The 7th Circuit Court of Appeals ruled today on the case of Paul K. Ogden v. James Atterholt, Carol J. Mihalik, and the Indiana Department of Insurance, No. 09-2953, which comes out of the Southern District of Indiana in Indianapolis.
 

Hired in late 2006 as manager for the state agency’s newly created title insurance division, Paul Ogden began working around his immediate supervisor, Chief Deputy Commissioner Carol Mihalik, who the court record says Ogden began to resent for what he described as an ineffective management style. He met with the state’s personnel division to file a formal complaint against Mihalik, and wrote a memo about reorganizing the state agency so that the title insurance division was removed from the consumer protection unit – specifically he alleged that Mihalik was incompetent or corrupt. After receiving that memo, Commissioner of Insurance James Atterholt and Mihalik met with Ogden and told him he could either resign or be fired for being “out of line.” Ogden chose resignation and signed a voluntary resignation letter so that he could keep his accrued vacation time and avoid being placed on Indiana’s “do not hire” list, the court opinion says.
Ogden sued the management and overall department on state claims involving “whistle-blowing,” unjust termination, and intentional infliction of emotional distress, as well as federal claims on due process and a 42 U.S.C. §1983 violation of his First Amendment free speech rights.

The case was moved to federal court on those two claims, and U.S. Magistrate Judge Jane Magnus-Stinson granted summary judgment for the defendants on both federal claims and remanded the suit to state court on the remaining claims. Ogden appealed, and now the three-judge 7th Circuit panel affirmed the magistrate judge’s ruling on the free speech claim.

Citing the U.S. Supreme Court decision in Garcetti v. Ceballos, 547 U.S. 410 (2006), the panel found that Ogden’s memo was not protected speech because it directly involved his work responsibilities. The appellate court wasn’t convinced that it should dissect the multiple issues touched on in that memo.

“The memo speaks for itself,” Judge Diane Sykes wrote for the panel, noting that it dealt specifically with Milhalik’s ability to supervise the division where he worked. “Ogden’s memo reflects exactly the sort of localized employment-related speech that Garcetti held was not entitled to First Amendment protection.”

In addition to the free speech issue, the judges also touched on what it called one final housekeeping item: the due process claim that had been raised at the District level. Ogden raised a concern on appeal that Magistrate Judge Magnus-Stinson’s resolution in favor of the defendants might foreclose litigation of that due process claim in the Indiana courts. The appellate panel noted that it wasn’t clear during the litigation at the District level whether that claim involved state or federal law, but Ogden clarified in a reply brief and at oral arguments that the issue was specifically focused on state law.

“The magistrate judge should not have taken up and resolved the due-process claim as if it arose under federal law – though it was understandable why she did so given the confusion in the pleadings,” Judge Sykes wrote. “That claim now returns to state court along with Ogden’s other state claims.”