No. 94-602
IN THE SUPREME COURT OF THE STATE OF MONTANA
1996
Defendant and Appellant.
APPEAL FROM: District Court of the Eighth Judicial District,
In and for the County of Cascade,
The Honorable Thomas McKittrick, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Dennis McCafferty, James, Gray & McCafferty,
Great Falls, Montana (argued)
For Respondent:
Kenneth R. Olson, Attorney at Law,
Great Falls, Montana (argued)
Heard: October 17, 1995
Submitted: October 17, 1995
Decided: February 26, 1996
Filed:
Justice James C. Nelson delivered the Opinion of the Court.
The State of Montana (State) and its Department of Revenue
(DOR) appeal from the final judgment entered by the Montana Eighth
Judicial District Court, Cascade County, following a jury trial
finding that Shannon Wadsworth (Wadsworth) was wrongfully
terminated from his employment with DOR; finding said wrongful
termination was the proximate cause of the damages suffered by
Wadsworth; and awarding Wadsworth $85,000 in damages. We affirm.
ISSUES
The following are issues on appeal:
1. Did the District Court err in not granting the State's
motion for summary judgment based on Wadsworth's failure to appeal
his petition for judicial review?
2 . Does Wadsworth have a fundamental constitutional right to
the opportunity to pursue employment and, if so, did the State
provide a compelling interest for infringing upon that right?
3. Did the District Court err in allowing irrelevant and
prejudicial evidence of treatment which Wadsworth claimed he
received prior to the termination of his employment?
4. Did the District Court err in allowing irrelevant and
prejudicial evidence of treatment which other DOR employees claimed
they received from DOR?
5 . Did the District Court err in allowing improper opinion,
speculation, and legal conclusion testimony?
BACKGROUND
Wadsworth began working as a real estate appraiser for DOR in
1974. On September 14, 1981, DOR enacted conflict-of-interest rule
81-2 precluding DOR appraisers from engaging in independent fee
appraisals, real estate sales, or brokerage activities during their
off-duty hours. Conflict-of-interest rule 81-2 provides:
2
The very nature of this Division's work requires
that our employees attain a high level of credibility and
objectivity as viewed by the taxpaying public. When
situations arise, such as conflicts of interest, that
jeopardize either requirement, the integrity of the
Department as well as the respective appraisal and
assessor offices is detrimentally affected. Examples of
conflicts of interest include, but are not limited to,
fee appraising, selling real estate (excluding the sale
of one's personal residence or property), and operating
or working for a real estate firm.
In such undertakings, the actual risk of and/or
appearance of impropriety that occurs cannot be
tolerated. Engaging in such activities will bring about
immediate disciplinary action and may result in
termination.
In December of 1981, Wadsworth received a letter informing him of
the conflict-of-interest rule. He filed a grievance claiming that
the rule is discriminatory, unfair, and unconstitutional.
The DOR Grievance Committee concluded that the rule was
"unreasonable and unnecessary." However, on July 27, 1982, the
Director of DOR, Ellen Feaver, rejected the Grievance Committee's
recommendation and found the policy statement to be rational and
reasonable and thus sustained the rule's application. Wadsworth
petitioned the District Court of the Eighth Judicial District,
Cascade County, to review Ellen Feaver's decision and requested the
court enter an order stating that DOR's policy statement in rule
El-2 is unnecessary, unreasonable, and an arbitrary exercise of
police power by DOR.
On October 20, 1986, the District Court ordered a new
grievance hearing to be held because the tapes from the initial
hearing were missing. DOR subsequently held another grievance
hearing and submitted its recommendation to uphold the policy
3
statement. The Director of DOR, Jon LaFaver, adopted the Grievance
Committee's recommendation as DORIS final decision.
In its final decision, DOR denied Wadsworth's grievance and
gave Wadsworth 30 days to divest himself of all interests in fee
appraising, selling real estate, or operating or working for a real
estate firm, and that engaging in such activities would result in
disciplinary action and possible termination. The State then moved
to dismiss Wadsworth's petition for judicial review for lack of
subject matter jurisdiction. The District Court granted the
State's motion and dismissed Wadsworth's petition for judicial
review. Wadsworth did not appeal from this order.
In March of 1989, DOR directed Wadsworth to comply with the
conflict-of-interest rule within 30 days. Wadsworth commenced a
new grievance with DOR complaining of disciplinary action directed
at him for violating the conflict-of-interest rule. The hearing
examiner found that Wadsworth had to divest himself of his private
fee appraisal business or face discharge. In a letter dated
November 27, 1989, the Director of DOR adopted a final decision
wherein he accepted the decision of the hearing officer, confirmed
the policy statement in rule 81-2, sustained Wadsworth's g-day
suspension without pay, and indicated that Wadsworth had 30 days to
divest himself of his interests in fee appraising and selling real
estate. On February 16, 1990, DOR terminated Wadsworth from his
employment for refusing to give up his outside employment
activities.
In November of 1990, Wadsworth filed a wrongful discharge suit
in the District Court of the Eighth Judicial District, Cascade
county . The State moved for summary judgment arguing that as a
matter of law, Wadsworth's termination was not wrongful and
Wadsworth's contention that DOR's conflict-of-interest rule is
contrary to the United States and Montana Constitutions was barred
by his failure to appeal the dismissal of his petition for judicial
review. The District Court denied the State's motion for summary
judgment. The State then filed a motion in limine seeking to
exclude evidence regarding DORIS treatment of Wadsworth prior to
his termination. The District Court again denied the State's
motion and the case proceeded to trial. The State moved to dismiss
Wadsworth's wrongful termination claim as a matter of law at the
close of Wadsworth's case and renewed the motion at the close of
the evidence. The District Court denied the State's motions and
submitted the case to the jury.
In submitting the case to the jury, the District Judge
included instructions on fundamental rights and that fundamental
rights may not be infringed by the State without a showing of a
compelling state interest. The jury rendered a verdict in
Wadsworth's favor awarding him $85,000 in damages. DOR appeals the
final judgment rendered following the jury trial.
DISCUSSION
1. Did the District Court err in not granting the State's
motion for summary judgment based on Wadsworth's failure to appeal
his petition for judicial review?
