                                                                         FILED
                                                                     Apr 30 2020, 6:57 am

                                                                         CLERK
                                                                     Indiana Supreme Court
                                                                        Court of Appeals
                                                                          and Tax Court




ATTORNEYS FOR APPELLANT                                     ATTORNEYS FOR APPELLEE
Ryan Sullivan                                               Curtis T. Hill, Jr.
Andrew Dutkanych, III                                       Attorney General of Indiana
Biesecker Dutkanych & Macer, LLC
Indianapolis, Indiana                                       Abigail R. Recker
                                                            Deputy Attorney General
                                                            Indianapolis, Indiana


                                             IN THE
    COURT OF APPEALS OF INDIANA

John Crouch,                                                April 30, 2020
Appellant-Plaintiff,                                        Court of Appeals Case No.
                                                            19A-CT-1910
        v.                                                  Appeal from the Marion Superior
                                                            Court
State of Indiana,                                           The Honorable Marc Rothenberg,
Britni Saunders,                                            Judge
                                                            Trial Court Cause No.
Appellees-Defendants.
                                                            49D07-1812-CT-48249



Brown, Judge.




Court of Appeals of Indiana | Opinion 19A-CT-1910 | April 30, 2020                           Page 1 of 13
[1]   John Crouch appeals the dismissal of his complaint. We affirm.


                                           Facts and Procedural History

[2]   On December 5, 2018, Crouch filed a complaint and demand for jury trial

      against the State of Indiana and Britni Saunders, the State Personnel Director,

      in her official capacity and her individual capacity. According to the

      complaint, on or about June 5, 2001, Crouch was “employed by the Defendant

      in the Attorney General’s office” as a senior compliant analyst, which was a

      non-attorney position, and Defendant terminated Crouch’s employment on or

      about March 25, 2003. 1 Appellant’s Appendix Volume II at 8. Crouch alleged

      that he applied for positions with the Indiana Department of Correction

      (“DOC”) and the Indiana Bureau of Motor Vehicles (“BMV”) in 2018 but was

      not selected and subsequently learned that the State Personnel Department had

      identified him as not eligible for rehire and “Defendant did not provide any

      notice to Crouch that he was being designated as [not eligible for rehire] in its

      Peoplesoft database.” Id. at 9. The complaint alleged Count I, violations of the

      Fourteenth Amendment; and Count II, blacklisting as a violation of Ind. Code

      §§ 22-5-3-1(a) and 22-5-3-2. Crouch requested the court: require the State to

      remove his name from any list, database, or program that lists him as not

      eligible for rehire, enjoin the State from categorizing him or any other employee

      as not eligible for rehire without first providing notice and an opportunity to be




      1
          Crouch’s complaint does not define “Defendant” or specify if he is referring to the State or to Saunders.


      Court of Appeals of Indiana | Opinion 19A-CT-1910 | April 30, 2020                                   Page 2 of 13
      heard, require Saunders in her individual capacity to pay damages to Crouch,

      and require the State to pay penal damages for its violation of Ind. Code § 22-5-

      3-1(a).


[3]   On February 6, 2019, the Defendants filed a motion to dismiss pursuant to Ind.

      Trial Rule 12(B)(6) and a memorandum of law. The Defendants argued

      Crouch did not have a liberty interest in being rehired by the State and that Ind.

      Code §§ 22-5-3-1 and 22-5-3-2 did not apply to his claim. Crouch filed a

      response, and the Defendants filed a reply. In June 2019, the court held a

      hearing on the motion to dismiss, 2 and on July 19, 2019, granted the motion

      and ordered the cause dismissed with prejudice.


                                                         Discussion

[4]   A motion to dismiss pursuant to Ind. Trial Rule 12(B)(6) tests the legal

      sufficiency of the complaint. Price v. Ind. Dep’t of Child Servs., 80 N.E.3d 170,

      173 (Ind. 2017). The rule requires that we accept as true the facts alleged in the

      complaint. Id. We review 12(B)(6) motions de novo and will affirm a dismissal

      if the allegations are incapable of supporting relief under any set of

      circumstances. Id. We will also affirm a dismissal if the decision is sustainable

      on any basis in the record. Id.




