Vermont city acts unlawfully, unconstitutionally, judge finds


City of Montpelier deprives city employee of due process rights

One of the wonders of the American legal system is that you can win your case in court, only to have the court’s decision extend and magnify the underlying injustice.

This is a story about how easy it is for a city government to run roughshod over an employee’s constitutional rights, including free speech under the First Amendment and due process of law under the Fifth Amendment. And it’s a story of how hard it is, despite those rights, for that employee to get any kind of justice from the state’s judiciary.

This is a story about the Vermont judiciary failing a Vermont citizen who worked as Director of the Dept. of Planning and Community Development for the City of Montpelier, which is also the state capitol.

This is the story of how City officials first vilified City planner Gwen Hallsmith for exercising her First Amendment rights, then fired her for defending herself.

This is the story of how the City deprived Hallsmith of any semblance of reasonable due process of law in what was effectively a bureaucratic lynching, demanded by the mayor and carried out by the city manager and his assistant without out a trace of fair deliberation.

This is the story of how the Vermont Superior Court affirmed Hallsmith’s complaint of unlawful City behavior, finding that the City’s actions were blatantly unconstitutional and unfair – and then issued an order perpetuating the original injustice.

At its nasty little heart, this is a story that reflects the power of big banks to get their way, starting with their well paid legislative lobbyist, John Hollar, who also happens to be mayor of Montpelier, where there’s no hue and cry about such blatant conflict of interest. The vested interests in the City have not objected even when the bank-drenched mayor set about in early 2013 to pressure the city manager to muzzle his planning director when she failed to follow his personal party line. Her “insubordination” amounted to exercising her free speech right to support public banking.

This seems to have made the banker-lobbyist mayor mad. By his own account, the mayor-lobbyist expressed his anger over and over to the city manager, with an apparent desire for the city manager to sack this troublesome planner. In his  email of March 13, 2013, more than eight months before the firing, lawyer John Hollar wrote the city manager:

“To repeat myself ad nauseum [sic], I still don’t see how our city’s chief economic development officer can hold and promote views that are fundamentally anti-capitalist in nature.”

There is no good way to view this coercive note to an employee about an underling. Mayor Hollar acknowledges that he has been fulminating about Hallsmith ad nauseam, which means, roughly, till he’s sick of hearing himself talk. The city manager had so far failed to silence Hallsmith, as the Mayor seems to demand. So what is the city manager to think the mayor wants him to do next?

Why was Mayor Holler so steamed in 2013, and why was he so covert? What was the City of Montpelier’s official policy on public banking at the time, one might wonder. The City had no official policy on public banking, then or since or ever. Two years after Mayor Hollar set out on his behind-the-scenes warpath against the enemy of his benefactors, the City of Montpelier still has no official policy on public banking. The mayor, with a huge and obvious conflict of interest, was objecting to a City employee exercising her First Amendment right to speak freely on an issue that the City had no position on, an issue that threatens to benefit the public at some cost to banks.

The voters of the City of Montpelier have expressed an opinion on public banking. In the local election of March 2014, an official referendum on pursuing public banking received a vote of 1634-697 in favor of exploring the idea. The ballot question for public banking got 109 more positive votes than commercial bank candidate Hollar, who was re-elected mayor at the same time (beating Hallsmith by 1525-782).

The real story was the court case, not the election

Conventional wisdom at the time gave Hallsmith little chance of beating the incumbent Hollar, whose public image was largely unscathed by his secretive knife-wielding behind Hallsmith’s back (her freedom of information requests exposed some of his behavior). Hallsmith entered the mayoral race late, with little more that a month to campaign and little money to spend. Local media had spent months treating her constitutional rights like just another pie in a food fight. Reader Supported News ran a story (by this writer) on December 29, 2013, titled “Do Bank of America and Wells Fargo Run Vermont’s Capitol City?” It describes in detail what amounts to the City’s successful lynching of Hallsmith. But that was before she went to court, and long before the court vindicated her position.