5
The State argues that the District court erred in not
dismissing as a matter of law, Wadsworth's claim that his
employment was wrongfully terminated. The State claims that
Wadsworth raised his constitutional arguments when he challenged
the application of the conflict-of-interest rule in his petition
for judicial review and therefore the doctrine of res judicata bars
him from raising them again in this matter. Conversely, Wadsworth
argues that he brought the instant case under the Wrongful
Discharge from Employment Act (WDFEA) and thus raises a different
subject matter and different issues from those in his petition for
judicial review. We review a district court's ruling on a motion
for summary judgment de nova. Mead v. M.S.B., Inc. (1994), 264
Mont. 465, 470, 872 P.2d 782, 705.
The State relies on our decision in Matter of Estate of Pegg
(1984), 209 Mont. 71, 680 P.2d 316, as the sole authority for its
argument. In Estate of Pesq, Walter Pegg was killed in a
helicopter crash and died intestate. Pegg's third wife, Virginia,
sought appointment as the personal representative of his estate.
Pegg's ex-wives filed petitions requesting that Virginia be removed
as personal representative of Pegg's estate. The District Court
concluded that there was no evidence to support removal of Virginia
as personal representative and denied the petitions. The ex-wives
again filed a petition for removal of Virginia as personal
representative asserting new grounds for the removal. Estate of
Pecrcr, 680 P.2d at 317-318. The district court orally denied these
petitions. We held that the district court's first order refusing
6
to revoke Virginia's status as administrator of Pegg's estate was
final and therefore appealable. The second petitions merely raised
new grounds for removal and "had all the appearances of unjustified
delaying tactic." Therefore, we did not reach the merits of the
arguments in support of removing Virginia as personal
representative. Estate of Peqg, 680 P.Zd at 320.
In the recent case, City of Bozeman v. AIU Ins. Company
(1995), 900 P.Zd 929, 52 St.Rep. 823, we discussed the doctrine of
res judicata more thoroughly. The doctrine of res judicata
includes the following four elements:
(I) the subject matter of each action must be the same;
(2) the parties or their privies of each action must be
the same;
(3) the issues must be the same and relate to the same
subject matter;
(4) the capacities of the persons must be the same and
relate to the same subject matter and the issues between
them.
Citv of Bozeman, 900 P.2d at 932 (citing State ex rel. Harlem Irr.
Dist. v. Judicial Dist. Court (1995), 271Mont. 129, 894 P.2d 943.)
Wadsworth's present action does not meet the four criteria set
forth in Citv of Bozeman. Wadsworth's WDFEA claim involves a
different subject matter from his petition for judicial review,
different issues from his petition for judicial review, and the
capacities of the parties had changed i.n relation to the subject
matter and the issues between them. Initially, Wadsworth and two
other DOR employees sought judicial review of the Director of DOR's
decision to reverse a three-person panel's conclusion that the
conflict-of-interest policy was unreasonable and sought review of
her subsequent decision to re-implement the policy. In the instant
7
case, after his termination, Wadsworth brought a WDFEA claim
against the State. Although it involves the same parties and some
of the same issues, it is a distinct and separate proceeding not
subject to res judicata.
Wadsworth's WDFEA claim is also distinguishable from Estate of
Pega in that it did not involve an unjustified delaying action nor
was it a second action requesting the same relief relying on new
grounds. Accordingly, as a matter of law, the District Court
correctly denied the State's motion for summary judgment.
2 . Whether Wadsworth has a fundamental constitutional right
to the opportunity to pursue employment and, if so, whether the
State provided a compelling interest for infringing upon that
right?
The State argues that the District Court incorrectly referred
questions of law to the jury to determine. The State further
argues that there are no questions of fact implicit in the analysis
of whether the conflict-of-interest rule unconstitutionally
infringed upon the right asserted by Wadsworth, only a question of
law for the judge to determine.
Sections 26-l-201 and 26-l-202, MCA, delineate the province of
the court and the jury. These sections provide as follows:
26-l-201. Questions of law. Except as provided in
Article II, section 7, of the Montana constitution, all
questions of law, including the admissibility of
testimony, the facts preliminary to such admission, the
construction of statutes and other writings, and other
rules of evidence, must be decided by the court.
26-l-202. Questions of fact. If a trial is by jury, all
questions of fact other than those mentioned in 26-l-201
must be decided by the jury, and all evidence thereon
must be addressed to them, except as otherwise provided
by law. If the trial of a question of fact is not by
8
jury, all evidence thereon must be addressed to the trial
court, which shall decide such question.
Sections 25-7-102 and 25-7-103, MCA, similarly set forth issues of
law to be decided by courts and issues of fact to be decided by
juries. Section 26-l-201, MCA, states that it is the province of
the court to construe statutes and other writings. Montana's
constitution clearly constitutes an "other writing," the
interpretation of which is appropriately within the province of the
judge not the jury.
For example, in State v. Poncelet (19801, 187 Mont. 528, 610
P.2d 698, we upheld a trial court's ruling not to allow a witness
to testify about the constitutionality of a law because
[tlhe interpretation and application of the United States
Constitution was a question of law and not a fact in
issue. It was a determination to be made by the trial
judge within his statutory powers.
Similarly, we have held a defendant's attack on the
constitutionality of Montana's compulsory automobile liability
insurance statutes presented only questions of law. State v. Turk
(19821, 197 Mont. 311, 317, 643 P.2d 224, 228. A determination of
the constitutionality of the statutes required an analysis of what
rights were involved and the corresponding level of scrutiny to
apply to the liability insurance statutes. Because the liability
insurance statutes burdened a constitutional right but not a
fundamental constitutional right, the State only had to show that
the statutes were rationally related to a legitimate governmental
objective. Turk
-I 643 P.2d at 227. We held that this analysis
exclusively presented questions of law for the judge's
9
determination. Turk
-1 643 P.2d at 228; see also People v. Zinn (Co.
