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Rookard v. Health and Hospitals Corp.

June 9, 1983


Appeal from a judgment of the United States District Court for the Southern District of New York, Gagliardi, J., dismissing, after trial, a § 1983 action against a municipal corporation. The district judge ruled the plaintiff's proof insufficient under Monell v. Department of Social Servs., 436 U.S. 658 (1978). Reversed and remanded. Judge Van Graafeiland concurs in separate opinion.

Author: Lumbard

Before: LUMBARD, VAN GRAAFEILAND and PIERCE, Circuit Judges.

LUMBARD, Circuit Judge:

Margaret Rookard, formerly the Director of Nursing at Harlem Hospital, appeals from the June 21, 1982 decision of Judge Gagliardi of the Southern District of New York, dismissing her civil rights action against the New York City Health and Hospitals Corporation (HHC), the municipal corporation which operates New York City's municipal hospitals. Rookard claims that HHC, in violation of her First Amendment right to free speech, demoted and eventually fired her because she disclosed illegal and wasteful practices at Harlem Hospital. Judge Gagliardi dismissed Rookard's claim after a two-day bench trial, concluding that Rookard had not, as required by Monell v. Department of Social Servs., 436 U.S. 658, 98 S. Ct. 2018, 56 L. Ed. 2d 611 (1978), proven that an official HHC policy caused her demotion or discharge. The central issue on appeal is the sufficiency of Rookard's proof under Monell. We disagree with Judge Gagliardi.Rookard presented sufficient evidence that her injuries resulted from an HHC policy to chill the exercise of First Amendment rights by punishing those who dare complain of corruption and mismanagement. Accordingly, we reverse the judgment and remand for further proceedings.

Rookard's evidence consisted of her own testimony and numerous exhibits.*fn1 At the close of Rookard's case, HHC rested, and presented no evidence. The facts, as testified to by Rookard, and supported by her documentary evidence, may be summarized as follows.

In October, 1980 Rookard began employment, at a salary of $42,000, as Harlem Hospital's Director of Nursing. In this position Rookard supervised a staff of approximately 1,000 persons, including 600 registered and practical nurses. Rookard was hired by Anthony Summers, the hospital's Acting Executive Director. Shortly after Rookard began work Summers asked her to sign permits that would authorize unlicensed nurses employed by outside commercial agencies to work at Harlem Hospital. Rookard believed that such permits could lawfully be issued only to nurses directly employed by the hospital, and she refused to sign. Summers resented Rookard's decision and thereafter ostracized her.Rookard noted a number of other irregularities in the hospital's nursing department. She found that many nurses abused the hospital's "sign-in" procedures, and either failed to sign the register, or signed for hours they had not worked; that the hospital had not kept adequate records of its use of licensed agency nurses, and could not accurately evaluate bills submitted by agencies; that nurses who worked overlapping, consecutive shifts, one shift each for the hospital and an agency, frequently were paid by both employers for the time of overlap; that Harlem Hospital, for no apparent reason, hired most of its agency nurses through a single agency (Gotham Registry); that agency nurses hired to work in specialized areas often lacked proper credentials; and that some of the foreign nurses working at the hospital had not adequately documented their immigration status. Rookard reported all of these problems to Summers, who ignored her. She took steps to eliminate the problems, and to improve efficiency, and thereby earned the enmity of a number of her nurses. She began to receive anonymous, threatening phone calls and letters.

Illness kept Rookard out of her office from February to May, 1981. During Rookard's absense one of her subordinates, at Summers' direction, signed the permits authorizing unlicensed agency nurses to work at the hospital. Rookard, upon returning to work, refused to use the permits. She returned the permits to the State Education Department and advised the Department that they had been invalidly issued. Summers resigned his post as Harlem Hospital's Acting Executive Director in May, 1981, and was succeeded by Carl Carter as Executive Director. In July, 1981 Rookard told Carter that she planned to inform HHC's Inspector General's Office of the threats against her and of some of the problems she had found. Carter said "fine," and did not object. Later that month Rookard met with HHC Inspector General Conrad Johns and told him of the threats, the dispute over unlicensed agency nurses, and the fact that nurses sometimes left work before completing their shifts. Johns, or his staff, promised an investigation.

In early August, Carter met Rookard at HHC head-quarters in Manhattan and told Rookard of his decision to relieve her as Director of Nursing, and to transfer her to headquarters as an assistant to Grace Matsunaga, the Director of Nursing, Corporate Office. Carter told Rookard that she had been "battered enough" at Harlem Hospital, and that she would be reinstated as Director of Nursing when matters "cooled down," but gave no other reason for the transfer. Rookard objected to the transfer, but began work in her new position, at her previous salary, late in August.Matsunaga assigned Rookard a windowless cloak room for an office and informed her of her displeasure that Rookard's salary was higher than hers. Rookard worked on "special projects" for Matsunaga into early 1982.

