atty., East St. Louis, Ill., Barbara L. Herwig, and Peter R. Maier, Dept. of Justice, Civ.Div., Appellate Section, Washington, D.C., for defendant-appellants.

Before BAUER, Chief Judge, WOOD, Jr. and FLAUM, Circuit Judges.

HARLINGTON WOOD, Jr., Circuit Judge.

Dr. Donald W. Hannon brought this action challenging the termination of his employment as chief of surgery at the Veterans Administration Medical Center ("VAMC") in Marion, Illinois. Dr. Hannon contends that Thomas K. Turnage, administrator of the Veterans Administration ("VA"), and Dr. John Gronvall, chief medical director of the VA, deprived him of liberty and property without due process of law when they discharged him from his position.

Turnage and Gronvall moved for summary judgment on the grounds of qualified immunity. The district court had jurisdiction over Dr. Hannon's claim under 28 U.S.C. § 1331. We have jurisdiction to hear this interlocutory appeal of a denial of qualified immunity on a motion for summary judgment under the principles of 28 U.S.C. § 1291 and Mitchell v. Forsyth, 472 U.S. 511, 105 S.Ct. 2806, 86 L.Ed.2d 411 (1985). The district court denied Turnage and Gronvall's motion, and they now appeal. For the reasons stated below, we reverse.

I. FACTUAL BACKGROUND

In 1979, Dr. Hannon applied for an appointment as a staff surgeon at the VA hospital in Grand Junction, Colorado. At that time, federal statute and VA regulations required all VA physicians to have full, unrestricted state licenses. See 38 U.S.C. § 4105(a)(1); DM & S Supplement to VA Manual MP-5, pt. II, p 2.04(h)(1). When Dr. Hannon applied for the staff surgeon position, he did not have an unrestricted license. Although Dr. Hannon had previously possessed unrestricted licenses in the states of California, Washington, and Minnesota, disciplinary action had revoked, suspended, or inactivated all of these licenses. It was not until 1986 that Dr. Hannon once again received a full, unrestricted license from the state of Minnesota.

Dr. Hannon's VA application specifically asked if he ever had a license to practice revoked or suspended. Dr. Hannon left the response to this question blank. Nowhere on the application did Dr. Hannon disclose the state disciplinary proceedings. The application forms required Dr. Hannon to certify that his answers were true and complete to the best of his knowledge and belief.

The VA subsequently appointed Dr. Hannon to a position as staff surgeon at the VA hospital in Grand Junction, Colorado. The VA later transferred him to facilities in Michigan, Texas, and Illinois. In 1983, the VA promoted Dr. Hannon to chief of surgical service at the VAMC in Marion, Illinois.

Prompted by charges of incompetent doctors in VA hospitals, the VA's Office of Inspector General began a 1986 nationwide audit of the licensure status of all VA doctors. The audit intended to trace all disciplinary actions involving VA doctors. As a result of the audit, the VA's Central Office made inquiries into Dr. Hannon's licensing history. The above facts were provided to the VA's general counsel who advised that the VA's own regulations required Dr. Hannon's discharge because Dr. Hannon failed to meet the appropriate qualifications at the time of appointment. Thus, on June 23, 1986, Dr. Hannon's supervisor informed him that he was terminated effective that same day. Dr. Hannon was not provided with prior written notice of the discharge decision, written reasons for his termination, any kind of a hearing, or a chance to respond to the charges against him. The director of the VAMC stated to the media only that Dr. Hannon was no longer employed there and that the media would have to obtain further information from Dr. Hannon directly.

Almost four months after Dr. Hannon's discharge, the VA released the Report of the Audit of the Inspector General. This document published the results of the audit that eventually led to Dr. Hannon's termination. The report did not mention any doctor by name or even identify geographic regions. Based on the report, the news media published stories that sixty percent of the VA doctors with licensing problems were disciplined for drug abuse or laxity in drug prescription and that twenty-four VA doctors had their licenses suspended or revoked chiefly for drug-related misconduct.

In February 1987, Dr. Hannon tried to obtain $30,000 in retirement funds. The Office of Personnel Management turned down this request after learning from the VA the reason for Dr. Hannon's termination.