19931, 843 P.Zd 1351, 1354 (whether challenged legislation bears a
reasonable relationship to legitimate government interests is a
question of law); State v. Holmes (Wis. 1982), 315 N.W.2d 703, 708
n.7 (constitutional questions are questions of law); Racine Steel
Castings v. Hardy (Wis. 1988), 426 N.W.2d 33, 35 (constitutionality
of a statute is a question of law); Valdez v. Gunter (10th Cir.
1993), 988 F.2d 91, 93, cert. denied 114 S.Ct. 151, 126 L.Ed.2d 113
(1993) (whether asserted right is a fundamental right is a question
of law)
Moreover, in State v. Pastos (1994), 269 Mont. 43, 47, 887
P.2d 199, 202, we recognized that "when the government intrudes
upon a fundamental right, any compelling state interest for doing
so must be closely tailored to effectuate only that compelling
interest." We concluded that the compelling state interest
analysis is a question of law. Pastos, 887 P.2d at 202. In
Pastos, the legal question was whether there was a compelling state
interest which justified a routine, administrative inventory search
of the personal property on, or in the possession of, the arrestee
at the station house following a lawful arrest. Pastos, 887 P.2d
at 202.
The Fifth Circuit Court of Appeals has also held that the
application of the strict scrutiny test is a question of law.
Woodland v. City of Houston (5th Cir. 1991), 940 F.2d 134, 138. In
Woodland, the circuit court stated that the question of whether the
city police department's interest in pre-employment polygraph
10
testing outweighed the applicant's privacy interest was a question
of law and should not have been submitted to the jury. Woodland,
940 F.2d at 138; see also Evans v. Romer (Co. 1993), 854 P.2d 1270,
cert. denied 114 S.Ct. 419, 126 L.Ed.2d 365 (1993) (holding that
the question of whether an existing constitutional right is
infringed is strictly a question of law) (citing Lafferty v. Cook
(10th Cir. 19911, 949 F.2d 1546, 1550, cert. denied, 504 U.S. 911
(1992)); Thompson v. Keohane (1995), 116 S.Ct. 457, 460 (noting the
declaration that "in custody" question is one of law may guide
police, unify precedent, and stabilize the law).
In the instant case, Wadsworth claimed that the conflict-of-
interest rule unconstitutionally infringed upon his fundamental
right to the opportunity to pursue employment. Wadsworth presented
a question of law--i.e. whether he had a fundamental constitutional
right and whether the State showed a compelling interest for
infringing upon that right. Thus, the question before the District
Court was a legal issue containing no implicit questions of fact.
Accordingly, we review as a conclusion of law, the District
Court's determination of whether the right Wadsworth asserted was
a constitutionally protected right, and if constitutionally
protected, whether it was a fundamental right, and if it was a
fundamental right, whether the State provided a compelling interest
for infringing upon it. We review questions of law de nova to
determine whether the court's interpretation of the law is correct.
Carbon County v. Union Reserve Coal Co., Inc. (1995), 271 Mont.
11
459, 469, 898 P.2d 680, 686; Steer, Inc. v. Department of Revenue
(1990), 245 Mont. 410, 474-75, 803 P.2d 601, 603.
Here, the District Court interpreted the law in its
instructions to the jury as follows:
Instruction number 15: All persons have as an
inalienable right the opportunity of pursuing life's
basic necessities. The right to terminate an employee is
not absolute but subject to exercise in accordance with
constitutional provisions.
Instruction number 9: You are instructed that the
right: to pursue life's basic necessities; to acquire,
possess and protect property; to individual privacy are
fundamental rights. Said rights shall not be infringed
by the State without the showing of compelling State
interest.
However, the District Court erred in submitting to the jury,
questions of law that the court itself should have determined. We
hold this to be harmless error, in that, as we shall point out, the
jury came to the correct conclusion. Accordingly, we review the
jury instructions de nova, as the statements of the law applicable
to this case.
Wadsworth asserts that Article II, section 3 of the 1972
Montana Constitution establishes the inalienable right to pursue
life's basic necessities which right necessarily includes the
opportunity to earn a living, and that DOR wrongfully terminated
him because he asserted this constitutionally protected right.
Article II of Montana's constitution, entitled Declaration of
Rights, enumerates various rights, among which are certain
"inalienable rights" set forth at section 3. That section
provides:
12
All persons are born free and have certain
inalienable rights. They include the right to a clean
and healthful environment and the rights of pursuing
life's basic necessities, enjoying and defending their
lives and liberties, acquiring, possessing and protecting
property, and seeking their safety, health and happiness
in all lawful ways. In enjoying these rights, all
persons recognize corresponding responsibilities.
While section 3 does not refer to "fundamental rights" per se,
nevertheless, we have held a right may be "fundamental" under
Montana's constitution if the right is either found in the
Declaration of Rights or is a right "without which other
constitutionally guaranteed rights would have little meaning."
Butte v. Community Union (19861, 219 Mont. 426, 430, 712 P.2d 1309,
1311-13 (holding that Montana's constitution does not create a
right to welfare). The inalienable right to pursue life's basic
necessities is stated in the Declaration of Rights and is therefore
a fundamental right.
While not specifically enumerated in the terms of Article II,
section 3 of Montana's constitution, the opportunity to pursue
employment is, nonetheless, necessary to enjoy the right to pursue
life's basic necessities. See Globe Newspaper Co. v. Superior
Court for Norfolk County (1982), 457 U.S. 596, 604, 102 S.Ct. 2613,
2618-19, 73 L.Ed.2d 248, 255 (First Amendment encompasses those
rights that, while not specifically enumerated in the very terms of
the Amendment, are nonetheless necessary to enjoyment of other
First Amendment rights). As a practical matter, employment serves
not only to provide income for the most basic of life's
necessities, such as food, clothing, and shelter for the worker and
the worker's family, but for many, if not most, employment also
13
provides their only means to secure other essentials of modern
life, including health and medical insurance, retirement, and day
care. We conclude that without the right to the opportunity to
pursue employment, the right to pursue life's basic necessities
would have little meaning, because it is primarily through work and
employment that one exercises and enjoys this latter fundamental
constitutional right. Accordingly, we hold that the opportunity to
pursue employment, while not specifically enumerated as a
fundamental constitutional right under Article II, section 3 of
Montana's constitution is, notwithstanding, necessarily encompassed
within it and is itself a fundamental right because it is a right
"without which other constitutionally guaranteed rights would have
little meaning." Butte, 712 P.Zd at 1311. We also hold that the
District Court correctly interpreted the law in its Instructions
number I5 and 9.
