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Goza v. Memphis Light Gas and Water Division

United States District Court, W.D. Tennessee, Western Division

June 14, 2019

MICHAEL GOZA, Plaintiff,
v.
MEMPHIS LIGHT, GAS AND WATER DIVISION, Defendant.

          ORDER AND OPINION AND ORDER DENYING LEAVE TO AMEND PLEADINGS TO CONFORM WITH THE EVIDENCE

          JON P. McCALLA UNITED STATES DISTRICT JUDGE.

         This matter came before the Court for a nonjury trial from February 25 to February 27, 2019. (ECF Nos. 99-101; see O. Granting Mot. Strike, ECF No. 91.) Plaintiff Michael Goza alleges that Defendant Memphis Light, Gas and Water Division (“MLGW” or the “Division”) discriminated against him on the basis of his protected speech and on the basis of his race when it demoted and terminated him in October, 2017. (Pretrial O., ECF No. 98 at PageID 1491.) For the reasons set forth below, the Court finds that Goza succeeds on both claims.

         The government does not have to turn a blind eye to the speech of its employees, but MLGW's decisions in this case were based on unconstitutional factors. As the Court explains below, the proof at trial showed that MLGW did not actually believe that Goza would hurt customers or treat anyone unfairly on account of their race. Instead, the Court finds that MLGW fired Goza because he expressed unpopular opinions and created a perception problem for the Division.

         Public perception alone cannot justify a restriction on free speech - the First Amendment, after all, restricts the government even though the government is chosen by the people. See Don Herzog, The Kerr Principle, State Action, and Legal Rights, 105 Mich. L. Rev. 1 (2006) (“Ordinarily, the state should do what citizens want… But sometimes the law bars that responsiveness.”). Some of Goza's statements may have been insensitive, offensive, and even bigoted, but they were protected by the Constitution nonetheless. MLGW thus violated Goza's First Amendment rights when it demoted and fired him.

         The Court also finds that MLGW terminated Goza in part because of his race. MLGW decisionmakers explicitly mentioned Goza's race as a reason for his termination. MLGW also acted differently in the case of Deandre Stewart, a similarly situated African-American employee, who received only a three-day suspension after he advocated killing Asian-Americans because of their race. MLGW then took the unusual step of directing a subordinate to write a report with the implicit goal of exonerating Stewart and downplaying his remarks. The Court finds this to be an affirmative attempt to undermine the even-handed application of MLGW policy. The Court considers this to be particularly strong evidence that MLGW's policies as applied to Goza were a pretext for discrimination.

         I. Background

         Michael Goza worked as a Customer Service Tech III (a “Tech III”) for MLGW, a division of the City of Memphis and the utility provider for electricity, gas, and water service for Memphis and Shelby County. (Pl.'s Resp. Def.'s Statement of Material Facts, ECF 45-1 at 585-86.) Goza's responsibilities included investigating and repairing problems with utility services in customers' homes. (Id. at 586.) Over thirty-two years of employment, Goza received customer compliments and good reviews but no customer complaints. (Def.'s Resp. Pl.'s Statement of Material Facts, ECF No. 48-1 at 803-804.)

         On August 15, 2017, protesters gathered to support the removal of a statue of Jefferson Davis from a public park in Memphis. (Trial Exhibits 6, 7.) Goza did not have work that day and attended the rally to voice his opposition to the removal efforts. (Id.; Testimony of Michael Goza, ECF No. 115 at PageID 2149.) Footage of Goza appeared on the nightly news and some statements he made at the protest were reported in The Commercial Appeal the next day. (Trial Exhibits 6, 7.) The Commercial Appeal quoted Goza as saying, “What I'm tired of is being portrayed as KKK or a white supremacist simply because I'm a white guy who wants to preserve my heritage.” (Trial Exhibit 7.)

         On Facebook, Goza had made the following statements before the August 15, 2017 rally:

Lincoln himself wanted to send all of you back to Africa. Segregation? That's a whole other topic. What has it accomplished other than to cause more division between the whites and blacks. You want to be with your kind. I want to be with mine. Blacks make up 13% of the population, but yet are responsible for almost 80% of violent crime. Every city that's a third world crap whole [sic] is a majority black and ran by blacks. I could not agree more about what the federal government has done to blacks however. They're my enemy. I look at them as an enemy of Christianity. Planned Parenthood is defended by democrats mostly, but yet has murdered more blacks than all violent crime combined. I agree on the war on drugs. Its been used as an excuse to destroy our liberty while the government ships the drugs into our country and profits from it. Why else do you think that Heroin is epidemic while our troops guard the poppy fields in Afghanistan? So we may not agree on the South, but we can sure agree on the criminality of the federal government.