      2
          The record does not contain a transcript of this hearing.


      Court of Appeals of Indiana | Opinion 19A-CT-1910 | April 30, 2020         Page 3 of 13
      A. Fourteenth Amendment


[5]   Crouch argues that the State and Saunders deprived him of his occupational

      liberty interest by categorizing him as not eligible for rehire without notice and

      an opportunity to be heard in violation of the Fourteenth Amendment. He

      asserts that the Defendants created a stigma that foreclosed other job

      opportunities by coding him as not eligible for rehire.


[6]   Section 1983 provides:


              Every person who, under color of any statute, ordinance,
              regulation, custom, or usage, of any State or Territory or the
              District of Columbia, subjects, or causes to be subjected, any
              citizen of the United States or other person within the jurisdiction
              thereof to the deprivation of any rights, privileges, or immunities
              secured by the Constitution and laws, shall be liable to the party
              injured in an action at law, suit in equity, or other proper
              proceeding for redress, except that in any action brought against
              a judicial officer for an act or omission taken in such officer’s
              judicial capacity, injunctive relief shall not be granted unless a
              declaratory decree was violated or declaratory relief was
              unavailable.


      42 U.S.C.A. § 1983.


[7]   Section 1983 creates no substantive right of its own, but acts only as a vehicle to

      afford litigants a civil remedy for deprivation of their federal rights. Myers v.

      Coats, 966 N.E.2d 652, 657 (Ind. Ct. App. 2012) (citing Albright v. Oliver, 510

      U.S. 266, 271, 114 S. Ct. 807 (1994), reh’g denied). To prevail on a Section 1983

      claim, “the plaintiff must show that (1) the defendant deprived the plaintiff of a


      Court of Appeals of Indiana | Opinion 19A-CT-1910 | April 30, 2020         Page 4 of 13
      right secured by the Constitution and laws of the United States, and (2) the

      defendant acted under the color of state law.” Id. (citing J.H. ex rel. Higgin v.

      Johnson, 346 F.3d 788, 791 (7th Cir. 2003), reh’g and reh’g en banc denied, cert.

      denied, 541 U.S. 975, 124 S. Ct. 1891 (2004)). The Fourteenth Amendment of

      the United States Constitution prohibits any state from depriving a person of

      life, liberty, or property without due process of law.


[8]   Whether a governmental entity is amenable to suit under Section 1983 depends

      on the meaning of the term “person.” “The U.S. Supreme Court has held that

      for § 1983 purposes that term does not include a state or its administrative

      agencies.” J.A.W. v. State, Marion Cty. Dep’t of Pub. Welfare, 687 N.E.2d 1202,

      1203 (Ind. 1997) (citing Will v. Michigan Dep’t of State Police, 491 U.S. 58, 109 S.

      Ct. 2304 (1989)). See also Cantrell v. Morris, 849 N.E.2d 488, 506 n.26 (Ind.

      2006) (“Section 1983 permits recovery against individual officers and units of

      local government, but not against the State itself”). Thus, we affirm the court’s

      dismissal of Crouch’s complaint against the State.


[9]   As to the dismissal of Crouch’s claim against Saunders in her official capacity,

      we note that “a state official in his or her official capacity, when sued for

      injunctive relief, would be a person under § 1983 because ‘official-capacity

      actions for prospective relief are not treated as actions against the State.’” Will,

      491 U.S. at 71, 109 S. Ct. at 2312 (citing Kentucky v. Graham, 473 U.S. 159, 167,

      n.14, 105 S. Ct. 3099, 3106, n.14; Ex parte Young, 209 U.S. 123, 159-160, 28 S.

      Ct. 441, 453-454 (1908)). See also Chang v. Purdue Univ., 985 N.E.2d 35, 49 (Ind.

      Ct. App. 2013) (“[I]t is well settled that a state official may be sued in his or her

      Court of Appeals of Indiana | Opinion 19A-CT-1910 | April 30, 2020          Page 5 of 13
       official capacity for prospective relief such as an injunction for a violation of a

       person’s due process rights under § 1983.”), reh’g denied, trans. denied.


[10]   Crouch’s complaint requested the trial court to “[e]njoin the State from

       categorizing [him] or any other employee as not eligible for rehire without first

       providing that individual with notice and an opportunity to be heard.”

