Lawrence S. Wagle, Plaintiff-appellant, v. H. Max Murray, As Principal of the R. A. Long High School,et al., Defendants-appellees, 546 F.2d 1329 (9th Cir. 1977)

Appellant brought this action under the Civil Rights Act of 1871, 42 U.S.C. § 1983, against the principal of R. A. Long High School, Longview, Washington, the superintendent and members of the board of directors of the Longview School District, and the school district itself.¹  He alleged that appellees terminated his employment as a history teacher at the high school because of his exercise of his First Amendment right of free speech, and in violation of his Fourteenth Amendment right to procedural due process. He sought reinstatement, back pay, damages, attorneys' fees, and costs.

The jury awarded appellant $50,000. The district court granted appellees' motions for judgment notwithstanding the verdict on the grounds that (1) appellant failed to exhaust his administrative remedies and (2) there was no evidence that appellant was terminated for exercising his First Amendment rights or that appellees acted in bad faith. The district court also denied appellant's motion for equitable relief. This appeal followed.

Four issues are raised: (1) whether appellant's claim is barred because he failed to exhaust administrative remedies; (2) whether the jury's verdict lacked support in the evidence; (3) whether, if the judgment notwithstanding the verdict is reversed, appellees are entitled to a new trial; and (4) whether appellant was entitled to equitable relief.

Washington law provides that if the board of directors of a school district determines there is "probable cause" not to renew a teacher's contract for the next school term, the board shall notify the teacher by April 15, specifying the cause for nonrenewal.²  Within ten days after receiving the notice of nonrenewal the teacher may request a hearing before the board,³  or file an appeal to the state superior court.⁴  If a hearing is held before the board, the board shall notify the teacher "of its final decision to renew or not renew" the employment contract within ten days after the hearing is concluded.⁵  If the teacher does not request a hearing before the board (or file an appeal in the superior court) within the time allowed, the decision of the board not to renew becomes final and conclusive. Robel v. Highline School District, 65 Wash. 2d 477, 485, 398 P.2d 1, 6 (1965); State ex rel. Bohanon v. Wanamaker, 47 Wash. 2d 794, 803, 289 P.2d 697, 701-02 (1955).

On April 1, 1970, the school board sent appellant a "resolution of non-renewal," asserting "probable cause for non-renewal" on listed grounds. The notice did not inform appellant that he had ten days to request a hearing or file suit. Appellant testified that he knew of his statutory rights to request a hearing, but thought he had 30 days within which to act.⁶  He further testified that he learned of the deadline from another teacher on Friday, April 10, the ninth day of the statutory ten-day period. On the same day, appellant delivered a note to the school personnel officer reading, "The non-renewal of my contract was, as you know, illegal. There will accordingly be a legal challenge to the decision of the school board." On the following Monday, apparently two days after the ten-day period had run,⁷  appellant contacted his attorney, and, on the attorney's advice, delivered another note to the school personnel officer, reading, "I have already indicated that there would be a challenge to my illegal dismissal. At what time would it be possible to obtain a hearing with the school board?"

The secretary of the board wrote to appellant in response to both letters. The secretary stated that appellant's first note was not a request for a hearing, that his second note was not timely under the statute, and that neither note was addressed to the "chairman or secretary" of the board as the statute required. The secretary's letter concluded, "(T)he Board of Education may not waive or alter statutory requirements. The Board therefore cannot grant you a hearing on the non-renewal of your contract."

The district court agreed with the school board that appellant's two notes did not satisfy the requirements of the Washington statute. For this reason the court concluded that appellant had failed to exhaust his administrative remedy under the statute, and that this failure "was fatal to his action under § 1983."

It is a general rule that a litigant must exhaust available and adequate state administrative remedies before seeking relief in federal courts.⁸  Generally, suits under the Civil Rights Act are excepted from the rule because the remedy afforded by the Act "is supplementary to the state remedy." Monroe v. Pape, 365 U.S. 167, 183, 81 S. Ct. 473, 482, 5 L. Ed. 2d 492 (1961).⁹  Appellees argue, however, that the present case is governed by decisions of this court which hold that in some circumstances the exhaustion rule does apply to actions under the Civil Rights Act. See Whitner v. Davis,410 F.2d 24 (9th Cir. 1969); Toney v. Reagan, 467 F.2d 953 (9th Cir. 1972); Bignall v. North Idaho College, 538 F.2d 243 (9th Cir. 1976).¹⁰ 

The exhaustion rule is not to be "woodenly" applied. Morgan v. LaVallee, 526 F.2d 221, 223 (2d Cir. 1975). "Application of the rule is not jurisdictional, but calls for the sound exercise of judicial discretion." Kale v. United States, 489 F.2d 449, 454 (9th Cir. 1973).¹¹  Even in those areas of the law in which exhaustion of administrative remedies is generally required, judicial review will not be denied for failure to exhaust such remedies unless, on balance, the interests served by requiring exhaustion outweigh the injury the complainant would suffer if exhaustion were required. McKart v. United States, 395 U.S. 185, 197, 89 S. Ct. 1657, 23 L. Ed. 2d 194 (1969); McGee v. United States, 402 U.S. 479, 484, 91 S. Ct. 1565, 29 L. Ed. 2d 47 (1971); United States v. Newmann, 478 F.2d 829, 831-32 (8th Cir. 1973).

