*3 violations, legal problems also KELLY, related to the HENRY, Before SETH and trading, Bank’s securities the mismatch be- Judges. Circuit tween its interest rate sensitive liabilities and KELLY, Jr., PAUL Judge. Circuit assets, and its excessive loan documentation problems. Defendants-appellants cross-appellees and Roger Dewey W. appeal and Sue E. Mecca On June the Federal Reserve and $60,000 entry from the judgment against of a the Bank’s board entered into a Written in Plaintiff-appellee them cross-appellant Agreement and requiring the Bank to take a Gene F. deprivation Lenz’s civil action for series of remedial actions. On October employment process without due of law un- both state regulators and federal exam- § They der U.S.C. contend that compliance ined the Bank’s with the Written district court denying qualified Agreement erred im- and concluded that it was defi- 50(a) munity, denying followed, their Rule motion for cient. the months that the Bank judgment grounds as a matter of law on the warnings stating received number of that the Plaintiff had comply Agree- failure to with the Written interest his might subject con- ment imposi- directors to the did, tending that if even he monetary penalties. Defendants’ con- tion of civil April On deprive duct did not Mr. Lenz of that inter- regulators the state and federal held est, jury giving an erroneous instruc- with the Bank’s board of directors. Again, request warned that the Bank them no choice to Mr. Lenz’s compliance Lenz, was not with the Written resignation. According to Mr. Mr. Agreement, poten- Dewey effectively each board member was and Ms. Mecca removed tially $370,000 up liable for under 12 affording him from without him 1818(i)(2), did not find Mr. U.S.C. hearing, thereby violating process un- capable complying Lenz with the Constitution, Written Wyo- der the United States Agreement. Constitution, ming Wyo.Stat. § 13—3— 104(d). meeting, Roger Dewey,
At this W. director Wyoming Department of Audit and trial, Before Defendants moved for sum- Examiner, acting State E. Sue mary judgment on the affirmative defense of *4 manager Banking then Division of the qualified immunity. The district court de- Audit, Wyoming Department presented of motion, parties proceeded nied the (“Letter”) proposed Understanding Letter of advisory jury. jury trial before an The found Essentially, to the board. the Letter tracked Dewey deprived that Mr. and Ms. Mecca had requirements Agreement of the Written property Lenz of Mr. his interest as an offi- imposed requirements, additional mak- holding cer and director of the Bank’s com- ing any significant it noncompli- clear that pany affording process without him due of ance would in an result order to remove Mr. $60,000. law and him awarded The district Wyo.Stat. § Lenz from office under 13-3- incorporated judg- court this in decision its 104(a) (1977). ment. Thereafter, the board members convened they if concluded that did not seek Mr. Discussion removal, they Lenz’s could be hable for the Dewey Mr. and Ms. Mecca contend monetary penalties. Dewey Mr. confirmed holding that the district court erred in that implemented that the Letter need not if be they by qualified were not immunity shielded relationship the Bank terminated its with summary judgment. on Because the court’s Mr. Lenz. The board advised Mr. Lenz that qualified immunity denial of their defense they purchase would his bank stock if he law, solely turned on issues of error has been resigned, resign, if he refused to it would preserved appeal. for Wilson v. Union Pac. him purchasing fire without the stock. Mr. Co., (10th 1226, Cir.1995) R.R. 56 F.3d 1229 negotiations Lenz and the board entered that (summary judgment legal may on issues be through May lasted and most of June. On 50(a) appealed despite lack of Fed.R.Civ.P. 21, 1991, resigned June Mr. Lenz from his motion); Co., Ruyle v. Continental Oil 44 president “terminable at will” (10th 837, Cir.1994) (same), F.3d 841-42 cert. director of the in accordance with a — — denied, —, 272, U.S. 116 S.Ct. of Severance Purchase Connection/Stock L.Ed.2d — (1995). pres We review “the
Agreement.
exchange
resignation,
for his
qualified immunity
ence or absence of
... de
$230,000
Mr. Lenz received
in cash and notes
Langley
County,
novo.”
v. Adams
987 F.2d
in
Capital Corporation,
his stock Banker’s
(10th Cir.1993).