       Appellant’s Appendix Volume II at 11. However, Crouch did not request

       injunctive relief or other prospective relief as to Saunders in her official

       capacity. Accordingly, we affirm the court’s dismissal of Crouch’s claim

       against Saunders in her official capacity.


[11]   As to the dismissal of Crouch’s claim against Saunders in her individual

       capacity, we note “a state official may be sued in his or her individual capacity

       for retrospective relief under § 1983.” Chang, 985 N.E.2d at 49. Crouch

       requested that the trial court require Saunders in her individual capacity to pay

       damages for “[a]ll wages, benefits, compensation, and other monetary loss

       suffered as a result of Defendant’s unlawful actions,” “[c]ompensation for any

       and all other damages suffered as a consequence of Defendants’ unlawful

       actions,” and punitive damages. Appellant’s Appendix Volume II at 11.


[12]   “In addressing a claim of an unconstitutional denial of procedural due process,

       we undertake a two step analysis.” Larry v. Lawler, 605 F.2d 954, 957 (7th Cir.

       1978). Initially, we must determine whether Crouch’s interest rises to the level

       of a constitutionally protected liberty or property interest. See id. If there is a

       recognizable property or liberty interest at stake, then we must weigh the


       Court of Appeals of Indiana | Opinion 19A-CT-1910 | April 30, 2020             Page 6 of 13
       competing interests of the individual and the Government in order to reach a

       resolution of what process is due. Id.


[13]   Crouch asserts only that his interest constituted a protected liberty interest. The

       United States Supreme Court has held:


               While this court has not attempted to define with exactness the
               liberty . . . guaranteed (by the Fourteenth Amendment), the term
               has received much consideration and some of the included things
               have been definitely stated. Without doubt, it denotes not merely
               freedom from bodily restraint but also the right of the individual
               to contract, to engage in any of the common occupations of life,
               to acquire useful knowledge, to marry, establish a home and
               bring up children, to worship God according to the dictates of his
               own conscience, and generally to enjoy those privileges long
               recognized . . . as essential to the orderly pursuit of happiness by
               free men.


       Bd. of Regents of State Colleges v. Roth, 408 U.S. 564, 572, 92 S. Ct. 2701, 2706-

       2707 (quoting Meyer v. Nebraska, 262 U.S. 390, 399, 43 S. Ct. 625, 626 (1972)).


[14]   In Larry, the Seventh Circuit discussed Roth and held:


               The court suggested a two-pronged liberty interest. Initially,
               liberty may be implicated if charges are leveled against an
               employee which “might seriously damage his standing and
               associations in his community,” and the court gives as an
               example accusations of dishonesty or immorality. [Roth, 408
               U.S.] at 573, 92 S. Ct. at 2707. . . .

               Secondly, the court explained that liberty may also be abridged if
               “the State, in declining to re-employ the respondent, imposed on
               him a Stigma or other disability that foreclosed his freedom to
               take advantage of other employment opportunities. . . .”

       Court of Appeals of Indiana | Opinion 19A-CT-1910 | April 30, 2020          Page 7 of 13
       605 F.2d at 957. “A plaintiff may prove a deprivation of a liberty interest by

       showing damage to her ‘good name, reputation, honor, or integrity[.]’”

       Omosegbon v. Wells, 335 F.3d 668, 675 (7th Cir. 2003) (quoting Wisconsin v.

       Constantineau, 400 U.S. 433, 437, 91 S. Ct. 507 (1971)).


[15]   In order to determine the specific dictates of due process in a given situation, it

       is necessary to balance three distinct factors: (1) the private interest that will be

       affected by the official action; (2) the risk of an erroneous deprivation of such

       interest through the procedures used, along with the probable value, if any, of

       additional or substitute procedural safeguards; and (3) the government’s

       interest, including the function involved and the fiscal and administrative

       burdens that the additional or substitute procedural requirements would entail.

       Mitchell v. State, 659 N.E.2d 112, 114 (Ind. 1995) (citing Wilson v. Bd. of Ind.

       Employment Sec. Div., 270 Ind. 302, 309-310, 385 N.E.2d 438, 444 (1979)

       (quoting Mathews v. Eldridge, 424 U.S. 319, 335, 96 S. Ct. 893, 903 (1976)), cert.

       denied, 444 U.S. 874, 100 S. Ct. 155 (1979)).