This interpretation of Montana's constitution is supported by
the decisions of other jurisdictions which have held their state
constitutions to encompass a fundamental right to the opportunity
to pursue employment. For example, the right to pursue any proper
vocation under the personal liberty clause of Indiana's state
constitution is a fundamental right. Kirtley v. State (Ind. 1949),
84 N.E.2d 712, 714 (holding that a statute regarding the sale of
tickets interfered with the liberties and the personal and property
rights of a ticket owner). In Kirtlev, the Indiana Supreme Court
construed Indiana's personal liberty clause to confer not only
freedom from servitude and restraint, but also "the right of
14
everyone to be free in the use of their powers in the pursuit of
happiness in such calling as they may choose subject only to the
restraints necessary to secure the common welfare."
Similarly, in Florida, V [tl he right to work, earn a living and
acquire and possess property from the fruits of one's labor is an
inalienable right." Lee v. Delmar (Fla. 1953), 66 So.2d 252, 255.
In Lee, the Florida Supreme Court held that a resolution
prohibiting a real estate salesperson from operating part-time was
invalid as depriving the salesperson of his inalienable right to
work and earn a living and as an excess of power granted to the
Real Estate Commission. Lee, 66 So.2d at 255. In Town of Milton
v. Civil Service Commission (Mass. 19741, 312 N.E.2d 188, 192,
citing Truax v. Raich (19151, 239 U.S. 33, 41, 36 S.Ct. 7, 10, 60
L.Ed. 131, 135, the Supreme Court of Massachusetts stated that
I'[ilt is certainly true that the opportunity to earn a living is a
fundamental right in our society." But the court also clarified
that 'I [ilt is an equally basic axiom that there is no right to
public employment." Milton, 312 N.E.2d at 192 (discussing
durational residency requirements).
Likewise, we distinguish the right to a particular job or
employment from the right to pursue life's basic necessities
through employment. "While the legislature may elect not to confer
a property interest in [public] employment, it may not
constitutionally authorize the deprivation of such an interest,
once conferred, without appropriate procedural safeguards." Boreen
v. Christensen (1994), 267 Mont. 405, 410, 884 P.2d 761, 764
15
(quoting Cleveland Board of Education v. Loudermill (1985), 478
U.S. 532, 541, 105 S.Ct. 1487, 1493, 84 L.Ed.2d 494, 503). 1n
essence, absent a contract, policy, regulation, or statute
providing a specified term of employment, an employee does not have
a property interest in a particular job. Boreen, 884 P.2d at 770.
The Oregon Supreme Court made this germane distinction in Minielly
v. State (Or. 1966), 411 P.2d 69, 73, by stating:
The conclusion to be drawn . . would appear that while
a person does not have a constitutional right to be
employed by the public, the government is not free to
place unconstitutional prerequisites upon the securing of
public employment nor does it have the right to ignore
the constitution if it desires to terminate such
employment.
Accordingly, while Article II, section 3 of Montana's constitution
encompasses the right to the opportunity to pursue employment
generally as a necessary incident of the fundamental right to
pursue life's basic necessities, that provision of our constitution
does not, without more, grant a right or property interest in any
particular job or employment.
Wadsworth makes no claim to the contrary. Wadsworth does not
claim a constitutional right to his state job, but instead claims
that by pursuing employment in addition to his job with the State,
he has the constitutional right to pursue life's basic necessities,
to acquire property, and to be free from the State's interference
with his lawful activities. Wadsworth claims that the State has
infringed these fundamental rights, not that it deprived him of a
right to a specific job.
16
The State argues that because cities or counties may restrict
employees' ability to work in outside jobs by placing restrictions
on the residency of their employees, DOR may similarly restrict
Wadsworth's ability to pursue employment by placing restrictions on
the type of outside employment he may pursue. It is true that
cities may place police officers in a separate category and impose
residence requirements on the officers because the duties and
interests protected by police are of a sufficiently distinct
character from those of other governmental employees. Brenckle v.
Township of Shaler (Pa. 1971), 281 A.2d 920, 922 (a moonlighting
case decided on right to travel grounds). However, cases
discussing residency requirements have no application to the
instant case because they hinge on the right to travel and do not
discuss the right to life's basic necessities or the right to the
opportunity to pursue employment. See Shapiro v. Thompson (19651,
394 U.S. 618, 89 S.Ct. 1322, 22 L.Ed.2d 600; Memorial Hospital v.
Maricopa County (1974), 415 U.S. 250, 94 S.Ct. 1076, 39 L.Ed.2d
306; Cole v. Housing Authority of City of Newport (1st Cir. 1970),
435 F.2d 807; Krzewinski v. Kugler (D.N.J. 1972), 338 F.Supp. 492
(compelling state interest existed in requiring police officers to
reside in the municipality).
The State also cites a California Court of Appeals case in
which an employee challenged a rule limiting the number of hours
she could work in outside employment on the basis that the rule
constituted an irrebuttable presumption. Baity v. Los Angeles
County Civil Service Commission (19801, 162 Cal.Rptr. 812, 813.
17
The court in &&y did not analyze the rule in terms of its
infringement upon the opportunity to pursue employment, but,
instead, analyzed the rule in terms of an allegedly unlawful
irrebuttable presumption. Moreover, the court did not acknowledge
that any rights were involved in the opportunity to pursue
employment and therefore found the county's ability to restrict
employment to be nearly unfettered.
Having concluded that the opportunity to pursue employment is
a fundamental right as a necessary incident to the fundamental
right to pursue life's basic necessities, we must next determine
the level of scrutiny to apply to the infringement of that right.
In determining what level of scrutiny to apply to legislation or to
a rule in question, we first determine what rights are involved.