1473, 1476
plus additional consideration in the form of
pay
personal
severance
property.
qualified
Once a defendant asserts
The
appeal
immunity,
issues before us on
stem from
plaintiff
bears the
burden
brought
1983 action Mr.
against
proving
Lenz
that
the defendants
violated
law
Dewey
Mr.
and Ms. Mecca. Mr.
clearly
Lenz al-
that was
established. Patrick v. Mil
leged
ler,
(10th Cir.1992).
deprived
1240,
that the Defendants
him of
953 F.2d
1243
employment
process
without
plaintiff
particularized
of law and
showing,
must make a
adversely
ability
affected his
demonstrating
to obtain suit-
that the contours of the violat
banking
able
in
industry
right
ed
were so established that “a reason
right
future. The essence of his civil
able official would understand that what he
Dewey
claim was that
doing
Mr.
and Ms. Mecca
right,”
[wa]s
that
violate[d]
Anderson
635,
Creighton,
640,
threatened each of the Bank’s board of di- v.
483 U.S.
107 S.Ct.
monetary
3034, 3039,
rectors with civil
penalties
(1987),
and left
The district court
of
employment.” Russillo,
future
the
935
that
Defendants were
F.2d at
not entitled to
any
is no
qualified immunity
There
evidence of
indepen
because they were on no
law,
dent source—either
tice of
see
right
hearing
Mr. Lenz’s
to
a
under
Hatfield
13-3-104(d).
(10th
Wyo.Stat.
County,
Converse
52
F.3d
863
We conclude that
Cir.1995),
policy
or an internal
the district
by denying
court erred
Defen
—that
endows Mr.
protected
Lenz with a
qualified immunity
property
dants’
defense based on
13-3-104(d)
interest
in
employment.
his at-will
this statute.
explicitly
Section
provides
opportunity
the
hearing
for
in
a
held,
The district court
on the other
conjunction with an order that
pur
is issued
hand, that Mr. Lenz
did have a
suant to the statute. Defendants never is
property interest in his stock ownership and
order,
sued such an
and therefore the hear
directorship
holding
of the Bank’s
company.
ing requirement
13-3-104(d)
Wyo.Stat.
under
true,
may
While this
be
see
F.D.I.C. Mol
play.
never came into
ten,
230, 240,
1780, 1787,
486 U.S.
Dewey
All that Mr.
and Ms. Mecca did was
(1988),
Mr. Lenz also asserts that signing board, he was holding company from the Mr. deprived protected property of a interest in relinquished any property Lenz interest he his in violation of might state and fed deprived have had and was of due rights process. eral constitutional process by to due the Defendants. Parker v. Board context, the Supreme (10th Regents, “the Court 981 F.2d Cir. of 1992). has defined legiti- a interest as the directors and offering apparently was that an lators have held We Plaintiff, officers, were not re- especially the resignation and between employee a choice of sponding to the results of examinations employee’s an not violate termination does errors, there specific the and also the law, resignation long as the process of policies important as to adequate were to assess the “voluntary.” Id. In order is regu- Finally, the aspects operations. resignation, employee’s an voluntariness lators, Bank of both the Federal Reserve (1) employee the whether must consider we regulators, (2) City Wyoming the Kansas resignation, to given was an alternative herein, decided to hold the Defendants nature employee understood whether the (3) April with the directors of the meeting on whether the given, was of the choice he Lusk, in Bank to be held not Lusk State time in given was reasonable employee Cheyenne. (4) choose, employ whether to which resigna the effective date ee could select Meeting April given a choice of Mr. Lenz was tion. Id. without, payment or resignation with stock mentioned, arranged As compre that he did not is no evidence there who regulators, decided choice, and Mr. Lenz the board hend his attending were Mr. should attend. Those Agree negotiated the terms of his Severance City Kansas Federal Reserve McBride of the month-and-a-half, and he chose ment for a and Mr. Yorke from the Denver Federal con resign 1991. We therefore on June City ladyA Kansas Fed- Reserve. from the voluntarily. resigned clude that Mr. Lenz presentation of made a detailed eral Reserve immunity acts to