Opinion
Civil No. 3:02-CV-0367-H
August 5, 2002
MEMORANDUM OPINION AND ORDER
Before the Court is Defendant Management Training Corp.'s Motion for Summary Judgment, filed May 31, 2002; and Plaintiff's response thereto, filed July 1, 2002. The Court has jurisdiction pursuant to 28 U.S.C. § 1332. Upon review of the pleadings, briefs, and relevant authorities, the Court is of the opinion for the reasons stated below that Defendant's Motion for Summary Judgment should be GRANTED.
I. BACKGROUND
Plaintiff alleges that he was wrongfully terminated from the Defendant Management Training Corp. ("MTC"), in retaliation for filing a complaint about other employees allegedly illegal behavior in violation of the Texas Whistleblower Act ("TWA"), TEX. GOV'T CODE ANN. § 554.001 et seq. and the Civil Rights of Institutionalized Persons Act ("CRIPA"), 42 U.S.C. § 1997d. MTC manages correctional facilities, and on June 11, 1998 entered into a contract with the Texas Department of Criminal Justice ("TDCJ") to operate and manage the Dawson State Jail in Dallas. Plaintiff was hired as a correctional officer on February 10, 1999 and was promoted twice before his termination in August 3, 2001.
Plaintiff alleges that in January 2001 he was informed that some prison employees were shredding mail addressed to inmates. Both Parties agree that the Plaintiff reported this information and that an investigation ensued although Plaintiff claims that the complaints were "upheld" and Defendant states that there was no support for the allegations. Nevertheless, Plaintiff alleges that following his report, he was harassed by his supervisors and ultimately discharged in retaliation for making the complaint.
Defendant argues that it is entitled to summary judgment for Plaintiff's claims under the TWA and CRIPA because MTC is not a state or local government agency to which liability would extend under TWA and the Plaintiff is not an institutionalized person as is required for a claim under CRIPA. Plaintiff counters that MTC is a branch of a state agency and therefore subject to the TWA. Plaintiff does not address Defendant's arguments regarding the CRIPA claim.
III. SUMMARY JUDGMENT STANDARD
Summary judgment is appropriate where the facts and law as represented in the pleadings, affidavits and other summary judgment evidence show that no reasonable trier of fact could find for the nonmoving party as to any material fact. FED.R.CIV.P. 56; Lujan v. National Wildlife Federation, 497 U.S. 871, 888 (1990); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 323-25 (1986); Innovative Database Systs. v. Morales, 990 F.2d 217 (5th Cir. 1993). "The moving party bears the initial burden of identifying those portions of the pleadings and discovery in the record that it believes demonstrate the absence of a genuine issue of material fact, but is not required to negate elements of the nonmoving party's case." Lynch Properties, Inc. v. Potomac Ins. Co. of Ill., 140 F.3d 622, 625 (5th Cir. 1998) (citing Celotex, 477 U.S. at 322-25). If the movant fails to meet its initial burden, the motion must be denied, regardless of the nonmovant's response. Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994).
If the movant does meet its burden, the nonmovant must go beyond the pleadings and designate specific facts showing that a genuine issue of material fact exists for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Edwards v. Your Credit, Inc., 148 F.3d 427, 431 (5th Cir. 1998). A party opposing summary judgment may not rest on mere conclusory allegations or denials in its pleadings unsupported by specific facts presented in affidavits opposing the motion for summary judgment. FED. R. Civ. P. 56(e); Lujan, 497 U.S. at 888; Hightower v. Texas Hosp. Assn., 65 F.3d 443, 447 (5th Cir. 1995).
In determining whether genuine issues of fact exist, "[f]actual controversies are construed in the light most favorable to the nonmovant, but only if both parties have introduced evidence showing that a controversy exists." Lynch, 140 F.3d at 625; see also Eastman Kodak v. Image Technical Services, 504 U.S. 451 (1992). However, in the absence of any proof, the Court will not assume that the nonmoving party could or would prove the necessary facts. Lynch, 140 F.3d at 625. A party must do more than simply show some "metaphysical doubt as to the material facts." Matsushita, 475 U.S. at 586. "If the record, taken as a whole, could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial." Friou v. Phillips Petroleum Co., 948 F.2d 972, 974 (5th Cir. 1991).