(Trial Exhibit 2.)

You want to be with your kind. I want to be with mine, There's no wrong it that. You celebrate your history, but you want to destroy mine. You have black history month, but being proud of white history is racist. That's the hypocrisy I will never be at peace with. I work the streets of Memphis daily. The real racists are blacks. 90% of the blacks who are murdered are done so at the hands of other blacks. So if black lives matter, why don't you clean up your own damn house before complaining about my history and blaming your problems on whitey.

(Id.) When an individual on Facebook stated, “Signing won't do shit. Until Southern supporters get to the streets and riot like the ones pushing for removal. Eye for an[] eye, ” Goza replied:

I couldn't agree more. We at the League of the South are doing much more. We are getting in the streets. New Orleans was only a beginning. Charlottesville is this weekend and over a thousand [are] planning on going. We're planning these all over South. The attacks have awakened more and more.

(Id.)

         Goza's appearance at the rally attracted the attention of individuals who began to investigate Goza's social media activity. (See generally Trial Exhibit 5.) At some point, these persons learned that Goza worked for MLGW, perhaps because other MLGW employees told them or perhaps because one of Goza's Facebook pictures shows him in an MLGW truck. (See Trial Exhibit 2, Trial Exhibit 5.) One complaint about Goza's employment was shared twenty-one times on Facebook. (Trial Exhibit 5.) Stacey Greenberg, MLGW Community Relations Coordinator, testified that another post had been shared eighty-one times, although she was unable to produce documentation supporting her assertion at trial. (See Testimony of Stacey Greenberg, ECF No. 116 at PageID 2217.) Ten customers submitted complaints to MLGW about Goza, but MLGW received no complaints after August 29, 2017. (Id. at PageID 2224.)

         Goza's appearance at the rally and his social media statements came to MLGW's attention as early as August 17, 2017. (Trial Exhibit 1.) Richard Thompson, an MLGW Senior Communications Specialist, wrote in an August 17 email to Gale Carson, Vice President of Communications, that “There is a vibrant movement to ‘out' employees who are posting racist memes, etc. on social media. Stacey [Greenberg] and I have encountered posts from folks who come to our FB page to inform us because these employees self-identify themselves on FB. This hasn't turned into a story yet but it's only a matter of time.” (Id.) On August 18, Carson forwarded this email and the Facebook picture of Goza in an MLGW truck to: MLGW CEO and President Jerry Collins, MLGW General Counsel and Vice President Cheryl Patterson, Vice President of Customer Services Christopher Bieber, Vice President of Construction and Maintenance Nicholas Newman, and Vice President of Human Resources Von Goodloe. (Trial Exhibit 43.) Collins directed Goodloe to conduct a human resources investigation, and Goodloe in turn delegated this task to Virginia Leonard, the Acting Manager of Employment Services. (Trial Exhibit 1; Testimony of Virginia Leonard, ECF No. 114 at PageID 1670.) Leonard began her investigation on August 18, 2017. (Testimony of Virginia Leonard, ECF No. 114 at PageID 1677.)

         Goza resumed work on August 17, 2017, two days after the Jefferson Davis protest, and worked without incident until August 21, 2017, when MLGW suspended him. (Testimony of Virginia Leonard, ECF No. 114 at PageID 1758; Pretrial O., ECF No. 98 at PageID 1506.) By August 21, MLGW had decided that Goza would be moved to a position in which he would not have any potential contact with customers, despite, at that time, being unable to articulate an MLGW policy that Goza had violated. (See Pl.'s Resp. Def.'s Statement of Material Facts, ECF 45-1 at 585-86; see also Testimony of Virginia Leonard, ECF No. 114 at PageID 1692; and see Emails, Trial Exhibit 31 (offering Collins's opinion that Goza should be removed from all customer contact).) On September 8, 2017, MLGW offered Goza the choice of working as a Material Handler or being terminated. (Pretrial O., ECF No. 98 at PageID 1506.) The Material Handler position had a twenty-two percent lower hourly pay rate than Goza's Tech III position and offered far less potential for overtime pay. (Id.) Under MLGW's offer, Goza would be forever unable to bid for any position that had any potential for customer contact. (Id.) At trial, Goza testified that, after accounting for lost overtime, the demotion would constitute a fifty percent pay cut. (Testimony of Michael Goza, ECF No. 116 at PageID 2165.) Goza refused the Material Handler position on September 22, 2017 and was terminated on October 3, 2017. (Pretrial O., ECF No. 98 at PageID 1506.)

