Supreme Court On Appeal from Superior Court, Washington Unit, Civil Division Helen M. Toor, J.
Norman R. Blais, Burlington, for Petitioner-Appellee.
Bernard D. Lambek of Zalinger Cameron & Lambek, P.C., Montpelier, for Respondents-Appellants.
PRESENT: Reiber, C.J., Dooley, Robinson and Eaton, JJ., and Morris, Supr. J. (Ret.), Specially Assigned
¶ 1. This appeal calls upon us to determine whether a post-termination judicial remedy, in the form of a breach-of-contract action or a Vermont Rule of Civil Procedure 75 petition, is sufficient to satisfy the due-process rights of an employee whose employment is protected by a “for cause” requirement and who is terminated by a municipal employer following pre-termination proceedings that do not by themselves satisfy due process. Appellee Gwendolyn Hallsmith petitioned for Rule 75 relief, arguing that the City of Montpelier failed to provide her sufficient due-process protections in terminating her employment. The trial court agreed and ordered the City to provide a new post-termination grievance hearing that fully satisfies her due-process rights. We affirm.
¶ 2. The following facts are uncontested.  Hallsmith was the planning and community development director for the City of Montpelier. Her employment was protected by a “justifiable cause” provision in the City’s personnel plan. In November 2013, City Manager William Fraser placed Hallsmith on paid administrative leave, and sent a letter to her indicating that he was contemplating firing her under the City’s personnel plan.  In the letter, the city manager described various acts of unprofessional behavior and insubordination, damage to relationships with key individuals and governing bodies within city government, and inappropriate use of City resources. He asserted that these acts were grounds for disciplinary action under the City’s personnel plan, and offered to meet with Hallsmith to consider any response she wanted to make. Hallsmith, accompanied by counsel, met with the city manager and argued her case. Following that meeting, the city manager dismissed Hallsmith from employment with the City.
¶ 3. Hallsmith timely filed a grievance pursuant to the personnel plan, which provides for review of disciplinary action. The parties agreed, and continue to agree now, that Hallsmith was a public employee with a contractual right to continue in employment absent just cause to dismiss, and that the City bears the burden of showing just cause to dismiss her. The review procedure outlined in the personnel plan provides that the grievance hearing shall be before the city manager or the city manager’s designee; that “[t]he method and manner of conducting [the] hearing... shall be at the discretion of the City Manager”; that the employee “has the right to be represented by counsel and to present any material, witnesses or evidence helpful to the employee’s case”; and that “the administration has similar rights.” The city manager designated Jessie Baker, the assistant city manager, to serve as hearing officer.
¶ 4. Hallsmith objected to the assistant city manager’s appointment as hearing officer, pointing out that the assistant city manager reported directly to the city manager and had been personally involved in the events leading up to Hallsmith’s termination. Under these circumstances, Hallsmith believed that the assistant city manager could not be an impartial adjudicator. Hallsmith also objected to many of the procedural rules for the hearing, arguing that they violated her due-process rights. Among other things, she objected to the rules of evidence that were applied in the proceeding and the denial of her right to cross-examine witnesses.
¶ 5. At the hearing, the city attorney was present for the stated purpose of advising the assistant city manager in her adjudicative capacity rather than to represent the city manager or the City’s interest. Nevertheless, the city attorney questioned Hallsmith and her witnesses extensively. Hallsmith was not permitted to cross-examine the city manager, the City’s only witness. The assistant city manager upheld the City’s termination decision.
¶ 6. Hallsmith subsequently filed a Rule 75 petition in the trial court,  seeking reinstatement to her position, reimbursement for lost compensation, and other remedies.  In her petition, Hallsmith contested the merits of her termination, arguing that the City’s decision to terminate her employment was not supported by sufficient evidence of justifiable cause, and that the hearing officer’s decision to uphold the termination was not supported by the evidence and applied the wrong legal standard. She also raised a due-process challenge to the post-termination hearing procedures. In particular, she argued that the assistant city manager was not an impartial decisionmaker and that the procedures in the grievance hearing did not satisfy her due-process rights. She specifically objected to reliance on hearsay evidence which she asserted was “excessive” and “unreliable”; to the ban on cross-examination by Hallsmith, contrasted with “vigorous and extensive cross-examination” by the city attorney; and to the city attorney’s “dual and conflicting roles as advisory to the hearing officer and presenter of the City’s case against Hallsmith.” 
¶ 7. In response, the City filed a motion to dismiss the due-process claim, arguing that Hallsmith got all the process that was due. The City did not argue that the post-termination grievance hearing was constitutionally adequate. Instead, its sole argument was that the pre-termination Loudermill meeting, combined with the availability of a post-termination judicial remedy-a Rule 75 petition challenging governmental action or a common-law action for breach of contract-satisfied due process. The City argued that Hallsmith was not entitled to a post-termination administrative hearing at all, and so any flaws in the grievance hearing were irrelevant.  On the merits, the City argued that there was credible evidence establishing justifiable cause for the assistant city manager’s decision to sustain the City’s firing of Hallsmith.
¶ 8. The trial court rejected the City’s argument that the availability of a post-termination judicial remedy in the form of a Rule 75 petition or a breach-of-contract action satisfied due process. The court relied heavily on Baird v. Board of Education, 389 F.3d 685, 692-93 (7th Cir. 2004), in which the United States Court of Appeals for the Seventh Circuit concluded that a state breach-of-contract action did not provide adequate due process to protect the rights of a school superintendent whose pre-termination hearing fell short of due-process requirements. The trial court distinguished a Second Circuit decision holding that judicial review similar to the Rule 75 review in this case was sufficient in lieu of a post-termination administrative hearing. See Locurto v. Safir, 264 F.3d 154, 173-75 (2d Cir. 2001). The trial court granted the Rule 75 petition and ordered the City “to provide Hallsmith a new grievance hearing that fully satisfies Hallsmith’s due process rights, including her rights to confront adverse witnesses and to an impartial adjudicator.”  The City appeals.
¶ 9. The essential facts concerning the proceedings below, as opposed to the merits of the City’s termination of Hallsmith, are not in dispute. “We review questions of law, including whether the requirements of due process have been satisfied, de novo.” In re New ...