bar Consequently, qualified Bank’s last examina- the defects shown Defendants, id., and against the this action Wyoming from the tions. The Defendants regarding parties raise other issues the were, course, regulatory agency there. *6 longer relevant. the trial are no there, Lusk Bank directors were The State absent; present as with one the Plaintiff was REVERSED. Bank; the president and a director of attorney and the Bank CPA. were the Bank SETH, dissenting. Judge, Circuit Chey- from Lusk to All had been summoned major- from the respectfully I must dissent enne. ity opinion herein. introduced, any expla- without There were view, my description of one a why they meeting, nation as to were at the regulators Wyoming and federal between the Wyoming Department of two officers of the Bank, with the of the Lusk State directors was, however, Investigation. There Criminal background, together with a little demon- during meeting a of criminal the discussion majority. why agree I the strates cannot Bank penalties that the directors of the City, of Kansas The Federal Reserve Bank might be liable for. by of its examinations of the Lusk reason presentation Defendant in her at problems re- therein State meeting, the advised the directors that each
vealed,
Agreement” be-
required a “Written
$370,000
penal-
one could be liable for a
civil
Bank to
tween the Federal Reserve and the
ty
past
to conform to
for bank failure
the
specific problems, with corrective ac-
cover
regulations. For Defendant Mecca’s testi-
opinion
required.
tion
The
of the federal mony
sought
single
a
the Defendants
out
management
regulators was that
the
past
regulation
which could
violation of
errors,
many
the
viola-
could not correct the
the
authorities to assess a civil
cause
federal
regulations.
Agreement
The
dated
tions of
money penalty
largest daily
rate.
the
signed for the Bank.
June
1990 was
quantified
presentation
in her
at the
This she
$370,000against
meeting.
This was the
each
regulators also involved
examina-
State
'
regu-
Defendant Mecca testified at trial
concerned over violations of
director.
tions were
lations,
authority
Wyoming
expressed
that there was no
under
but no serious concern was
penalty.
Thus she was
financial condition of the
law to assess such
'-over the immediate
only
using penalty which could
be assessed
problem
regu-
The
to the state
Bank.
basic
in the. board
directors’ re-
will result
There was
regulators.
by the federal
President,
moval of
Director
CEO
any
action
such
in the record
indication
and his mem-
Gene F. Lenz from office
contemplated by the federal
way
any
inwas
bership on the Bank’s board of di-
au-
new
although
had some
added.)
(Emphasis
rectors.”
also mentioned
Mrs. Mecca
thority to do so.
to
of the Letter
referred
The sections
in her state-
penalties
possible criminal
the
plans
general basic
above contained
of the
meeting. The officers
at the
ments
require-
specific
policy matters as well as
Investiga-
of Criminal
Wyoming Department
refer-
There were two or three
ments.
mentioned.
present, as
tion were
money penalties. One states
ences to civil
given
president was
Plaintiff as Bank
The
agreements can
that violations of written
respond to the extended
minutes to
fifteen
penalties.
civil
Others con-
lead to federal
regulators’ presentations.
federal and
specific restrictions/changes in lend-
tained
regulators had
meeting the initial
After
ing practices, depreciation and renewal
meeting with the di-
separate
another
days
comply.
had
to
loans. The Bank
however,
rectors;
permitted
Plaintiff was
by
solely
Compliance was to be monitored
Bank director.
although he was a
to attend
Examiner.
the State
Letter,
bring
ap-
presumably,
was
was to
meeting itself included what
thorough
important,
about
basic and
the Bank’s
good presentation of
parently a
doing
changes in
method of
the Bank’s
City
lady from the Kansas
problems
signed by all di-
business.
It was to be
Reserve,
many problems
were
Federal
pro-
Noncompliance as to several
rectors.
However,
very
thereafter
seri-
so described.
require
to fire
would
the directors
visions
by the state
implications of the actions
ous
Plaintiff, as mentioned.