         Goza filed this lawsuit on December 1, 2017. (Complaint, ECF No. 1.) He alleges that MLGW violated his right to free speech when it took disciplinary action against him. (Id. at PageID 5-6.) Goza also claims that MLGW fired him because he is white. (Id.) Goza pursues these claims under 42 U.S.C. §§ 1981 and 1983, which allow individuals to sue government actors for violations of civil rights. (Complaint, ECF No. 1.) Goza asks for reinstatement as a Customer Service Tech III, for backpay and lost benefits, and for compensatory damages. (Id. at PageID 6-7; Pl.'s Post-Trial Mem., ECF No. 107 at PageID 1579-80.)

         II. Finality of Determination

         A. Substantive Law

         Before analyzing the merits of Goza's claim, the Court considers the threshold question of whether MLGW can be held liable in this case at all. A municipal defendant “cannot be held liable under § 1983 on a respondeat superior theory.” Monell v. Dep't of Soc. Servs., 436 U.S. 658, 691 (1978). Instead, a municipality is liable under § 1983 “only if a custom, policy, or practice attributable to the municipality was the moving force behind the violation of the plaintiff's constitutional rights.” Gohl v. Livonia Pub. Sch. Sch. Dist., 836 F.3d 672, 685 (6th Cir. 2016), cert. denied, No. 16-1001, 2017 WL 635927 (U.S. Oct. 2, 2017) (quoting Heyerman v. Cty. of Calhoun, 680 F.3d 642, 648 (6th Cir. 2012)) (internal quotation marks omitted).

         “[P]olicy or custom does not have to be written law; it can be created ‘by those whose edicts or acts may fairly be said to represent official policy.'” Paige v. Coyner, 614 F.3d 273, 284 (6th Cir. 2010) (quoting Monell, 436 U.S. at 694 and citing Pembaur v. City of Cincinnati, 475 U.S. 469, 483 (1986)). The Sixth Circuit has held that:

A municipality can also be held liable for a single decision by a policymaker if the official is the one who has the final authority to establish municipal policy with respect to the action ordered. Similarly, a municipality can be liable for a decision made by a subordinate if the decision was ratified by a final policymaker. However, mere acquiescence in a single discretionary decision by a subordinate is not sufficient to show ratification.

Arnold v. City of Columbus, 515 Fed.Appx. 524, 538 (6th Cir. 2013) (internal citations and quotation marks omitted) (quoting Feliciano v. City of Cleveland, 988 F.2d 649, 655 (6th Cir. 1993)). “Whether an official has final policy making authority is a question of state and local law.” O'Brien v. City of Grand Rapids, 23 F.3d 990, 1001 (6th Cir. 1994).

         B. Discussion

         As a division of the City of Memphis, MLGW is a municipal defendant and may therefore be liable in this case only if its actions were the result of a custom, policy, or practice. Monell, 436 U.S. at 691. (Pl.'s Resp. Def.'s Statement of Material Facts, ECF 45-1 at 585-86.) MLGW argues that no custom, policy, or practice caused Goza's termination in this case. (ECF No. 112 at PageID 1595-96.) MLGW further claims that even if the decisions at issue in this case were “made or supported” by MLGW President Collins and Vice President of Human Resources Goodloe, they are not attributable to MLGW itself as a government entity. (Id. at PageID 1599.)

         1. MLGW CEO and President Collins had the power to discipline employees

         MLGW claims that its policies do not allow Collins or Goodloe to make final and unreviewable employment decisions. (ECF No. 112 at PageID 1599.) See Arnold, 515 Fed.Appx. at 538. Instead, MLGW argues that the Board of Directors “with the powers granted to it by the City Charter” established a grievance resolution process as part of a Memorandum of Understanding between MLGW and its labor union. (ECF No. 112 at PageID 1599.) MLGW claims that in doing so “the Board created a custom” under which MLGW's employment decisions would not be final until the conclusion of this grievance process. (Id.)