Eastman v. Atlantic Richfield Co. (1989), 237 Mont. 332, 337, 777
P.2d 862, 865. "The extent to which the Court's scrutiny is
heightened depends both on the nature of the interest and the
degree to which it is infringed." Memorial Hosoital, 415 U.S. at
254-56 (holding that a classification unconstitutionally penalized
persons who exercised their right to interstate migration);
Laurence H. Tribe, American Constitutional Law 5 16-33, at 1610 (2d
ed. 1987). Thus the nature of the individual interest affected
dictates which standard of review to apply. Matter of C.H. (1984),
210 Mont. 184, 198, 683 P.2d 931, 938. The most stringent
standard, strict scrutiny, is imposed when the action complained of
interferes with the exercise of a fundamental right or
discriminates against a suspect class. Gulbrandson v. Carey
18
(1995), 901 P.2d 573, 579, 52 St.Rep. 843, 846 (citing Eastman, 772
P.2d at 865). Strict scrutiny of a statute is required only when
the classification impermissibly interferes with the exercise of a
fundamental right. Arneson v. State, By Dept. of Admin. (1993)‘
262 Mont. 269, 272, 864 P.2d 1245, 1247.
Strict scrutiny of a legislative act requires the government
to show a compelling state interest for its action. Shauiro, 394
U.S. at 634. When the government intrudes upon a fundamental
right, any compelling state interest for doing so must be closely
tailored to effectuate only that compelling state interest.
Pastos, 887 P.2d at 202 (citing Zablocki v. Redhail (1978), 434
U.S. 374, 98 S.Ct. 673, 54 L.Ed.Zd 618). In addition to the
necessity that the State show a compelling state interest for
invasion of a fundamental right, the State, to sustain the validity
of such invasion, must also show that the choice of legislative
action is the least onerous path that can be taken to achieve the
state objective. Pfost v. State (1985), 219 Mont. 206, 216, 713
P.2d 495, 505.
In Robinson, et al. V. Cahill (N.J. 1973), 303 A.2d 273, 282,
New Jersey Supreme Court Chief Justice Weintraub notes that it is
difficult to define "fundamental right" and that
if a right is somehow found to be 'fundamental,' there
remains the question as to what State interest is
'compelling' and there, too, we find little, if any,
light. Mechanical approaches to the delicate problem of
judicial intervention under either the equal protection
or the due process clauses may only divert a court from
the meritorious issue or delay consideration of it.
Ultimately, a court must weigh the nature of the
restraint or the denial against the apparent public
justification, and decide whether the State action is
19
arbitrary. 1n that process, if the circumstances
sensibly so require, the court may call upon the State to
demonstrate the existence of a sufficient public need for
the restraint or the denial.
In the instant case, while DORIS conflict-of-interest policy
or rule is at issue rather than a statute, we, nevertheless, apply
strict scrutiny analysis since the operation of that rule
implicates Wadsworth's fundamental right to the opportunity to
pursue employment. The constitutionality of the conflict-of-
interest rule itself is not the issue, but rather whether the State
has infringed Wadsworth's fundamental right without providing a
compelling interest for doing so.
As we have held, employment is a necessary means to pursue
life's basic necessities, without which the latter fundamental
constitutional right could not be enjoyed. As such, the right to
the opportunity to pursue employment is itself a fundamental right
and is encompassed within the right to pursue life's basic
necessitites as declared under Article II, section 3 of Montana's
constitution. Because the opportunity to work and to make a living
is a fundamental right, it is incumbent upon the state to
demonstrate a compelling interest before it may constitutionally
infringe upon that right. Necessarily, demonstrating a compelling
interest entails something more than simply saying it is so.
Based on the record established in the trial court, we
conclude that, as a matter of law, the State failed to demonstrate
a compelling interest for the conflict-of-interest rule restricting
Wadsworth's ability to pursue employment opportunities and thus
pursue life's basic necessities. Simply because the State alleges
20
a compelling interest, does not obviate the necessity that the
State prove the compelling interest by competent evidence.
Here, the State adopted the conflict-of-interest rule for the
singular purpose of avoiding the appearance of impropriety of real
estate appraisers. The evidence at trial established that there
were no complaints about any appearance of impropriety when State
appraisers appraised property outside of their DOR employment. Mr.
Groepper, the Administrator of the Property Assessment Division,
stated that none of the grievants nor anyone else had been or was
being accused of any actual wrongdoing. The only semblance of a
complaint consisted of a letter that Paul Pistoria wrote DOR
stating that Wadsworth handed out his private business card while
working for the Department. DOR presented no case in which an
appearance of impropriety arose; DOR could not demonstrate that
Wadsworth jeopardized the integrity of or detrimentally affected
DOR or the appraisal or assessor offices in any way. In fact, no
one ever expressed a lack of confidence in the integrity of the
Property Tax Division or expressed a belief that outside employment
activities undermined public confidence. Even Ellen Feaver, the
Director of DOR who rejected the Grievance Committee's
recommendation that the conflict-of-interest rule was unreasonable
and sustained the rule's application, testified that she was aware
of no incident of a DOR appraiser compromising the public trust on
account of outside employment activities. She also testified that
she had not considered the rule's impact on individual appraisers
nor did she consider 5 2-15-112(f), MCA, which limits the
21
rulemaking powers of the department heads to "statements concerning
only the internal management of the agency and not affecting
private rights or procedures available to the public."
Dennis Burr, the DOR Administrator of the Property Tax
Division, issued the conflict-of-interest rule but never enforced
it. Nick Lazanas, the Director of the Cascade County Appraiser
Office also chose not to enforce the rule; he did not believe in it
nor did he see a reason for it. Additionally, the State's expert
witness, Gaylord Aldinger, a member of the International Order of
Assessing Officers, admitted that his organization's code of ethics
did not preclude outside employment activities, and that in his
state, he was not aware of any abuse of official duties by the
activities in question. Moreover, the record is ambivalent as to
whether the State considered the relevant constitutional provision
before it applied the conflict-of-interest policy.
That is not to say that the State could never demonstrate a
compelling interest for the conflict-of-interest rule or for some
other rule restricting the outside employment of its employees. In
this case, on the record here and as a matter of law, it simply did
not.
