Case Information

*1 18-1713-(L)

Atterbury v. United States Marshals Service

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT August Term

Argued: September Decided: October Docket Nos. cv(L); ‐ cv(Con) ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

STEPHEN L. ATTERBURY,

Plaintiff  ‐  Appellant,

v.

UNITED STATES MARSHALS SERVICE, GARY

INSLEY, CONTRACTING OFFICER, OFFICE OF

SECURITY CONTRACTS, JUDICIAL DIVISION,

UNITED STATES MARSHALS SERVICE, IN HIS

INDIVIDUAL CAPACITY, JOHN DOE, IN HIS

INDIVIDUAL CAPACITY,

Defendants  ‐  Appellees. ___________________________________________________ DANIEL HAUSCHILD,

Plaintiff  ‐  Appellee,

UNITED STATES MARSHALS SERVICE,

Defendant  ‐  Appellant,

PATRICIA HOFFMAN, CONTRACTING OFFICER,

OFFICE OF SECURITY CONTRACTS, JUDICIAL

SECURITY DIVISION, UNITED STATES SERVICE,

IN HER INDIVIDUAL CAPACITY, JOHN DOE, IN

HIS INDIVIDUAL CAPACITY,

Defendants.

‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

Before: NEWMAN, CABRANES, LYNCH, Circuit Judges

Consolidated appeals from May 8, 2018, judgment District Court Western District New York, granting summary judgment Marshals Service (“USMS”) on claim Stephen L. he improperly discharged as Court Security Officer (“CSO”) (No. ‒ 1713), and June 15, 2018, judgment Southern District New York granting summary judgment Daniel F. on he improperly discharged CSO (No. ‒ 2378). reverse remand; No. ‒ we affirm

remand.

Joshua J. Ellison (Kate M. Swearengen, brief), Cohen, Weiss Simon LLP, New York, NY, Stephen L. Atterbury, Plaintiff Appellant ‐ Daniel Hauschild, Plaintiff Appellee *3 Christine S. Poscablo, Asst. U.S. Atty., New York, NY (Geoffrey S. Berman, U.S. Atty. for the Southern District New York, Benjamin H. Torrance, Asst. U.S. Atty., New York, NY, James P. Kennedy, Jr., U.S. Atty. for the Western District New York, Michael S. Cerrone, Monica J. Richards, Asst. U.S. Attys., Buffalo, NY, brief), United States Marshals Service, Gary Insley John Doe, Defendants Appellees ‐ 1713, United States Marshals Service, Defendant Appellant JON O. NEWMAN, Circuit Judge:

These appeals present, unusual context, issues whether discharged public employee working federal government contractor has property interest and, if so, whether discharge comported requirements procedural due process. The context is unusual because, both appeals, claimed arise from between employee’s union employer, but discharge ordered government agency employer has contract. Stephen L. appeals May judgment District Western District New York (Richard Arcara, Judge) granting summary judgment Marshals *4 Service (“USMS”) on his claim he was improperly discharged from his position as a Court Security Officer (“CSO”). No. ‒ 2378, appeals from June 2018, judgment District Southern District New York (Cathy Seibel, District Judge) granting summary judgment Daniel F. Hauschild his he was improperly discharged as a CSO.

We conclude both Atterbury and Hauschild in their as CSOs and their discharges did comply requirements procedural due process. We therefore reverse and remand in affirm remand in No. ‒

Background

The parties their relationships Stephen L. CSO in Western District New York from until termination April serving federal courthouse Rochester, New York. Daniel CSO Southern New York until termination Oct. serving most recently Lead CSO federal courthouse Poughkeepsie, New York. (collectively, “CSOs”) were employed Security, Inc. (“Akal”), private company providing security *5 services. Akal was retained by provide security services at federal courthouses.

The relationship between CSOs and Akal was governed by collective bargaining agreement (“CBA”) between Akal and Security Officers, union representing CSOs. The relationship between and was governed between them (“Akal Contract”). We consider provisions these documents below.

Atterbury’s alleged misconduct Atterbury left work early Feb. after telling superior officer that he was going home because he felt ill. The parties dispute whether Atterbury was actually ill. Atterbury contends he left because he felt unwell, and he understood superior officer’s response was indication permission. That officer claimed he thought Atterbury joking. Other witnesses gave divergent accounts whether Atterbury appeared sick, some corroborating account others suggesting he did seem ill he angry due miscommunication about whether he needed remain certain post. A U.S. Marshal, who said he witnessed leaving, stated “did appear sound sick” but “appeared sounded agitated annoyed.” J. App’s The Marshal *6 reported Atterbury, USMS directed Akal to investigate whether Atterbury had violated performance standards by abandoning his post. After interviewing several witnesses, Akal reported to USMS that its findings were consistent with Atterbury’s version events.