[16]   The Seventh Circuit has held:


               A claim that a government employer has infringed an employee’s
               liberty to pursue the occupation of his or her choice requires that
               (1) the employee be stigmatized by the employer’s actions; (2) the
               stigmatizing information be publicly disclosed; and (3) the
               employee suffer a tangible loss of other employment
               opportunities as a result of the public disclosure. However,
               simply labeling an employee as being incompetent or otherwise
               unable to meet an employer’s expectations does not infringe the
               employee’s liberty. The employee’s good name, reputation,
               honor, or integrity must be called into question in such a way as
       Court of Appeals of Indiana | Opinion 19A-CT-1910 | April 30, 2020           Page 8 of 13
               to make it virtually impossible for the employee to find new
               employment in his chosen field.


       Head v. Chicago Sch. Reform Bd. of Trustees, 225 F.3d 794, 801 (7th Cir. 2000).


[17]   Crouch’s complaint alleged that he “has broad liberty interests protected by the

       Constitution of the United States, including, but not limited to, the right to

       contract, to engage in any of the common occupations of life, and to his good

       name, reputation, honor and integrity.” Appellant’s Appendix Volume II at 9.

       The complaint does not assert that the designation in the State’s Peoplesoft

       database was ever made public. Further, Crouch has not alleged that the DOC

       or BMV requested his personnel file, or that Saunders released his personnel

       file. Crouch also does not allege the designation was erroneous or based on

       false charges or specify a chosen field of employment. Under the

       circumstances, we cannot say that reversal is warranted. See Omosegbon, 335

       F.3d at 675 (observing the district court rejected the plaintiff’s claim of

       deprivation of a liberty interest because there was no evidence that any

       statements regarding the plaintiff’s teaching ability were ever made public,

       noting a denial of tenure or employment is only stigmatizing if it is

       accompanied by a publicly announced reason that impugns the employee’s

       moral character or implies dishonesty or other job-related moral turpitude, and

       holding the plaintiff “had to show that the news of his denial of re-appointment




       Court of Appeals of Indiana | Opinion 19A-CT-1910 | April 30, 2020            Page 9 of 13
       was both publicly disseminated and also sullied his moral character” and failed

       to establish a liberty interest). 3


       B. Blacklisting


[18]   Crouch argues the trial court erred with respect to his claims under Ind. Code §§

       22-5-3-1 and 22-5-3-2. Ind. Code § 22-5-3-1 is titled “Disclosure of information

       after employee’s discharge” and provides:


                (a) A person who, after having discharged any employee from his
                service, prevents the discharged employee from obtaining
                employment with any other person commits a Class C infraction
                and is liable in penal damages to the discharged employee to be
                recovered by civil action; but this subsection does not prohibit a
                person from informing, in writing, any other person to whom the
                discharged employee has applied for employment a truthful
                statement of the reasons for the discharge.

                (b) An employer that discloses information about a current or
                former employee is immune from civil liability for the disclosure
                and the consequences proximately caused by the disclosure,
                unless it is proven by a preponderance of the evidence that the
                information disclosed was known to be false at the time the
                disclosure was made.

                (c) Upon written request by the prospective employee, the
                prospective employer will provide copies of any written



       3
        To the extent Crouch relies upon Larry, 605 F.2d 954, we find the case distinguishable. As for the private
       interest that will be affected by the official action, unlike in Larry in which the court observed that the
       ineligibility rating charged Larry with “abusive treatment of [his] colleagues and associates” and labeled him
       an “habitual and excessive user of intoxicants,” 605 F.2d at 959, Crouch does not assert that any basis was
       identified for his designation. With respect to the risk of an erroneous deprivation of such interest through
       the procedures used, unlike in Larry in which Larry questioned the reliability or veracity of the source of the
       information used as a basis for the Commission’s decision, see id. at 960, Crouch’s complaint does not assert
       that he was wrongfully classified.

       Court of Appeals of Indiana | Opinion 19A-CT-1910 | April 30, 2020                                Page 10 of 13
               communications from current or former employers that may
               affect the employee’s possibility of employment with the
               prospective employer. The request must be received by the
               prospective employer not later than thirty (30) days after the
               application for employment is made to the prospective employer.