         “A federal court would not be justified in assuming that municipal policymaking authority lies somewhere other than where the applicable law purports to put it.” City of St. Louis v. Praprotnik, 485 U.S. 112, 126 (1988). To determine whether the law delegates final and unreviewable authority to Collins, the Court considers the City Charter and the Memorandum of Understanding. The Court need not consider testimony regarding MLGW employees' understanding of who the final decisionmaker is. See Id. (“[A] a federal court would not be justified in assuming that municipal policymaking authority lies somewhere other than where the applicable law purports to put it. And certainly there can be no justification for giving a jury the discretion to determine which officials are high enough in the government that their actions can be said to represent a decision of the government itself.”) (See ECF No. 112 at PageID 1597, 1599.)

         The Article of the City Charter that establishes MLGW also charges the MLGW President, “subject to the regulations of the board of Light, Gas and Water Commissioners, ” with the duty of “general supervision over the operation of said light, gas and water division and of all officers and employees of said light, gas and water division.” Memphis City Charter, Part I, Art. 65, § 672. The Charter also requires that “the powers hereby granted, ” including the powers granted to the President, “be liberally construed to effectuate the purposes hereof.” Id. at § 699. “Liberally construed, ” the President's power of general supervision over employees includes the authority to make final disciplinary decisions. See id. at § 672, 699. Although the President is required to make regular reports to the Board of Commissioners, the City Charter does not require that the Board ratify, review or approve individual operational decisions. Id. at § 672. The City Charter empowers the President to make municipal policy related to employee supervision and discipline. See Feliciano, 988 F.2d at 655; Pusey v. City of Youngstown, 11 F.3d 652, 659 (6th Cir.1993).

         MLGW argues that the President's powers as set out by the Charter are subject to the Board's “exclusive authority to engage, determine the number of, and fix the duties and salaries of all employees.” (Mem. of Understanding, Trial Exhibit 48 at 4.) MLGW claims that the Board exercised this authority when it entered into the Memorandum of Understanding with its labor union. (ECF No. 112 at PageID 1599.) MLGW contends that Collin's decisions are not municipal policy, because under the Memorandum the President's decisions are subject to review through a grievance resolution process. (Id.)

         MLGW asks the Court to apply the Supreme Court's reasoning in Praprotnik, 485 U.S. at 126, as the Court considers the issue of final policymaking authority. (ECF No. 112 at PageID 1597.) In Praprotnik, the Supreme Court found that St. Louis's City Charter established a Civil Service Commission “[t]o consider and determine” employment matters upon reference or appeal. 485 U.S. at 129. The Charter provision relied on by the Supreme Court stated that the Civil Service Commission had the power:

To consider and determine any matter involved in the administration and enforcement of this [Civil Service] article and the rules and ordinances adopted in accordance therewith that may be referred to it for decision by the director [of personnel], or on appeal by any appointing authority, employee, or taxpayer of the city, from any act of the director or of any appointing authority. The decision of the commission in all such matters shall be final, subject, however, to any right of action under any law of the state or of the United States.

Praprotnik, 485 U.S. at 129 (insertions in original) (quoting St. Louis City Charter, Art. XVIII, § 7(d) (1988)). The Supreme Court concluded that the plaintiff had not been terminated through operation of an official policy, because, in light of the Civil Service Commission's powers, the City Charter did not empower his immediate supervisor or his department head to make final decisions. Praprotnik, 485 U.S. at 129.

         The Memorandum of Understanding's grievance resolution process differs significantly from the St. Louis City Charter reviewed in Praprotnik and from the review boards examined in other cases. Praprotnik, 485 U.S. at 129; see Meyers v. City of Cincinnati, 14 F.3d 1115, 1118 (6th Cir. 1994) (discussing powers of the Civil Service Commission established under Ohio law). In this case, the Memorandum does not empower any person or entity to “consider and determine” issues. See Praprotnik, 485 U.S. at 129. To the contrary, the express goal of the Memorandum's grievance procedure is “to reach an understanding” and to ensure that “grievances [are] settled in an orderly, prompt and equitable manner.” (Mem. of Understanding, Exhibit 43 at 35.)

         The Memorandum of Understanding's grievance process is thus not an appeal nor a determination, but rather a mechanism for facilitating settlement between the labor union and MLGW. (Mem. of Understanding, Exhibit 43 at 4.) Step 1 of the grievance process is an “oral discussion” between the employee and his supervisor “to encourage a cooperative and direct resolution of differences.” (Id. at 36.) The employee's supervisor is required to give an oral answer at Step 1, but any resolution at this phase is a “settlement” rather than a determination or a finding. (Id.) At Step 2, the employee provides a written grievance and then has a “meeting” with his Department Head and other members of management “in an effort to settle the grievance.” (Id ...


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