In this regard we note that Article XIII, section 4 of
Montana's constitution requires the legislature to provide a code
of ethics prohibiting conflict between public duty and private
interest for, among others, state and local employees. We also
note that the legislature has, pursuant to that constitutional
mandate, enacted standards of conduct for public officers and
22
employees, including a code of ethics, at Title 2, Chapter 2, MCA.
Neither DOR nor Wadsworth raise any issue as to the application of
either Article XIII, section 4 or those standards of conduct and
code of ethics in this appeal. Notwithstanding, in the interest of
completeness, we acknowledge both this constitutional provision and
its implementing statutes and point out that there was no
allegation made or evidence in this case that Wadsworth's conduct
was at anytime ever in violation of these statutes.
We hold that, because the State did not demonstrate a
compelling interest for applying the conflict-of-interest rule at
issue here, the State wrongfully terminated Wadsworth's employment.
In this regard, Wadsworth brought his claim under Montana's
WDFEA, asserting that the conflict-of-interest rule violated public
policy because it violated his fundamental right to pursue life's
basic necessities without a compelling state interest for doing so.
In 1987, the Montana Legislature enacted the WDFEA establishing
three elements of wrongful discharge. See 5 39-2-904, MCA.
Section 39-2-904, MCA, states that
A discharge is wrongful only if:
(1) it was in retaliation for the employee's
refusal to violate public policy or for reporting a
violation of public policy;
(2) the discharge was not for good cause and the
employee had completed the employer's probationary period
of employment; or
(3) the employer violated the express provisions of
its own written personnel policy.
Moreover, § 39-2-903(7), MCA, defines public policy as "a policy in
effect at the time of the discharge concerning the public health,
23
safety, or welfare established by constitutional provision,
statute, or administrative rule."
Wadsworth contends that DOR terminated his employment in
retaliation for his refusal to abide by a rule that was in
contravention of public policy. Wadsworth asserts that the public
policy in effect at the time of his discharge was the policy
established by constitutional provision guaranteeing each person
the right to pursue life's basic necessities by earning a living.
We agree.
Public policy is often based on constitutional provisions,
especially those which on their face, create inalienable or
fundamental rights. See Gantt v. Sentry Ins. (Cal. 1992), 824 P.2d
680, 687; see also Foley v. Interactive Data Corp. (Cal. 1988), 765
P.2d 373. For example, in Gantt the Supreme Court of California
noted that public policy "must involve a matter that affects
society at large rather than a purely personal or proprietary
interest of the plaintiff or employer; in addition, the policy must
be fundamental, substantial, and well established at the time of
discharge." Gantt, 824 P.2d at 684. In discussing the public
policy exception to wrongful discharge, the court further noted
that:
A public policy exception carefully tethered to
fundamental policies that are delineated in
constitutional or statutory provisions strikes the proper
balance among interests of employers, employees and the
public. The employer is bound, at a minimum, to know the
fundamental public policies of the state and nation as
expressed in their constitutions and statutes; so
limited, the public policy exception presents no
impediment to employers that operate within the bounds of
law. Employees are protected against employer actions
24
that contravene fundamental state policy. And society's
interests are served through a more stable job market, in
which its most important policies are safeguarded.
Gantt, 824 P.2d at 688.
Article II, section 3 of Montana's constitution explicitly
protects the right to pursue life's basic necessities as an
inalienable or fundamental right, which, as stated above, includes
the right to the opportunity to pursue employment as a necessary
incident. Accordingly, Montana's public policy in this regard is
set forth in Article II, section 3.
Since we have determined that, on the record here, there was
no demonstrated compelling interest for the State's conflict-of-
interest rule, it follows that the rule violated the public policy
in favor of the right to pursue life's basic necessities protected
under Montana's constitution. Accordingly, the State's termination
of Wadsworth in retaliation for his refusal to abide by a rule that
was in contravention of the constitution violated the WDFEA.
3. Did the District Court err in allowing irrelevant and
prejudicial evidence of treatment which Wadsworth claimed he
received prior to the termination of his employment?
4. Did the District Court err in allowing irrelevant and
prejudicial evidence of treatment which other DOR employees claimed
they received from the Department?
5. Did the District Court err in allowing improper opinion,
speculation, and legal conclusion testimony?
Because we hold that the State did not provide a compelling
interest for its conflict-of-interest rule, and therefore
wrongfully terminated Wadsworth in retaliation for his refusal to
violate public policy, we need not address issues 3, 4, or 5. In
order for this Court to reverse the District Court, the State had
25
to show that the evidence complained of violated its substantial
rights. The State was not able to do so because the parties agreed
that Wadsworth was terminated for refusing to comply with the
conflict-of-interest rule and was not terminated for any reasons
pertaining to his treatment on the job prior to his termination.
In short, there were no factual disputes as to why Wadsworth was
fired. Accordingly, notwithstanding the District Court's alleged
error in admitting irrelevant evidence, such error, if any, was
harmless because it did not affect the substantial rights of the
State. See Abbey v. City of Billings Police Com'n (19941, 268
Mont. 354, 364, 886 P.2d 922, 928.
Moreover, the State made no showing of how the error may have
prejudiced the amount of damages the jury awarded. The State could
not have made such a showing because the WDFEA constrains the
extent to which damages may be awarded to lost wages, fringe
benefits, and the interest thereon, for a period not to exceed four
years from the date of discharge. Therefore, we conclude that
there was no error that affected the substantial rights of the
State.
Affirmed.
21
Justice Terry N. Trieweiler specially concurring.
I concur with the majority's resolution of Issues numbered I,
3, 4, and 5. I specially concur with the majority's resolution of
Issue 2 because although I agree with the result arrived at in that
section of the Court's opinion, I disagree that the District Court
erred by submitting underlying factual issues to the jury.
The majority correctly concludes that the opportunity to
pursue employment is one of life's basic necessities, and
therefore, a fundamental right guaranteed by Article II, Section 3,
of the Montana Constitution. I also agree that before the State
can interfere with that fundamental right, it must establish a
compelling state interest for doing so and that whether a
particular interest, if proven, is "compelling" is a question of
law. However, where the very facts which form the basis for the
State's alleged interest are disputed, the resolution of that
dispute involves a question of fact.