Defendants,
apparent.
are
regulators,
needed
This discussion of “the Letter”
These were:
put in
context
as it must be
some detail
“threat,” and it must be so de-
Their
meeting. The
the other “events” at the
$370,000.00
scribed,
civil
possible
very
Wyoming
important
to the
Letter
past
in the
penalty for one violation
regulators. They apparently had consulted
obviously intended to
director was
each
Attorney
It was
Wyoming
General.
with the
the Board
accomplish the removal
presumably
complete
carefully prepared
It
been mentioned before
Plaintiff.
had
“compliance.” The
bring
Bank into
*7
possible civil
times that there were
several
Letter sub-
so indicated. This
Defendants
first time
money penalties, but this was the
timed
meeting built on and was
mitted at the
quantified for one violation
had been
as the
of dollars as well
the “threats”
with
impact
significant
had to be
the
and the
consequences
criminal
mention of
very least.
Wyo-
of the
of the two officers
attendance
Also,
bring
general
matter of
up
Investigation
ming Department of Criminal
another
penalties at that time was
criminal
meeting.
at the
present
by having then
threat orchestrated
However,
change came
great and
sudden
Wyoming Depart-
officers of the
the two
significance of
and the
about as to the Letter
Investigation.
ment of Criminal
shortly
meeting. This was demonstrated
meeting”
significant event at “the
Another
by
of the
the statement
after the
request by the
presentation of and
was the
really
not
did
the Board
Defendants
sign, in
directors
that all the
Defendants
at all if it fired
sign
have to
the Letter
course,
of four or five
a document
surprising and funda-
And for this
Plaintiff.
Understanding” be-
pages
“Letter of
titled
phone
call to
change all it took was
mental
Wyoming
Banking
Division of
tween the
purpose
recited
Mecca. Thus the
Defendant
Lusk
Bank. This contained
State
the Letter
provisions of
and the detailed
requirements:
detailed
disap-
significance and all
really of no
were
if the
requirement was that
The first
it all was to
only purpose
of
peared.
comply
purpose
with Sections
“Bank” did not
fire Plaintiff. This
have the Board
16a,
way,
improper
in
through
accomplished
of the
an
through
and 13
was so
and,
view,
Plaintiffs
Examiner,
my
in violation of
in
Letter,
by the
“as determined
rights.
statutory
president.
constitutional
The state
Cleveland Board
Edu-
of
procedure
Loudermill,
clear for
of
is
authorized removal
cation v.
470 U.S.
105 S.Ct.
(1985).
a bank officer.
It must be mentioned that
1487,
Other Issues about Plaintiffs removal. description Cheyenne The above meeting April and the Letter with its Again, agree majority I cannot with the demise, is sufficient to decide several basic opinion, and would reverse on the basic is- issues. Thus it demonstrates that the Defen- sues discussed above and remand for a new qualified dants were not entitled to immuni- provision trial within the of this dissent. ty. beyond Wyoming Their actions went far relating Statute Section 13-3-104 to the re-
moval of bank officers. The Defendants ac-
knowledged they were familiar with the stat-
ute. description
The same also constitutes an
adequate party demonstration of third inter
ference
state officials with Plaintiffs em
ployment with the
If
Bank.
it was “at will”
America,
UNITED STATES of
employer,
between the individual and his
as
Plaintiff-Appellee,
stated,
necessary
the trial court
it is
to con
sider and decide whether
the doctrine of
party
third
applied
interference should be
Bradley
ROTHHAMMER,
W.
is,
course,
the doctrine
well established.
Defendant-Appellant.
Mallen,
See F.D.I.C. v.
486 U.S.
1780, 100
America,
(1988);
UNITED STATES of
S.Ct.
L.Ed.2d 266
Greene v.
Plaintiff-Appellee,
McElroy,
360 U.S.
*8
(1959);
Raich,
L.Ed.2d 1377
Truax v.
(1915);
U.S.
DiMartini v.
terest in his as the 3(b). † poses Because the facts and opinion. issues in these cases are Fed.R.App.P. similar, pur- we have consolidated the cases for