It's Dispositive: Considering Constitutional Review for First Amendment Retaliation Claims.

AuthorWilliams, Abigail E.
PositionNOTE

Bennie v. Munn, 822 F.3d 392 (8th Cir. 2016), cert. denied, 137 S. Ct. 814 (2017)

  1. INTRODUCTION

    The standard of appellate review is rarely a point of contention. (1) The proper standard is typically second nature to both judges and lawyers, and it is seldom debated during oral argument or the court's deliberations. (2) But the standard of review serves as the foundation for every appellate decision. (3) Every federal appellate brief must articulate the standard of review, (4) and courts often restate the standard in their opinions. The standard of review defines an appellate judge's discretion, and effective lawyers use the standard to help advise clients whether to appeal at all and then to frame their arguments. (5)

    In some areas of the law, though, the standard of review has not been explicitly declared or developed. (6) In these areas, the standard becomes contentious, especially where its application might be dispositive. (7) In Bennie v. Munn, state regulators subjected Robert Bennie, a financial advisor at the investment firm Linsco Private Ledger Financial ("LPL"), to heightened regulation after he made negative comments about President Barack Obama and actively participated in the Tea Party political movement. (8) Bennie filed a retaliation claim against the state regulators, alleging that the Nebraska Department of Banking and Finance's ("Department") investigation and inquiries violated his First Amendment right to free speech. (9) The Eighth Circuit discussed three potential standards of review for the "person of ordinary firmness" prong of a First Amendment retaliation claim--de novo, clear error, and independent review. (10) The court of appeals indicated that this decision was important because the standard of review would likely be dispositive. (11)

    Despite the seemingly well-defined rule that factual findings on appeal must be reviewed for clear error, U.S. Supreme Court precedent suggests an alternative standard, known as "independent" or "constitutional" review, which is used to apply facts to specified constitutional standards. (12) Bennie v. Munn hardly addresses independent review, but this precedent indicates that the conditions that typically trigger independent review are present in the question of whether government action would have chilled a "person of ordinary firmness."

    Part II of this Note introduces the facts and holding in the Eighth Circuit case, Bennie v. Munn. Part III explains the three potential standards of review considered by the court in Bennie and then provides a history of the independent review standard. Part IV gives the court's analysis and explains the court's reasoning for its holding. Part V examines the policy and legal considerations courts have and should address before deciding whether an issue should receive independent review; ultimately, this Part concludes that the person of ordinary firmness prong of a First Amendment retaliation claim warrants independent review. Part VI concludes this Note.

  2. FACTS AND HOLDING

    Until November 2010, Robert Bennie was a financial advisor at LPL. (13) As a broker-dealer, LPL and its employees are subject to regulation by the Department. (14) The Department's financial regulators investigated Bennie and LPL on multiple occasions, the most noteworthy of which occurred after a newspaper published Bennie's negative comments about President Obama. (15) Bennie subsequently filed a claim for injunctive relief from the regulators' alleged violation of his First Amendment right. (16)

    The regulators' first investigation of Bennie's activity occurred in late 2009, when a Department employee, Rodney Griess, reviewed a Certificate of Deposit ("CD") that Bennie had sent to his clients. (17) Griess determined that the CD failed to meet the Department's disclosure requirements. (18) Near the same time, Griess reviewed a television commercial in which Bennie rode a horse and offered customers "a hundred dollars towards the purchase of a firearm" if they agreed to do business with him. (19) Griess thought the offer "unusual" and scheduled a conference call for early February 2010 to talk with LPL about Bennie's marketing activity. (20)

    A few days before the conference call, the Lincoln Journal Star ran a story that highlighted Bennie's role in the Tea Party political movement. (21) The article quoted Bennie's statement that President Obama was "dishonest," a "communist," and "an evil man." (22) The article also mentioned Bennie's work with LPL and included a photograph of Bennie at his work office. (23) During the call, Department employees and LPL discussed the CD, the commercial, and the Lincoln Journal Star article. (24) Department employees also inquired whether LPL had any guidelines about agents publicly communicating their political views. (25) Not long after the call, Griess reviewed a mass mailing in which Bennie invited prospective customers to discuss their investment plans over dinner. (26) Griess concluded that the invitation violated Department rules and ordered LPL to cancel all scheduled dinners. (27) Griess threatened both Bennie and LPL with "whatever administrative action deemed necessary and appropriate under its authority... to insure compliance." (28)