USMS asked Akal to reconsider, finding that Akal’s investigation insufficiently thorough because its investigator conducted only brief, informal interview eyewitness marshal who had reported incident. Akal stood its findings, noting that USMS had given Akal information that contradicted its findings. Nevertheless, USMS informed Akal it disagreed Akal’s findings, Atterbury’s actions had undermined confidence his ability perform duties CSO, Atterbury should permanently removed performing Akal Contract. USMS did identify findings Akal which it disagreed actions which relied. appealed removal Akal. Akal apparently forwarded appeal USMS, informed Akal appeal denied. Akal then terminated employment.

Hauschild’s alleged misconduct July requested investigate eleven allegations concerning it received two *7 anonymous letters. One allegation that Hauschild had sent his brother, who a convicted felon, to home a U.S. Bankruptcy to fix a plumbing problem, and, as Lead CSO, had assigned duty Security Officer to accompany his brother, who could not be left unattended. Akal’s report USMS substantially confirmed this allegation and recommended Hauschild, who point temporarily suspended, be disciplined a “time served” suspension and given a final warning. Akal’s investigation did confirm other anonymous allegations against Hauschild. letter identical (except names and dates) letter directing removal, USMS notified Akal it disagreed Akal’s findings recommendation, Hauschild’s actions had undermined confidence ability perform his duties CSO. USMS ordered permanently removed performing Akal USMS Contract. USMS did provide statement its findings reasons removing Hauschild. challenged removal asked hearing. Akal asked reconsider removal decision. informed Akal it had received Hauschild’s appeal denied it. then terminated Hauschild’s employment.

Litigation procedure . Atterbury filed suit the Western District of New York challenge the termination of his employment, filed similar suit Southern of New York. For purposes of the pending appeal, need note only following procedural aspects each case. Atterbury’s complaint included claim under Administrative Procedures Act (“APA”), specifically, “USMS violated APA, U.S.C. § 706(2)(A) § 706(2)(B), because its decision remove Atterbury from CSO program, thus ending his employment, without sufficient due process contrary constitutional rights.” Atterbury Complaint ¶ 58. He claimed he constitutionally protected property interest continued employment virtue “just cause” provision CBA. Id ¶ Judge Arcara dismissed complaint, ruling, among other things, Atterbury’s APA claim really “a disguised action” jurisdiction Tucker Act, see U.S.C. § 1491(a)(1) lies Federal Claims, see U.S.C. § 1346(a). Marshall [sic] Service ‒ CV ‒ ‒ A(F), WL *9 *13 (July 2014) (“ I ”). Arcara did reach merits APA based alleged arising “just cause” provision CBA.

Atterbury appealed, we reversed. See Atterbury v. United States Marshals Service , 805 F.3d 398, 409 (2d Cir. 2015) (“ Atterbury II ”). First, we noted that Stein v. Board City of New York , 792 F.2d 13 (2d Cir. 1986), we had recognized “an employee a government contractor may certain circumstances have a constitutionally protected property interest continued employment.” Atterbury , 805 3d at 407. The plaintiff Stein contract employer providing he could be discharged except “good cause,” Stein , F.3d at we there concluded this clause “created protected property interest” Stein. See id. Atterbury II , we stated, “Atterbury’s circumstances parallel those plaintiff Stein. His complaint can fairly read allege CBA’s ‘just cause’ provision gave him protected employment.” F.3d at 407. Finally, ruled Atterbury’s APA “has basis independent United States” therefore “does fall within scope Tucker Act.” Id. We remanded further proceedings. See id

On remand, Arcara considered merits APA claim. Marshals Service CV ‒ A, WL *2 (W.D.N.Y. May 2018) (“ III ”). First, he recognized *10 ultimate question whether a legitimate entitlement to employment as a CSO. id . at *7. He then stated that “[t]hat question cannot be answered without referring to the USMS ‐ Akal contact, the CBA explicitly references.” Id . at *8 n.4. Judge Arcara acknowledged that section 8.1 the CBA provided no employee “‘shall be disciplined terminated without just cause.’” Id. (quoting CBA § 8.1). He then noted “[s]ection the CBA provides CSO may be ‘discipline[d]’ only ‘subject to grievance and arbitration procedures, except those issues involving USMS rights under contract between USMS Company,” id . at *9 (quoting CBA § 4) (emphasis second brackets original), section H ‐ 3(b) Akal ‐ USMS contract provides:

The United States Marshal Service reserves right at all times determine suitability any Contractor employee serve CSO. Decisions rendered dispute resolution process . . . shall binding upon Marshals Service.