For example, in this case, the State alleged that its conflict
of interest rule served the interest of avoiding the appearance of
impropriety by real estate appraisers. Had that fact been
established by competent evidence, the determination of whether
that fact established a compelling state interest would have been
an issue of law. However Wadsworth, and numerous others who were
qualified by training and experience, testified that the conflict
of interest rule was unnecessary and bore no relationship to public
confidence in real estate appraisers. Therefore, whether there was
any relationship between the conflict of interest rule and public
28
confidence raised an issue of fact which must necessarily be
decided by the finder of fact--in this case, the jury. As pointed
out by the majority, 5 26-l-202, MCA, provides as follows:
If a trial is by jury, all questions of fact other than
those mentioned in 26-l-201 must be decided by the jury,
and all evidence thereon must be addressed to them,
except as otherwise provided by law. If the trial of a
question of fact is not by jury, all evidence thereon
must be addressed to the trial court, which shall decide
such question.
That underlying questions of fact were at issue is evident
from the majority's opinion. In analyzing whether proof was
offered of a compelling state interest, the majority opinion
repeatedly refers to the evidence at trial. Evidence is considered
for the sole purpose of resolving factual issues which are the
unique responsibility of juries or the district court, as the case
may be.
What the majority has, in effect, held is that in every case
involving a constitutional issue with an underlying factual
component, this Court is in the best position to resolve the
factual issue denovo on appeal. The majority's position is similar
to the position of the majority on the Second Circuit Court of
Appeals in United States v. A Motion Picture Film Entitled “I Am Curious-Yellow”
(2d Cir. 19681, 404 F.2d 196. In that case, a jury, after being
instructed on the constitutional standards for judging obscenity,
concluded that the motion picture in question was obscene. The
Second Circuit Court of Appeals concluded that:
[11n our view obscenity velnon is not an issue of fact
with respect to which the jury's finding has its usual
29
conclusive effect. It is rather an issue of constitu-
tional law that must eventually be decided by the court.
AMotionPictureFilm, 404 F.2d at 199.
Based on its own review of the motion picture, the majority of
that court concluded that it was not obscene because it did not
satisfy the first two parts of the three-part test set forth by the
U.S. Supreme Court.
In his dissent from the majority's disregard for the jury's
fact-finding function, Chief Judge Lumbard made the following
remarks, which I believe apply to the majority's disregard for the
jury's fact-finding function in this case:
My colleagues give no satisfactory explanation why
jurors are not as qualified as they to pass upon such
questions. The conclusion is inescapable that they
really think that the issue of obscenity can be entrusted
to juries only if the judges themselves (or, as here, a
majority of them) think the matters in question go beyond
the limits allowed by law. I had not supposed that only
those who wear federal judicial robes are qualified to
decide whether a motion picture has any redeeming social
value.
. .
But the majority would take away from the jury the
power to pass on these not too difficult and complicated
questions by saying that obscenity is "an issue of
constitutional law" rather than an issue of fact with
respect to which the jury's finding has its usual
conclusive effect. To me this simply means that juries
are not to be trusted where a majority of the judges
disagree with them.
. . . There is no reason to suspect that judges are
in any better position to pass judgment on these matters
than are jurors. .
With due deference to the very considerable
intellectual attainments of my colleagues, I submit that
when it comes to a question of what goes beyond the
permissible in arousing prurient interest in sex, the
30
verdict of a jury of twelve men and women is a far better
and more accurate reflection of community standards and
social value. The jurors are drawn from all walks of
life and their less pretentious positions in the
community qualify them to answer the questions put to
them by Judge Murphy at least as well as circuit judges
in their middle sixties who celebrate in the ivory towers
of the judiciary.
A Motion Picture Film, 404 F.2d at 203-04 (Lumbard, J., dissenting)
(footnotes omitted).
Chief Judge Lumbard's dissent was cited at length and adopted
by the Supreme Court of Wisconsin in Courtv.State (1971), 188 N.W.2d
475, where that court struggled with the proper scope of review of
a jury verdict that printed material was obscene
After noting Chief Judge Lumbard's dissent, that court held
that:
We agree with Mr. Chief Judge Lumbard's dissent and
adopt the principle which he espoused. The determination
of obscenity is a factual matter to be resolved by a
finder of fact following constitutional guidelines,
subject to review by an appellant [sic1 court which seeks
to determine merely whether the evidence underpinning the
verdict was sufficient in view of the record as a whole.
Court, 188 N.W.2d at 483.
In Collier v. Civil Service Commission (Tex. Ct. App. 1989) , 764 S.W.2d
364, the Texas Court of Appeals was asked to decide whether
"nepotism" rules adopted by the Civil Service Commission for the
city of Wichita Falls violated the equal protection clause of the
Texas Constitution. The nepotism rule provided that no person
could be employed by the fire department if a member of that
person's immediate family was already employed by the department.
The city contended that the rule was necessary in order to avoid
31
impairment of one firefighter's judgment when placed in a situation
where a member of that person's family was in peril
The Texas court held that to decide the constitutional issue
raised by the petitioners, several fact issues must first be
resolved, including whether the rule advances legitimate government
objectives. (A similar rational basis test would be applied by our
Court if a fundamental interest was not at issue.) In holding that
underlying factual issues must be resolved by the finder of fact
before the constitutional issue could be resolved, the Texas court
stated as follows:
Deciding the constitutionality of a statute necessarily
involves several related fact questions. See Pine,
[Speculation and Reality: The Role of Facts in Judicial Protection of Fundamental
Rights, 136 U.Pa.L.Rev. 655 (1988)1, 666-67. For example,
Wichita Falls argues the nepotism rule will prevent a
firefighter's unavoidable impairment of judgment in a
situation where a member of his immediate family is
involved in a perilous situation. Appellants argue
strong emotional bonds exist between firefighters even if
they are not related by blood or marriage. These issues
are relevant to whether the nepotism rule will advance
the governmental objective of improving the safety of the
fire department, but this court does not have any special
knowledge of emotional ties between firefighters or the
dangers found within burning buildings. This question
involves social and emotional issues, but it is still a
question of fact. Social facts may be developed through
expert testimony, "Brandeis briefs" or requests for
judicial notice. Pine, supra at 662-63. We are unwilling
to base our decision on the unsupported generalizations
contained in the briefs.