    In late February, Bennie alerted Nebraska Governor David Heineman to the Department's targeting of Bennie's political views. (29) Governor Heineman then called the Department to discuss the situation. (30) After this exchange, Griess investigated another mailing from Bennie and again concluded that the advertisement violated the Department's disclosure rules. (31) In early November 2010, LPL fired Bennie. (32) In mid-2011, Bennie filed a public records request and obtained the Department's investigation files. (33) He then stopped publicly criticizing President Obama and arranging Tea Party events. (34)

    Bennie filed a retaliation claim against the state regulators on the theory that the Department's investigation and inquiries violated his First Amendment right to free speech. (35) The Eighth Circuit has held that to establish a First Amendment retaliation claim under 42 U.S.C. Section 1983, the plaintiff must show that "(1) he engaged in a protected activity, (2) the government official[s] took adverse action against him that would chill a person of ordinary firmness from continuing in the activity, and (3) the adverse action was motivated at least in part by the exercise of the protected activity." (36) Bennie argued that the state regulators' increased monitoring of his business was motivated by his political speech and that this increased monitoring would chill a person of ordinary firmness. (37) The state regulators argued that their actions were lawful because they simply made routine, "legitimate inquiries" regarding Bennie's advertising activities. (38)

    After a bench trial, the U.S. District Court for the District of Nebraska determined the state regulators' investigations of Bennie and LPL "were motivated, to varying degrees, by the content of [Bennie's] speech" and were "arguably unconstitutional." (39) Despite this finding, the court held that if there was a constitutional violation it was "de minimis" because the state regulators' actions did not chill Bennie's political speech. (40) The court dismissed Bennie's First Amendment retaliation complaint, (41) and Bennie appealed to the Eighth Circuit. (42)

    The Eighth Circuit recognized that the first element of the First Amendment retaliation claim was satisfied because Bennie indisputably engaged in a protected activity. (43) The second element, whether "the government official[s] took adverse action against [Bennie] that would chill a person of ordinary firmness from continuing in the activity," was the focus of the appeal. (44) The Eighth Circuit did not reach the third element. (45) Before analyzing whether the district court erred in concluding that the state regulators' actions against Bennie would not have chilled an ordinary person's speech, the panel stated that the standard of review would likely be dispositive. (46)

    Bennie argued that the proper standard was de novo because the district court "held the adverse acts he alleged were insufficient as a matter of law, which is necessarily a legal conclusion." (47) The Eighth Circuit rejected Bennie's argument on the ground that the district court's reference to the alleged retaliation as "de minimis" was not a legal ruling but instead, "encapsulate[d] the factual finding that, on the evidence presented, the state regulators' actions were insufficiently substantial to be actionable." (48)

    The Eighth Circuit reviewed the district court's finding for clear error, meaning that a reversal was warranted only if, "upon a review of the entire record" the court formed a "definite and firm conviction that a mistake has been committed." (49) The court held that the district court did not clearly err when it determined the state regulators' investigations into Bennie's political speech would not have "chill[ed] a person of ordinary firmness from continuing in the activity." (50)

    After the Eighth Circuit affirmed the district court's dismissal of Bennie's claim, Bennie petitioned the Supreme Court for a writ of certiorari. (51) Both Bennie and the state regulators indicated that the threshold issue on certiorari would be the proper standard of review for First Amendment retaliation claims. (52) The Supreme Court denied certiorari, leaving important questions (explored in this Note) for another day. (53)

  3. LEGAL BACKGROUND

    The standard of review defines the level of deference an appellate court grants the district court. (54) In Bennie, the Eighth Circuit discussed three potential standards of review for the person of ordinary firmness prong of a First Amendment retaliation claim--de novo, clear error, and independent review. (55) This Part first addresses the elements of a First Amendment retaliation claim. It then explains the three potential...

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