Cannon v. Vill. of Bald Head Island, N. Carolina (Wynn 5/30/2018): The Fourth Circuit held that city officials did not violate clearly established First Amendment protections by firing several public safety officers for messages in the officers’ private text-message chain, but that officials did violate the officers’ clearly established Fourteenth Amendment due process rights by publicly disclosing allegedly false reasons for their termination without first affording the officers a name-clearing hearing. The court also held that the district court’s denial of appellants’ motion for summary judgment was neither a “final order” nor subject to pendent appellate jurisdiction. The court accordingly reversed the district court’s denial of qualified immunity as to the First Amendment claim, affirmed its denial of qualified immunity as to the Fourteenth Amendment claim, and dismissed for lack of appellate jurisdiction the appeal of the summary judgment denial. Full Opinion
United States v. Dillard (Agee 5/30/2018): The Fourth Circuit held that the district court’s ordered restitution of $100,000 to defendant’s child-pornography victim was not an “illegal” sentence under the Mandatory Victims Restitution Act, and that therefore the defendant’s right to appeal was barred by the appeal waiver in his plea agreement. The Fourth Circuit further held that the district court abused its discretion in refusing to award any restitution to the defendant’s non-contact victims merely because the district court found fault with the government’s proposed restitution calculation scheme. Full Opinion
Verisign, Inc. v. XYZ.COM LLC (Floyd 5/29/2018): The Fourth Circuit held that a prevailing party seeking attorneys fees pursuant to the Lanham Act need only show that the underlying litigation was an “exceptional case” by a preponderance of the evidence, and that the district court had erred in imposing a “clear and convincing evidence” standard. The court also held that the district court erred in requiring a showing of bad faith to establish an “exceptional case.” The court accordingly vacated the denial of the prevailing defendant’s motion for attorneys fees and remanded the case for consideration under the correct standards. Full Opinion
Six v. Generations Fed. Credit Union (Duncan 5/31/2018): The Fourth Circuit held that the district court did not abuse its discretion in sanctioning several attorneys for falsely attacking the authenticity of a loan agreement in a bad-faith attempt to defeat a motion to compel arbitration. The court accordingly affirmed the sanctions imposed by the district court. Full Opinion
Cannon v. Vill. of Bald Head Island, N. Carolina, No. 17-1847
Decided: May 30, 2018.
The Fourth Circuit held that the firing of public safety officers over the contents of a private text-message chain did not, for qualified immunity purposes, violate clearly established First Amendment rights, since it was not “beyond debate” that the officers’ speech interests outweighed their employers’ interest in maintaining discipline in the workplace. However, the court held that there was a clearly established Fourteenth Amendment due process right to a name-clearing hearing prior to a public employer’s publication of allegedly fabricated reasons for firing its employees. The court also held that the district court’s denial of a summary judgment motion in a defamation case is neither an appealable “final order” nor so inextricably intertwined with the above First and Fourteenth Amendment issues as to give rise to pendent appellate jurisdiction.
During the summer of 2104, several public safety officers employed by the Village of Bald Head Island communicated with each other through a private text-message chain, in which messages critical of department leadership were interspersed with workout tips, sexual jokes, and memes. This message chain came to the attention of city officials, who decided to terminate the officers. The termination letters, each of which cited, inter alia, “inappropriate electronic communications” and “detrimental personal conduct” as reasons for the officers’ firing, were disclosed to the media, and the town manager sent an email to all department and full-time city employees claiming that the officers were fired for “harassment, sexual harassment, discourteous conduct and inappropriate electronic communications.” At no point during these events were the officers offered a name-clearing hearing.
Several of the officers brought suit, claiming that their firing was retaliation for speech protected by the First Amendment, that the town manager’s publication of the letters and email to city employees damaged their reputations without due process in violation of the Fourteenth Amendment, and that the disclosures were defamatory under state law. The district court rejected defendants’ qualified immunity defense regarding the constitutional claims, and denied their motion for summary judgment on the defamation claim. Defendants sought interlocutory review of these decisions.
In reversing the district court’s denial of qualified immunity on the First Amendment retaliation claim, the Fourth Circuit reasoned that a public employee’s interest in free expression on matters of public concern must be weighed against the government’s interest in maintaining the orderly and efficient provision of public services. Since this involves a balancing test with many factors, it is rarely “clearly established” that government action necessarily fails this test, especially given the impact on order and morale of the allegedly derogatory messages in this case and the heightened importance of discipline among public safety officers relative to other public employees. Therefore, since the firing did not violate a First Amendment right that was “beyond debate,” qualified immunity should not have been denied.
As to the Fourteenth Amendment claim, however, the Fourth Circuit held that prior cases had established a public employee’s liberty interest in preserving their reputation against public disclosure of false reasons for their discharge. Therefore the court reasoned that the due process requirement of a pre-disclosure name-clearing hearing was clearly established, and that the district court had correctly denied qualified immunity to the defendants.
Finally, the Fourth Circuit dismissed defendants’ appeal of the district court’s denial of their summary judgment motion on the defamation claim, reasoning that a summary judgment motion was not a “final order” within the Fourth Circuits’ appellate jurisdiction, and that pendent appellate jurisdiction could not be invoked, because neither of the qualified immunity appeals required resolving the “actual malice” issue on which defendants based their appeal.
Accordingly, the district court’s denial of qualified immunity was reversed as to the First Amendment claim and affirmed as to the Fourteenth Amendment claim. The Fourth Circuit also dismissed the appeal of the district court’s denial of defendants’ summary judgment motion on the defamation claim.