During the early fall of 2013, the skirmishing, in public and private, between city manager William Fraser and department head Hallsmith was spilling over into intense exchanges on the weekends as well as during the week, some of which got into the newspapers. Exactly when the City’s effort to control Hallsmith’s free speech became an effort to terminate her is not precisely clear, but here are some of the chronological highlights of a public psychodrama in which the City clearly had only one end in mind:

September 20, 2013.  In an email to city manager Fraser, Mayor Hollar complained somewhat bitterly about Hallsmith’s involvement in the public banking issue. The email included a complaint from some of his banking friends, including a state official with a clear conflict of interest on the issue. Reiterating the sentiment of his March 2013 email, Hollar also wrote, referring to Hallsmith:

“Between this [public banking advocacy] and the planning commission fiasco, this really can’t continue. I’m not sure I see the point in my meeting with her to outline these concerns. I’ve raised them before with you, I assume they’ve been communicated to her, and nothing has changed.” [emphasis added]

The “planning commission fiasco” referred to by Hollar involved at least three commission members, with clear conflicts of interest, who were writing zoning regulations that would affect those interests. Hallsmith called attention to this situation. The city manager indicated he couldn’t see a problem. A year later, the conflicts remain unresolved.

September 27, 2013. In a memo to Hallsmith, Fraser puts her under the direct supervision of his assistant, Jessie Baker.  He tells Hallsmith that he, the City Council, and the Planning Commission have all lost confidence in her. Fraser does not mention Mayor Hollar’s complaining email the previous week. But Fraser does issue a gag order: “You will refrain from involvement in external political issues such as public banking which may impact your effectiveness as a Montpelier City official.” Fraser later partially rescinded the gag order, after Hallsmith raised the free speech issue.

October 9, 2013. In response to an earlier memo from Hallsmith defending herself, Fraser wrote a long, rambling, combative, internally contradictory memo, the essence of which was, as it stated: “I am your boss. If you are not willing or able to work within guidelines that I set then we have a serious problem.” Fraser also noted approvingly that the planning commission chair had called Hallsmith a “jihadist.” Fraser did not mention that commission chair Kim Cheney has clear conflict of interest.

During the period October 10-20, Hallsmith was away for previously scheduled commitments during her vacation.

October 28, 2013. Hallsmith’s 8-page memo responds to and critiques Fraser’s assessments of the controversy. She affirms that he is her boss. She suggests that he has defamed her. She lays out specific details of the conflicts of interest on the planning commission. And she lists seven ways she sees that her “rights as an employee and a citizen have been violated,” including denial of due process of law by the City.

October 31, 2013. Â Without making any formal inquiry and without holding any meeting, the Montpelier city council issues a statement of “unanimous and unequivocal support” for Fraser and Hollar in “this personnel matter.” The statement suggests that Hollar has been all but uninvolved.

N0vember 6, 2013. Â City manager Fraser places Hallsmith on “immediate paid administrative leave.” He says “there is just cause to support your dismissal.” He denies that his action has anything to do with public banking. In the course of four angry pages, Fraser makes many rambling accusations about events and motives, but he does not make a coherent case for “justifiable cause” for her dismissal. “You have made it impossible to perform your work effectively for the City,” Fraser writes, then offers to meet with her before making “a final decision based on the information I currently possess.” Then he directs her to turn in her keys. Later that day Hollar issues a statement saying, “I have had very little to do with this matter.”Â  The next day Fraser publishes a misleading and dishonest op ed in the local paper defending the mayor and attacking Hallsmith.

