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Groenewold v. Kelley

United States Court of Appeals, Eighth Circuit

April 24, 2018

Gerald H. Groenewold, Ph.D. Plaintiff- Appellant
v.
Robert O. Kelley, Ph.D., president of the University of North Dakota, an institution within the North Dakota University System, in his individual capacity and alternatively and consecutively, in his official capacity; North Dakota State Board of Higher Education, an entity of state statutory and constitutional dimension, which sets policy for all colleges and universities within the North Dakota University System Defendants - Appellees

          Submitted: December 13, 2017

          Appeal from United States District Court for the District of North Dakota - Fargo

          Before WOLLMAN, LOKEN, and MELLOY, Circuit Judges.

          WOLLMAN, CIRCUIT JUDGE.

         Gerald Groenewold, Ph.D., former Director of the Energy and Environmental Research Center (the Center) at the University of North Dakota (University) sued University President Robert O. Kelley, Ph.D., in his individual and official capacities and the North Dakota State Board of Higher Education (Board), challenging the termination of his employment. Dr. Groenewold claimed that defendants retaliated against him for exercising his First Amendment free speech rights and violated his Fourteenth Amendment due process rights. The district court[1] granted defendants' motion to dismiss, holding that Dr. Groenewold failed to allege a constitutional violation. We conclude, based on the facts assumed by the district court, that the motion was properly granted.

         I. Background

         Dr. Groenewold began working full-time for the University in 1983. He served as the director of the Center from 1987 until his termination in 2014. Dr. Groenewold had a good working relationship with the University's presidents until 2010, when conflict arose with President Kelley, who had become president in 2008.

         In August 2010, Dr. Groenewold received a disciplinary letter from President Kelley regarding negative statements that Dr. Groenewold had allegedly made about other University employees. The letter stated that Dr. Groenewold's "continued expressions of contempt [for others] will result in disciplinary action, including possible dismissal from the University of North Dakota." Dr. Groenewold apologized for making inappropriate personal comments, but refused to sign the letter. President Kelley withdrew his threat to dismiss Dr. Groenewold.

         In May 2011, the University unilaterally changed its agreement with the Center's Foundation so that ten percent of the Center's licensing revenue would be deposited into the University's general funding, rather than being sent directly to the Center. The Center's Foundation contested the change, resulting in tension between the Foundation and the University. Dr. Groenewold contends that he tried to be a "broker" between the President's office and the Foundation, a role that "often caused difficulty in his relationship with [President] Kelley."

         Another dispute arose later that year when both the Center and the University's athletic department wanted to acquire the same piece of real estate. Because neither entity had the financial resources to pay for demolition of the property's existing structures, the decision about who would obtain the property was deferred to President Kelley. A North Dakota state legislator familiar with the situation introduced a bill that would require the University's president to defer to the director of the Center in his decision making, essentially giving "Dr. Groenewold a right of first refusal to the use of real estate." Upon learning about the bill, President Kelley threatened to terminate Dr. Groenewold for insubordination and drafted a termination letter that was never completed or delivered. Dr. Groenewold denied having had any involvement with the bill.

         In 2013, Dr. Groenewold failed to timely report the Center's budget deficit to President Kelley. Under the Board's policy, the University is required to report any budget variances or deficits of more than four percent twice each year (once in January and once in June). In January 2013, Center Associate Director Tom Erickson proposed submitting a report anticipating a five to ten percent budget deficit, which he expected to materialize by June 2013. Dr. Groenewold rejected Erickson's proposal and did not submit a report, believing that he would be able to eliminate the deficit by completing a number of projects. The projects remained incomplete five weeks after the reporting deadline, whereupon Dr. Groenewold reported the deficit to President Kelley.

         The Center was still experiencing budget shortfalls in 2014. Associate Director Erickson drafted a memorandum to President Kelley outlining how much money it would take to make the Center whole. Dr. Groenewold also made requests from January 2014 through April 2014 to discuss the issue with President Kelley, all of which Kelley declined.

         On April 16, 2014, the Board's Budget and Finance Committee held a meeting to discuss the Center's budget. The University's Vice President of Finance stated that President Kelley had yet to act on the issue because it had "broader financial implications for the university." The next day, the Grand Forks Herald reported that the Center had had a deficit every year since 2010 and that the Board's Budget Committee Chairman Duaine Espegard was displeased with the Center. According to the article, Espegard opined that the Center has "got to make some changes."

         Dr. Groenewold was aware of a Board policy prohibiting University employees from presenting issues to the full Board or any committee thereof without first going through the President. Notwithstanding that knowledge, he called Espegard to discuss the University's requirement that the Center be responsible for its own legal fees and the conflict regarding the allocation of the University's funding, as well as "to seek his advice as to how best to elevate his perspective on the matter to the attention of the [Board]." Espegard was unavailable at the moment, but promised to call Dr. Groenewold the following week to set up a meeting. Dr. Groenewold then sent Espegard an email, with a copy to President Kelley, stating in part, "We are appreciative of your request to visit with us ...


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