The damage to appellant would be substantial if his remedy under the Civil Rights Act were withdrawn. The state has denied him any remedy, administrative or judicial. If his federal judicial remedy were also foreclosed, appellant would have no recourse for the termination of his employment and the substantial financial loss he has sustained (allegedly, and as found by the jury) because he exercised rights guaranteed to him by the First Amendment.

Whether the severe burden that would be imposed upon appellant by denying judicial review would be outweighed by the governmental interests at stake depends primarily upon the function served by the particular administrative process and the nature of appellant's default. McGee v. United States, supra, 402 U.S. at 484, 91 S. Ct. 1565.

If the administrative process serves an important purpose in the scheme established by the state for the resolution of the kind of dispute involved, failure to exhaust the administrative process may seriously affect the interests of the state. If the state does not rely heavily upon the administrative process, bypassing that process will have less serious consequences. The present case falls in the second category. Under the Washington statutory scheme, appellant was not required to seek a hearing before the board before appealing to a state court. The Washington statute provides, "In lieu of requesting a hearing before the board of directors . . . an employee may elect to appeal the action of the board directly to the superior court of the county in which the school district is located . . . ." Rev.Code Wash. § 28 A. 58.515. A state statute also provides that if the employee elects to request a hearing before the board any appeal to the superior court after the board has acted "shall be heard de novo by the superior court." Rev.Code Wash. § 28 A. 58.480.

This statutory scheme negates the existence of any state interest in requiring exhaustion of the administrative remedy. An aggrieved employee is free to ignore the administrative process entirely.¹²  If he elects to use the administrative process, the administrative decision has no significant effect upon subsequent judicial procedures.¹³  Washington does not rely upon the administrative process either as a fact-finding mechanism or as a means for developing and applying special administrative expertise. It would be anomalous for the federal courts to attribute a value to the state administrative process the state itself does not.

The minimal state interest in requiring exhaustion is emphasized by the nature of appellant's default. Appellant did not interrupt an on-going administrative proceeding. Nor did appellant deliberately circumvent the administrative process and deny the board an opportunity to develop the facts and correct its own errors. On the contrary, appellant made every effort to obtain a board hearing. He was denied that opportunity because he addressed his request to the wrong official (though the proper official had actual notice and answered his letter), and because he did not file his request within ten days (though he filed a letter protesting the illegality of the nonrenewal on the ninth day a Friday and a request for a hearing on the twelfth day the following Monday and though he filed late because of an understandable confusion as to the applicable time limits. See note 6). There is nothing in this case that will induce the frequent and deliberate flouting of the state administrative process. Moreover, the board did not suggest that appellant's default prejudiced the board in any way. The board denied appellant a hearing only because the board was advised that it was not permitted to "waive or alter statutory requirements."

The state may impose unyielding technical preconditions upon administrative review if it chooses. If the state takes that course, however, it can hardly be said that the state has a compelling interest in seeing that the administrative process is used. Cf. United States v. Newmann, supra, 478 F.2d at 831-32. In view of the harsh impact of the exhaustion doctrine when invoked to deny appellant any judicial review of his claim, "an insubstantial procedural default . . . should not shield an invalid order from judicial correction . . . ." McGee v. United States, supra, 402 U.S. at 484-85, 91 S. Ct. at 1569.

Although resort to the administrative remedy in the cases relied upon by appellees and in the present case might have forestalled the deprivation, the balance of interests was in other respects quite different. In Toney v. Reagan, supra, and Bignall v. North Idaho College, supra, the claimant was not denied a remedy. The administrative remedy remained open; the only burden imposed upon the claimant was that he exhaust it before obtaining judicial review. In these cases, as well as in Whitner v. Davis, supra, the administrative process performed a crucial fact-finding function; and in all three cases the claimant deliberately sought to avoid and frustrate the administrative process. Moreover, in both Whitner v. Davis and Bignall v. North Idaho College, the gravamen of the Civil Rights Act complaint was that the administrative process was constitutionally inadequate. Since exhaustion is not required if the administrative remedy is inadequate, the decision of that question by the court resolved the merits of the claim. Gibson v. Berryhill, 411 U.S. 564, 574-75, 93 S. Ct. 1689, 36 L. Ed. 2d 488 (1973).¹⁴ 

The only interest that might be served by requiring the exhaustion of the state administrative remedy in a case such as this is the interest of the federal court in avoiding additional litigation as the court would if the underlying dispute were resolved in the administrative process. This consideration is not alone enough to support an exhaustion requirement, as demonstrated by the many cases holding that state judicial remedies need not be exhausted before filing an action under the Civil Rights Act.¹⁵ 

Balancing the relevant factors, we conclude that appellant is not barred by failure to exhaust administrative remedies.