Id . (quoting Akal USMS contract § H3(b) (ellipsis original). Arcara concluded CBA Akal contract, read

together, created “hybrid contract, unlike contract at issue Stein ,” id . *11, “vests considerable discretion decide what factors are relevant matter CSO discipline,” id *10, Atterbury therefore “has no property interest in continued employment,” id . at *11. Judge Arcara granted motion summary judgment denied Atterbury’s motion summary judgment. See id . at *12. timely appeal No. 18 ‒ 1713. Southern District case, Hauschild’s complaint included same APA claim Atterbury made Western case. Hauschild Complaint ¶ Like Judge Arcara, Judge Seibel initially ruled Hauschild’s APA claim contract which jurisdiction was precluded Tucker Act. See Hauschild v. United States Marshals Service , No. CV 5211 (CS), 2015 WL 13203452, *7 ‒ *8 (S.D.N.Y. Aug. 2015) (“ Hauschild I ”). We reversed ruling light II See Hauschild v. United States Marshals Service , App’x (2d Cir. 2016) (“ Hauschild II ”).

On remand, Judge Seibel first ruled she could consider only CBA but also contract, referred CBA. Marshals Service CV ‒ (CS), WL *4 (S.D.N.Y. June 2018) (“ III ”). However, she disagreed Arcara I ruled “just cause” provision CBA created Hauschild’s CSO, *12 unimpaired any other language CBA or ‐ contract. See id. at *7 ‒ *10. She therefore denied summary judgment motion USMS.

Turning next to issue whether Hauschild’s was terminated without procedural protections due process, Judge Seibel noted that was given an opportunity to provide oral written statements response to each allegation against him, inferring he must have seen July letter to Akal, which requested an investigation, because language Hauschild’s statement was nearly identical language July letter. See id. *11. She also noted was given opportunity submit post ‒ termination response. id . However, she pointed out, “The record does indicate [Hauschild] provided Akal’s investigation report, information upon which report based, other information upon based its decision.” Id . Seibel ruled “neither Supreme precedent nor Second

Circuit precedent dictates full adversarial hearing necessarily required post termination comport due process.” Id *12. Then, carefully endeavoring apply due process analysis Mathews Eldridge U.S. (1976), she concluded “the risk error factor tilts [Hauschild’s] *13 favor, because there are concerns about witness credibility reliability, and thus potential value hearing which [Hauschild] can respond to evidence against him perhaps confront his accusers is substantially greater.” Id. She therefore ruled process accorded “constitutionally deficient,” id ., granted motion summary judgment as to his claim under U.S.C. § 706(2)(B), remanded to further proceedings, see id *13. The timely appeal is

We granted motion to consolidate appeal with USMS’s appeal Hauschild’s case.

Discussion

Confronting carefully written opinions two experienced Judges reaching opposite conclusions on same issue arising same contracts, we agree Seibel. Both judges agreed issue APA both is whether they have constitutionally protected property interest their as CSOs. They also agreed *14 this issue arose only on the APA claim section 706(2)(B), requires a reviewing court “hold unlawful set aside agency action . . . found to be . . . contrary constitutional right,” a free standing constitutional claim of sort recognized in Bivens v. Six Unknown Agents of Federal Bureau of Narcotics , U.S. (1971). Cf Ziglar Abbasi , S. Ct. 1857 (2017) (“[E]xpanding Bivens remedy now a disfavored judicial activity.”) (quotation marks omitted). Both judges dismissed employees’ Bivens claims. We affirmed dismissal of Bivens in II see F.3d we noted II had sought review dismissal his Bivens claim. App’x n.1.

We agree Seibel “just cause” sentence section 8.1 CBA unequivocally creates property employment: “No employee, after completion or her probationary period, shall disciplined terminated without just cause.” CBA contract, § 8.1. As she noted, ruled Stein “good cause” provision an employee’s contract private employer created interest, “notwithstanding provision between employer Board Education requiring employer remove employee whom Board deemed fall below acceptable standards.” III , WL at *9 (citing Stein , F.2d at 14, 17). See Abramson Pataki , F.3d (2d Cir. 2002) (“[A] protectable may arise situation where an employee may be removed only cause.”).