Dr. Hannon then brought this suit, alleging that the defendants deprived him of property and liberty interests without due process in violation of the fifth amendment. See Bivens v. Six Unknown Named Agents of Fed. Bureau of Narcotics, 403 U.S. 388, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971). The defendants moved for summary judgment on the basis of qualified immunity, and the district court denied this motion. The district court reasoned that Dr. Hannon was a nonprobationary employee. Considering Cleveland Board of Education v. Loudermill, 470 U.S. 532, 105 S.Ct. 1487, 84 L.Ed.2d 494 (1985) dispositive, the district court rejected the defendants' argument that a person "who is illegally appointed by dishonestly filling out an employment application has no property right." In addition, the district court found that the VA's limited dissemination of the circumstances surrounding Dr. Hannon's dismissal implicated his liberty interests. Because the defendants moved for summary judgment on the basis of qualified immunity, the trial court did not consider whether Dr. Hannon had pleaded any statutory causes of action. ¹

II. DISCUSSION

The defendants contend that they did not violate any of Dr. Hannon's clearly established rights and are thereby entitled to qualified immunity. The defendants alternatively argue that they took no personal action that could have exposed them to liability. Because we agree that the defendants did not violate any of Dr. Hannon's clearly established rights, we do not reach the other issue.

A. General Principles

The doctrine of qualified immunity shields government officials from litigation for discretionary functions. See Klein v. Ryan, 847 F.2d 368, 371 (7th Cir.1988); see also Harlow v. Fitzgerald, 457 U.S. 800, 818, 102 S.Ct. 2727, 2738, 73 L.Ed.2d 396 (1982). Officials cannot receive qualified immunity if their conduct violates clearly established constitutional rights, such that "a reasonable official would understand that what he is doing violates that right." Anderson v. Creighton, 483 U.S. 635, 107 S.Ct. 3034, 3039, 97 L.Ed.2d 523 (1987); see also Harlow, 457 U.S. at 818, 102 S.Ct. at 2738; Conner v. Reinhard, 847 F.2d 384, 387-88 (7th Cir.), cert. denied, --- U.S. ----, 109 S.Ct. 147, 102 L.Ed.2d 118 (1988). One recent commentator has suggested that the law is unclear and the burden should be on the defendant to establish the lack of a clearly established right. See Kinports, Qualified Immunity in Section 1983 Cases: The Unanswered Questions, 23 Ga.L.Rev. 597, 634-42 (1989). Since the Supreme Court's decision in Davis v. Scherer, 468 U.S. 183, 197, 104 S.Ct. 3012, 3021, 82 L.Ed.2d 139 (1984), the law in this circuit has been well settled that the plaintiff bears the burden of proving a clearly established right. See, e.g., Lenea v. Lane, 882 F.2d 1171, 1177 (7th Cir.1989); Alvarado v. Picur, 859 F.2d 448, 452 (7th Cir.1988); Rakovich v. Wade, 850 F.2d 1180, 1209 (7th Cir.), cert. denied, --- U.S. ---- 109 S.Ct. 497, 102 L.Ed.2d 534 (1988); Klein, 847 F.2d at 371; Conner, 847 F.2d at 388; Abel v. Miller, 824 F.2d 1522, 1534 (7th Cir.1987); Kompare v. Stein, 801 F.2d 883, 892 (7th Cir.1986); LeClair v. Hart, 800 F.2d 692, 696 (7th Cir.1986).

Summary judgment is proper only when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). When we review the denial of a motion for summary judgment on the basis of qualified immunity, our inquiry is limited solely to the issue of whether the law was well established at the time of the relevant conduct. Mitchell v. Forsyth, 472 U.S. 511, 528, 105 S.Ct. 2806, 2816, 86 L.Ed.2d 411 (1985); Conner, 847 F.2d at 388; Klein, 847 F.2d at 371.

B. Property Interest

Dr. Hannon has not proved the existence of any property right that the defendants might have violated, let alone proved the existence of a clearly established right.

For Dr. Hannon to defeat the defendants' claim of qualified immunity, he must show that he had a clearly established property interest in continued employment with the VA. See Board of Regents v. Roth, 408 U.S. 564, 569, 92 S.Ct. 2701, 2705, 33 L.Ed.2d 548 (1972) (requirements of procedural due process only encompass the Constitution's protection of life, liberty, and property). When the government gives its employees assurances of continued employment a property interest arises. See R. Rotunda, J. Nowak & J. Young, Treatise on Constitutional Law: Substance and Procedure § 17.5(d) (1986). The government usually manifests these assurances by laws and regulations. Thus, property interests are generally created and defined by laws and regulations, see Roth, 408 U.S. at 577, 92 S.Ct. at 2709, but can also arise through principles of contract law, see Vail v. Board of Educ., 706 F.2d 1435, 1437 (7th Cir.1983), aff'...