III. ANALYSIS
A. Texas Whistle Blower Act claims
Defendant makes two arguments that the TWA does not apply to the employment relationship in this case. First, Defendant asserts that it is not a state governmental entity and therefore not subject to liability under the TWA. Second, Defendant contends that Plaintiff is not a public employee subject to the protection of the TWA. Plaintiff argues, however, that MTC is a branch of the TDCJ making both the MTC a state governmental entity and Plaintiff a public employee. Both questions will be discussed together below.
Plaintiff urges that MTC is a state government entity, thus making MTC liable under the TWA. The TWA provides in relevant part that "A state or local governmental entity may not suspend or terminate the employment of, or take other adverse personnel action against, a public employee who in good faith reports a violation of law by the employing governmental entity or another public employee to an appropriate law enforcement authority." TEX. GOV'T. CODE ANN. § 554.002(a). A state governmental entity is defined in relevant part as "a board, commission, department, office, or other agency in the executive branch of sate government, created under the constitution or a statute of the state, including an institution of higher education. . . ." TEX. GOV'T. CODE ANN § 554.001(5)(a). There is no cause of action under the TWA for employees of private entities who report illegal activity, also known as private whistleblowing. See Thompson v. El Centro Del Barrio, 905 S.W.2d 356, 359 (Tex.App.-San Antonio 1995, writ denied). Similarly, there is no cause of action for employees of independent contractors of the state government. See Alaniz v. Galena Park Indep. Sch. Dist., 833 S.W.2d 204, 206 (Tex.App.-Houston [14th Dist.] 1992, no writ) (finding no cause of action under the TWA for employee of independent contractor for a school district).
In determining whether MTC was an independent contractor, the Court must look at the contract between TDCJ and MTC to determine whether TDCJ had the right to exercise control over the performance of MTC's work, such as the progress, details and methods. See Thompson v. Travelers Indem. Co., 789 S.W.2d 277, 278 (Tex. 1990). In particular, the Court must recognize certain factors, none more relevant than the other, such as: 1) the independent nature of the contractor's business; 2) the contractor's obligation to furnish necessary tools, supplies, and materials to perform the job; 3) his right to control the progress of work, except as to final results; 4) the time for which he is employed; and 5) the method of payment, whether by time or by the job. See Industrial Indem. Exch. v. Southard, et al., 160 S.W.2d 905, 907 (Tex. 1942). Section B.1.1 of the contract between TDCJ and MTC provided that "The Contractor shall . . . provide all necessary personnel, equipment, materials, supplies and services . . . and otherwise do all things necessary for, or incidental to, the management of the 2000 bed Dawson State Jail. . . ." (Def. App., MTC-000005). In addition, the contract was for three years with two one-year options to extend. (Def. App., MTC-000005). Section B.1.2 provided that the price of MTC work was based upon a detailed pricing proposal and budget. (Def. App., MTC-000005). Section G.3 states that payments would be made when MTC submitted invoices to TDCJ for each calendar month and that the payment schedule would be based on the occupancy level at the jail. (Def. App., MTC-000041). All of this evidence negates the existence of an employer/employee relationship between TDCJ and MTC. The presence of a "Contract Monitor" on site to review administrative and programmatic requirements, or the right to inspect services, as provided for in Sections C.9 and E.1, respectively, does not affect MTC's status as an independent contractor. See Southard, 160 S.W.2d at 907 (noting that when one company supervises an independent contractor, an employer/employee relationship is not necessarily created unless supported by other facts); see also Texas Employers Ins. Ass'n v. Bewley, 560 S.W.2d 147, 150 (Tex.App.-Houston [1st Dist.] 1977, no writ) (finding that exercising some control or supervision over an independent contract does not make him a servant). In addition, MTC's obligation to provide periodic reports to TDCJ also does not mean that MTC was an employee of TDCJ.
Nevertheless, Plaintiff urges the Court to analyze this case as though it involved questions of qualified immunity and apply a functional analysis to determine whether MTC is a state agency for purposes of the TWA. See Citrano v. Allen Correction Ctr., 891 F. Supp. 312, 316-17 (W.D. La. 1995). In Citrano, the Court found that immunity applied to prison guards and correctional officers, despite the fact that they were employed via a contract with a state contractor, because they had functionally the same role as state prison employees employed by the state. See id. at 317. The Court also noted that under common law, the application of immunity weighed less upon whether a person was a public or private employee and more on his or her function. See id. at 318. Plaintiff argues that the contract relationship between the state and MTC is not dispositive of Plaintiff's claim, as the function of MTC and its employees are the same as employees of solely state run prison facilities. Put another way, Plaintiff states that the Court cannot deny MTC's role as a state governmental entity under the TWA and grant it immunity in another cause of action. Plaintiffs clever argument is well taken but ultimately rejected.