The trial court did not make any specific findings
of fact; therefore, we do not consider the standard of
review for findings of fact in a case involving
constitutional rights. See generally, Louis, Allocating Adjudicative
Decision Making Authority Between the Trial and Appellate Levels: A Unified View
of the Scope of Review, The Judge/Jury Question, and Procedural Discretion, 6 4
N.C.L.Rev. 993 (1986). Appellants should have the
opportunity to introduce evidence to support their
32
challenge to the nepotism rule. Appellants' third point
of error is sustained.
Collier, 764 S.W.2d at 366 (citations omitted).
Likewise, in this case, a factual issue was raised by the
State's contention that its conflict of interest rule was necessary
in order to retain public confidence in its real estate appraisers.
Before the District Court or this Court could decide whether that
need constituted a compelling state interest, someone first had to
decide whether the allegation was true. Under our statutory system
for resolving factual issues, that responsibility belonged to the
jury. Therefore, I would conclude that the District Court did not
err when it submitted that issue to the jury based on the proper
instructions.
I otherwise agree with the majority opinion, including its
conclusion that if the District Court did err by submitting issues
regarding a compelling state interest to the jury, the error was
harmless.
JU ice
Justice William E. Hunt, Sr., joins in the foregoing concurring
opinion.
33
Justice Charles E. Erdmann specially concurring.
I join in the majority's opinion on Issues 1, 3, 4, and 5. I
write separately in order to state that my concurrence on Issue 2
is limited to the final result as I cannot agree with the Court's
reasoning and analysis with respect to the nature of the right at
issue in this case.
The State failed to present evidence that Wadsworth's
activities as a private real estate appraiser had in fact harmed
the DOR or undermined the public's confidence in the tax appraisal
system. I would therefore affirm the District Court's determina-
tion that Wadsworth's discharge was wrongful based on the fact that
the State failed to provide any evidence to support its conflict of
interest allegation. The State's speculation that a conflict of
interest existed was not sufficient reason to terminate Wadsworth's
employment and the jury's verdict was proper.
With that said, however, I do not agree with the majority's
conclusion that Wadsworth has a fundamental right to pursue a
particular job. The majority finds a fundamental right in the
right to pursue employment in order to pursue life's basic
necessities. The majority, however, fails to construe the meaning
of "life's basic necessities." In fact, there was no discussion in
the majority opinion as to whether Wadsworth's second job was
needed in order for him to obtain these basic necessities. Life's
basic necessities cannot and should not be an infinite term. One
person's necessity can be another person's luxury. The right to
34
pursue employment is fundamental to the extent that employment
provides those necessities.
In the majority's opinion, Wadsworth has successfully evaded
his responsibility of limiting his right to the basic necessities.
In fact, Wadsworth failed to produce any evidence as to the basic
necessities of which he was deprived. A more plausible right
encompassing Wadsworth's right to pursue employment would therefore
be his right to acquire property. The right to acquire, possess,
and protect property is also an inalienable right. Mont. const .
art. II, 5 3. However, the right to pursue a particular job in
order to acquire property is not fundamental.
The majority distinguishes the right to pursue employment
generally as a necessary incident of the fundamental right to
pursue life's basic necessities from a right or property interest
in any particular job or employment. Absent a specified term of
employment, this Court has held that an employee does not have a
property interest in a particular job. Boreen v. Christensen
(1994), 267 Mont. 405, 420, 884 P.2d 761, 770. Nor should a right
to acquire property impart a fundamental right to pursue employment
in a particular job. In this respect, I see no significant
difference in the right to hold a particular job and the right to
pursue a particular job.
In Cecil v. Allied Stores (1973), 162 Mont. 491, 513 P.2d 704,
nonretail sellers claimed a legislative act that denied them the
right to charge the same finance charges as retail sellers was a
violation of their constitutionally protected right to acquire
property. Similar to the present case, the plaintiffs in Cecil
argued that the act inhibited their ability to make money so that
they may acquire property. This Court held that so long as the
legislative classifications of the act are constitutional, it does
not violate the right to acquire property. Cecil, 513 P.2d at 710.
As for the right to pursue a particular job, this Court has
held that the practice of certain professions is not a fundamental
right. Petition of Morris (1978), 175 Mont. 456, 458, 575 P.2d 37,
38. In Morris, the petitioner claimed that unification of the bar
deprived him of his inalienable right to earn a living. Morris,
575 P.2d at 38. The Court held "[aIn individual has no inalienable
right to earn a living practicing law. It is neither a vested
right nor a property right. The practice of law is a privilege
burdened with conditions." Morris, 575 P.2d at 38 (citation
omitted). The practice of real estate appraising is similar to the
practice of law in that both provide a needed service that is
regulated by a professional board and is subject to certain
educational and ethical standards. See Rule 8.57.413, ARM;
Application of Montana Bar Ass'n Pres. (1974), 163 Mont. 523, 525,
518 P.2d 32, 33.
Finally, the inalienable rights set forth in our constitu-
tion's declaration of rights impart corresponding responsibilities.
Mont. Const. art. II, 5 3. Delegates to the 1971-72 Constitutional
Convention expressed concern that people were accepting rights
without recognizing that they create obligations. The convention
committee concluded that the inclusion of such a statement would
36
committee concluded that the inclusion of such a statement would
not infringe or impair the rights granted in the Declaration of
Rights but would only accord a tone of responsibility to their
exercise. Mont. Const. Conv. (1971-72) vol V, 1637. In this case,
the majority has failed to acknowledge any corresponding
responsibility on the part of Wadsworth in exercising his rights.
I would have found that Wadsworth did not have a fundamental
right in pursuing a second job as a real estate appraiser.
Therefore, the analysis of Wadsworth's pursuit of that particular
employment should not be subject to strict scrutiny but scrutiny of
a lesser degree.
a>%
Justice
37
Wadsworth v. State
Court: Montana Supreme Court
Date filed: 1996-02-26
Citations: 911 P.2d 1165, 275 Mont. 287, 53 State Rptr. 146
Copy Citations