USMS contends the “just cause” sentence section 8.1 of the CBA is modified by the following sentence section:

“It is agreed by the parties instances when the employee is removed from working under the [Akal USMS Contract] by the USMS, or when the employee’s authority work as Security Officer under the [Akal USMS Contract] is otherwise denied or terminated by USMS, or Employee no longer satisfies USMS’s qualifications or her position, Employee may terminated without recourse procedures under this Agreement . . . .”

CBA § 8.1 says effect this sentence is strip employees “removed service by action . . [of] only avenue CBA provides challenge disciplinary termination decisions,” Br. However, this argument ignores avenues outside CBA processes by employees can challenge removal supported cause, such as breach ‐ action against Section 301(a) Labor Management Relations Act, U.S.C. § 185(a), Seibel pointed out. III WL *8. Furthermore, “without recourse” sentence sensibly read do no more than exempt terminations ordered by USMS the CBA’s dispute resolution processes. ^[2]

Also bearing on a literal reading of the CBA’s “just cause” provision is the fact other CBAs between Akal union representing CSOs, the “just cause” provision explicitly exempted terminations ordered by the USMS. Strolberg v. United States Marshals Service , F. App’x 114 (9th Cir. 2009); International Union, Security, Police, Fire Professionals of America (SPFPA) United States Marshal’s Service , Supp. 2d (S.D.N.Y. 2004).

Finally, we reject argument USMS section H 3(b) the Akal ‐ contract somehow modifies “just cause” provision CBA. Section H 3(b) provides, “The Marshals Service reserves right all times determine suitability Contractor employee serve CSO.” Preliminarily, we do not agree Arcara contract can modify unambiguous “just cause” language CBA simply because there reference (although incorporation reference) CBA. More importantly, our decision Stein has already rejected similar argument. As we noted II, “the ‘just cause’ provision [Stein’s] *17 employment contract created protected property interest” and “the city had transgressed on of entitlement disqualifying the plaintiff the ‘good moral character’ provision” of employer’s contract with city. F.3d at 407. Similarly here, “suitability” provision of contract would transgress employee’s protected property interest if it were permitted override “just cause” provision of CBA. Seibel relied this understanding Stein . See Hauschild III , WL *9.

We conclude both Atterbury Hauschild constitutionally protected property their employment CSOs. Wilson MVM, Inc., F.3d (3d Cir. 2007) (concluding that, with respect CSOs, “a private employment ‘just cause’ termination clause can create constitutionally protected interest”); cf Stein F.2d

We also conclude procedures used terminations both Atterbury have thus far comported requirements due process. Although were informed initial misconduct allegations gave rise Akal’s investigations, provided no explanation reasons its decisions they removed CSO program. Instead, it sent both same form letter, which stated only USMS “d[id] not concur with Akal’s findings proposed disciplinary strategy” each CSO’s “actions have undermined District’s confidence trust [his] ability effectively perform duties.” Neither letter identified which of Akal’s findings it rejected. Supp. App’x 323. As Atterbury, who was subject of one misconduct allegation, which Akal found unsubstantiated, did identify findings Akal which it disagreed or actions of on which relied. And, since facts were dispute, some form hearing was required. As Hauschild, who was subject eleven misconduct allegations, only one regarded as substantial, did indicate whether it based its decision on substantiated allegation, on unsubstantiated allegations, both. And, Seibel recognized, extent facts were dispute, some form hearing required.

Remedy There remains consideration appropriate remedy. II said only we “remand matter further proceedings consistent this order.” App’x Because decision ruled only Court’s jurisdiction, decretal language sufficient. However, *19 now we have upheld Atterbury’s Hauschild’s claims merits, we need to make our remand slightly more precise.

Because claims we have sustained arise APA, permits review agency action, district courts both cases must remand to for further proceedings. That is procedural route Seibel ordered to be followed, see III WL *13, route sought to followed Atterbury, see Br.

Conclusion case, No. ‒ we reverse remand to District

Court with direction remand to further proceedings consistent with this opinion; Hauschild’s case, affirm remand direction remand further proceedings consistent this opinion.

[1] some circumstances, employee, terminated one position, might able assert denial constitutionally protected if employer reassigns employee another position no adverse consequences. However, noted A tterbury II “[T]he defendants have argued, nor there any basis record us infer, non CSO positions open could have been reassigned.” F.3d n.4.

[2] II noted existence “without recourse” sentence, but expressed no view its significance because relied on it on appeal. F.3d n.3.