The issue submitted to the jury was whether appellees terminated appellant's employment as a teacher because they disapproved of communications and expressive activities protected by the First Amendment, or because he was an ineffective teacher.¹⁶  There was evidence from which the jury could have inferred either motive. The motion for judgment notwithstanding the verdict was therefore improperly granted. Cockrum v. Whitney, 479 F.2d 84, 85 (9th Cir. 1973).

Appellant was employed by the R. A. Long High School in 1962. During the first five years of his service his competency as a teacher was not challenged seriously enough to inspire any suggestion of nonrenewal of his contract. In the fall of 1965 he was elected chairman of the local chapter of the American Civil Liberties Union. In the spring of 1966 he began to challenge long accepted practices at the high school as violative of the separation of church and state including holding baccalaureate services at the school and offering prayers at the annual honor society banquet. In October 1967 appellant wrote a letter to the local newspaper expressing his views on the subject. A public controversy ensued which continued into the spring of 1968. Early in the same year, appellant wrote a letter to the local newspaper defending ACLU's position favoring legalization of marihuana. This letter, too, provoked intense public comment, largely critical of appellant. After a year of comparative quiet, it was brought to public attention that appellant had made available to his students a pamphlet titled, "The Student as Nigger," which, in unrestrained language, analogized the student-teacher relationship to a system of slavery.¹⁷  There was evidence that criticism of appellant's effectiveness as a teacher began with the church-state controversy, intensified during the marihuana incident, diminished in the lull preceding the distribution of the pamphlet, recommenced following that distribution, and continued until appellant's termination. There is also evidence that in faculty meetings, exchanges between appellant and the school principal and superintendent, and meetings of the board, appellant's expression of controversial views was linked with his possible dismissal. Finally, there was evidence that appellees were aware of the problem of sustaining a dismissal based upon appellant's communications, and deliberately undertook to "build a record" to support dismissal on other grounds.

From this circumstantial evidence the jury could reasonably infer that appellant's termination was motivated by the public expression of his controversial views.

Since there is a reasonable basis for the jury's verdict it could not be set aside even if on the whole record we thought it more likely that appellees discharged appellant because he was an ineffective teacher, as they testified. "Courts are not free to reweigh the evidence and set aside the jury verdict merely because the jury could have drawn different inferences or conclusions or because judges feel that other results are more reasonable." Tennant v. Peoria & P. V. Ry., 321 U.S. 29, 35, 64 S. Ct. 409, 412, 88 L. Ed. 520 (1944). Nor is the verdict flawed because it rests, as the trial court put it, "upon guess, speculation, or conjecture." As the Supreme Court said in Lavender v. Kurn, 327 U.S. 645, 653, 66 S. Ct. 740, 744, 90 L. Ed. 916 (1946): "Whenever facts are in dispute or the evidence is such that fairminded men may draw different inferences, a measure of speculation and conjecture is required on the part of those whose duty it is to settle the dispute by choosing what seems to them to be the most reasonable inference." This is particularly true when the issue is motive, as in this case.¹⁸ 3. Remedy

After the verdict had been received, appellant moved for an order requiring reinstatement and an award of back pay. Obviously, equitable relief was barred by the court's determination that the evidence was insufficient to show that appellant had been terminated in violation of his First Amendment rights. The trial judge added, however, "(e)ven if my conclusions were other than those stated here today, in the exercise of discretion, I would deny the request."

We recently sustained denial of reinstatement of a teacher discharged under an unconstitutionally vague statute. Burton v. Cascade School District Union High School No. 5, 512 F.2d 850 (9th Cir. 1975). The circumstances of that case were unusual. The opinion strongly suggests that the result was influenced by the fact that the teacher's assignment included supervision of sports activities for girls and her dismissal was based upon her admission that she was a "practicing homosexual." We recognized that reinstatement is usually granted in cases involving discharge "aimed at punishing the exercise of free speech." Id. at 853 & n.3.¹⁹  The record in this case reflects no special circumstances that would justify denying the usual relief. Accordingly, appellant should be reinstated to his position.

Ordinarily, an award of back pay, diminished by any interim earnings, is an integral part of the remedy of reinstatement.²⁰  There is some doubt, however, whether the jury may have included back pay in calculating damages. It will be open to the trial court on remand to resolve this issue, and, if it appears that double recovery would otherwise result, to reduce either the award of damages or of back pay.

The district court on remand will also reconsider the denial of attorneys' fees in light of the Civil Rights Attorneys' Fees Awards Act of 1976, P.L. 94-559, 90 Stat. 2641 (October 19, 1976).

Affirmed in part, reversed in part, and remanded for proceedings consistent with this opinion.