On January 28, 1982 HHC's Inspector General's Office reported on the investigation of Harlem Hospital it had conducted following Rookard's transfer. The Inspector General's report stated that Gotham Registry had overcharged Harlem Hospital $513,636.18 between September, 1977 and May, 1981. Harlem Hospital, the report found, had repeatedly paid Gotham for full working shifts when Gotham's nurses actually worked only part shifts. Although Rookard had, by January, 1981, reduced the number of tours serviced by Gotham nurses by 43%, the hospital's use of Gotham nurses returned to previous levels when, in March, 1981, illness kept Rookard away from work. The report also found that Summers' plan to use unlicensed agency nurses "was clearly in violation of state rules and regulations."

On March 9, 1982 Carlotta Brantley, HHC's Vice President for Corporate Affairs, informed Rookard that Matsunaga no longer would tolerate an assistant earning more than she earned, that budget cuts necessitated personnel changes within HHC, and that she, Rookard, would have to find a new position. Brantley offered to employ Rookard as an entry-level nurse, an offer which Rookard indignantly refused. By letter dated March 19, 1982 Brantley gave Rookard notice of discharge, effective April 30, 1982.

Rookard retained counsel, who requested HHC's General Counsel to stay the scheduled discharge. On April 28th the General Counsel informed Rookard's attorney that a stay would not be granted. On April 29th Rookard filed suit in the Southern District for an injunction against discharge. Judge Gagliardi denied the injunction; Rookard was discharged; and Rookard's claim against HHC for reinstatement as Director of Nursing and damages was tried on May 17th and 18th.*fn2

Under Monell v. Department of Social Servs., 436 U.S. 658, 98 S. Ct. 2018, 56 L. Ed. 2d 611 (1978), a plaintiff suing a municipal corporation, such as HHC, under 42 U.S.C. § 1983 must prove that the constitutional wrong complained of resulted from the corporation's official policy, custom, ordinance, regulation, or decision. As a municipal corporation cannot be held liable under § 1983 on a respondeat superior theory, Monell, 436 U.S. at 691-94, proof that the corporation employed a tortfeasor will not, standing alone, establish liability. Monell thus required Rookard to show that an official HHC policy of punishing "whistle-blowers," in violation of her First Amendment right to free speech, caused her transfer and discharge. The district judge ruled Rookard's evidence insufficient to establish the existence of any relevant HHC policy, and so dismissed the case. We disagree with the judge's ruling and find, as a matter of law, that Rookard's proof was sufficient.

A single unlawful discharge, if ordered by a person "whose edicts or acts may fairly be said to represent official policy," Monell, 436 U.S. at 694, may support an action against the municipal corporation. The difficulty, of course, lies in identifying those officials whose actions, because they may fairly be treated as the municipality's own actions, establish policy. Where an official has final authority over significant matters involving the exercise of discretion, the choices he makes represent government policy.*fn3 See Bowen v. Watkins, 669 F.2d 979, 989 (5th Cir. 1982). An official has final authority if his decisions, at the time they are made, for practical or logal reasons constitute the municipality's final decisions. See Familias Unidas v. Briscoe, 619 F.2d 391, 404 (5th Cir. 1980). An allegation of policy-making authority thus requires proof of the official's scope of employment and his role within the municipal or corporate organization.*fn4 An official's title, though not dispositive of his authority to make policy, see Schneider v. City of Atlanta, 628 F.2d 915, 920 (5th Cir. 1980), is relevant for the inferences fairly to be drawn therefrom.

Having evaluated Rookard's evidence under the principles above, we conclude that Rookard sufficiently established both Carter's and Brantley's authority to make policy. Rookard proved that Carter held the post of Executive Director of Harlem Hospital; that Rookard herself, as Director of Nursing, held a high position and supervised approximately 1,000 employees; that Carter ordered her transfer; and that the transfer occurred. This evidence establishes that Carter held a top level position with HHC and had authority to order the transfer. Rookard similarly proved that Brantley held the post of Vice President for Corporate Affairs and had authority to order her discharge. Equally important, there was evidence that Carter's and Brantley's authority over personnel decisions was final. On August 7, 1981, several days after Carter transferred Rookard, HHC President Stanley Brezenoff received an anonymous telegram waring him that the "Establishment" wanted to "remove" Rookard because "she exposed frauds." Brezenoff referred this telegram to Carter. In April, 1982, when Rookard's counsel requested a stay of the scheduled discharge, HHC's General Counsel declined to grant a stay or to reverse the transfer. The reluctance of HHC's President and General Counsel to intervene, or even to inquire into Rookard's claims, confirms that Carter and Brantley had final authority in personnel matters.*fn5 Moreover, HHC's counsel conceded at trial that HHC is "highly ...

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