The clear language of the statute must govern and this Court is required to apply state substantive law in a diversity case such as this one. See Erie R.R. v. Thompkins, 304 U.S. 64, 78 (1938). The statute clearly provides that recovery is barred for employees who are independent contractors. See TEX. GOV'T CODE. ANN. § 554.001(4). State courts have extended the bar to employees or agents of independent contractors. See Alaniz, 833 S.W.2d at 206. This Court is without the power to apply federal qualified immunity principles in place of the independent contractor analysis required by the TWA. This Court finds that MTC was the independent contractor of TDCJ and therefore, not a state governmental entity subject to liability under the TWA.
The analysis does not end here, however. In some instances, Texas courts have found that the state will exert more control over the employee than the independent contractor, thus making the employee a "public employee" entitled to protection of the statute. See Permian Basin Community Ctrs. for Mental Health and Mental Retardation v. Johns, 951 S.W.2d 497, 501 (Tex.App.-El Paso 1997, no writ). A public employee is defined as "an employee or appointed officer other than an independent contractor who is paid to perform services for a state or local government entity." Id. at 554.001(4).
In Permian Basin, the Court noted that the presence of the independent contractor, here MTC, was "not dispositive of the [Plaintiff's] employment status with [the state agency]." Id. at 501. The Court applied the same factors used in independent contractor analysis to determine whether the Plaintiff was controlled more by the state than the independent contractor. See id. The factors include: 1) whether the state agency, TDCJ, required MTC to select a staff from a pool of state employees; 2) whether TDCJ's personnel manual governed MTC staff conduct; 3) whether Plaintiff was subject to assignment to other TDCJ facilities and if assigned to other TDCJ facilities, would Plaintiff have been paid by TDCJ; 4) whether Plaintiff's employee evaluations were subject to review and modification by TDCJ; 5) whether MTC could unilaterally hire and fire employees; 6) whether a TDCJ employee also supervised Plaintiff's work and was involved in day-to-day activities at Dayton Jail; 7) whether MTC hired, paid wages, and withheld social security and income tax for Plaintiff; 8) whether time sheets had to be submitted to TDCJ; and 9) whether TDCJ was involved in Plaintiff's termination. See id. at 501; see also Alaniz, 833 S.W.2d at 206. The summary judgment evidence shows that Plaintiff was hired by MTC exclusively, that he completed an MTC job application and received his written offer of employment from MTC. (Mot. at 3). MTC paid Plaintiff and withheld taxes from the pay. (Mot. at 7). MTC also provided employment related benefits, such as leave, insurance, and retirement benefits. (Mot. at 6). Plaintiff was supervised by MTC exclusively and MTC had sole authority to supervise Plaintiff. (Mot. at 6-7). MTC also evaluated and disciplined Plaintiff without the input or supervision of TDCJ. (Mot. at 8). MTC, however, was required to adhere to TDCJ's Personnel Manual and other policies. (Resp. at 10). Nevertheless, the policies cannot be said to extinguish the right that MTC had to "control and supervise [Plaintiff's] duties besides the responsibility to hire, pay wages, withhold . . . taxes, and discharge the [Plaintiff]." Alaniz, 833 S.W.2d at 207. The Court finds that the state exercised little if any control over the Plaintiff, thus denying the Plaintiff status as a public employee.
Therefore, the Court finds that because MTC is not a state agency and the Plaintiff was not a public employee, Defendant is entitled to summary judgment on Plaintiff's TWA claim.
B. Civil Rights of Institutionalized Persons Act ("CRIPA") claim
Defendant claims that Plaintiff is not entitled to relief under the CRIPA because Plaintiff is not an institutionalized person. Plaintiff does not respond to this argument. Nevertheless, the Fifth Circuit has ruled that there is no private right of action for employees of entities for institutionalized persons. See Price v. Brittian, 874 F.2d 252, 264 (5th Cir. 1989). Thus, Defendant is entitled to judgment on this cause of action.
CRIPA provides that "No person reporting conditions which may constitute a violation under this subchapter shall be subjection to retaliation in any manner for so reporting." 42 U.S.C. § 1997d.
IV. CONCLUSION
For the reason stated above, Defendant Management Training Corp.'s Motion for Summary Judgment is GRANTED.
SO ORDERED.