[19]   Ind. Code § 22-5-3-2 is titled “Railroads; damages; exemplary damages” and

       provides:


               If any railway company or any other company, partnership,
               limited liability company, or corporation in this state shall
               authorize, allow or permit any of its or their agents to black-list
               any discharged employees, or attempt by words or writing, or
               any other means whatever, to prevent such discharged employee,
               or any employee who may have voluntarily left said company’s
               service, from obtaining employment with any other person, or
               company, said company shall be liable to such employee in such
               sum as will fully compensate him, to which may be added
               exemplary damages.


[20]   The Indiana Supreme Court has held: “Although this Court has abrogated

       common-law sovereign immunity almost entirely for tort claims, we have not

       done so for non-tort claims based on a statute.” Esserman v. Ind. Dep’t of Envtl.

       Mgmt., 84 N.E.3d 1185, 1188 (Ind. 2017). “[W]e should not conclude lightly

       that our legislature has waived State immunity.” Id. at 1192. “We will thus

       find a waiver of sovereign immunity only when the statute at issue contains an

       unequivocal affirmative statement that clearly evinces the legislature’s intention

       to subject the State to suit for the specific statutory claim asserted.” Id.




       Court of Appeals of Indiana | Opinion 19A-CT-1910 | April 30, 2020         Page 11 of 13
[21]   Ind. Code § 22-5-3-2 mentions “railway company or any other company,

       partnership, limited liability company, or corporation,” and does not specify the

       State. We cannot say that this statute clearly evinces or unequivocally

       expresses the legislature’s intention to waive the State’s sovereign immunity

       under these circumstances. See Esserman, 84 N.E.3d at 1192 (observing that

       Indiana’s False Claims and Whistleblower Protection Act, while clearly stating

       that an employee may sue her employer, does not name the State (or one of its

       agencies or officials) as a permissible whistleblower defendant, noting that

       “[h]ad the legislature intended to subject the State to whistleblower liability, it

       could have expressed that intention any number of ways,” and concluding that

       the legislature did not “clearly evince” or “unequivocally express” its intention

       to waive State immunity for whistleblower claims). 4


[22]   Even assuming the legislature expressed such an intent or that the State or

       Saunders qualifies as a “person” under Ind. Code § 22-5-3-1, we note that we

       harmonize statutes when possible, and Title 4 of the Indiana Code governs

       State Offices and Administration, and Ind. Code § 4-15-2.2.-30 provides that

       “[a]n application for employment may be rejected if the department determines

       that the applicant . . . has been dismissed from the public service . . . .” Further,




       4
         We note that the Indiana Supreme Court has held: “Indiana’s Blacklisting Statute, as is readily apparent
       from its language, was enacted with a particular eye toward the conduct of railroad companies, though it
       operates to control the conduct of all employers.” Loparex, LLC v. MPI Release Techs., LLC, 964 N.E.2d 806,
       811 (Ind. 2012) (citing Ind. Code § 22-5-3-2). However, the Court did not hold the State waived its sovereign
       immunity with respect to the Blacklisting Statute, and we follow Esserman, which is the Indiana Supreme
       Court’s recent decision specifically addressing State immunity under a statute.

       Court of Appeals of Indiana | Opinion 19A-CT-1910 | April 30, 2020                              Page 12 of 13
       subsection (b) of Ind. Code § 22-5-3-1 provides that “[a]n employer that

       discloses information about a current or former employee is immune from civil

       liability for the disclosure and the consequences proximately caused by the

       disclosure, unless it is proven by a preponderance of the evidence that the

       information disclosed was known to be false at the time the disclosure was

       made.” As noted, Crouch makes no assertion that the designation was

       erroneous or based on false charges, and we cannot say reversal is warranted.

       See Brazauskas v. Fort Wayne-S. Bend Diocese, Inc., 796 N.E.2d 286, 291 (Ind.

       2003) (holding that plaintiff “does not claim that any of the alleged disclosures

       that led to her denial of the PCL position were false” and that “[s]he would

       therefore have no claim for blacklisting under the revised statute”), cert. denied,

       541 U.S. 902, 124 S. Ct. 1602 (2004).


[23]   For the foregoing reasons, we affirm the court’s dismissal of Crouch’s

       complaint.


       Affirmed.


       Najam, J., and Kirsch, J., concur.




       Court of Appeals of Indiana | Opinion 19A-CT-1910 | April 30, 2020        Page 13 of 13