Hallsmith accepted the invitation for a meeting, which turned out to be what the City made clear would be a “Loudermill hearing,” a designation that is most useful when an employer has already decided to fire an employee. “Loudermill” refers to a 1985 U.S. Supreme Court case (470 U.S. 532) in which the court held that a public employee deserves the minimal protection of an informal, non-evidentiary hearing where she could respond to whatever the employer was calling just cause for firing her. The Loudermill hearing is not a due process hearing, it’s a temporary, legal preliminary alternative to a constitutionally valid hearing. “Loudermill” is one of those legal niceties that sounds like protection but is easily abused, usuaally without serious consequence to the employer.

The City says the law is satisfied by the performance of a charade

On November 25, 2013, the City of Montpelier provided Gwen Hallsmith with her Loudermill hearing. It lasted an hour and listening to the tape is a dismal experience. City attorney Bernie Lambek calls it a “due process hearing,” which is false. It’s not a constitutional, due process hearing in any meaningful sense, as he later makes clear. He says it’s a chance for Hallsmith to tell Fraser whatever she wants. Hallsmith and her attorney John Franco make reasonable representations that none of what Fraser has alleged amounts to just cause for termination. They also try to engage Fraser with explanations and suggestions. Fraser does not engage, he does not argue, he quibbles over a few trivial details. Assistant city manager Jessie Baker is there but never speaks, except to identify herself. Several times Hallsmith explains how she sought guidance and help with the City’s problems, but never got help. No one contradicts her. There is no smoking gun for “justifiable cause.” At the end, attorney Lambek says he doesn’t know when Fraser will make a decision. Lambek advises Hallsmith and Franco that if they want to make a proposal for going forward constructively, they should do so soon. Franco says they want to do something collaborative, something that will help people work together. Lambek talks about the weather. Fraser says nothing. He does not invite, or make, any conciliatory offering, he does not say he will fire Hallsmith the next day.

The Loudermill hearing was an empty legal fraud, not a meaningful opportunity to assess any of the mostly non-specific allegations against Hallsmith. For most of  the final 15 minutes of the meeting, she alone spoke in a quiet, conciliatory manner. The three City officials present responded with silence, except for a couple of quibbles by the city manager. They offered total silence on conciliation. The next day, November 26, without further consideration, Fraser fired his director of planning.

After Thanksgiving, Hallsmith, believing it was her right, asked for a formal, public “grievance hearing,” in which the parties could present evidence and question witnesses before a neutral presiding officer. Attorney Franco had made all this clear to the City in a five-page legal memo before November 25, when he reminded the City of Hallsmith’s right to due process of law under the Fourteenth Amendment of the U.S. Constitution. Franco put the City on notice that, among other things, in his legal opinion, “Ms. Hallsmith cannot under any circumstances be removed, without more, following today’s ‘hearing’ [as per Loudermill].”

The City apparently ignored the attorney’s arguments, responding only by firing his client without further ado. But Hallsmith’s request for an evidentiary hearing before a neutral fact finder provided the City with an opportunity to meet the legal expectations of both the Loudermill decision and the Constitution. There is no indication that the City considered careful adherence to the law, nor even an effort to create the appearance of fairness. The City has yet, almost a year later, to present a clearly articulated bill of particulars that meets any reasonable standard as a “justifiable cause” for firing Hallsmith (“justifiable cause” is required, but not well-defined, by the City Charter).

The City blew off the Constitution, with no serious effort to be lawful

The City rejected Hallsmith’s request for a credible due process hearing and instead held a star chamber (camera constellata) style proceeding on December 20, 2013. Hallsmith called it a kangaroo court. Almost a year later, in less colorful language, Superior Court Judge Helen Toor would wholeheartedly agree in her August 20, 2014, decision inHallsmith v. City of Montpelier, et al. [Docket No. 32-1-14 Wncv]. Allowing the validity of the City’s “Loudermill” hearing, Toor notes emphatically: “That informal hearing, however, must be followed by a post-termination hearing that fully complies with due process”Â [emphasis added]. 

In concluding, Judge Toor writes in part:

“Hallsmith has established that the City violated her right to due process at the post-termination grievance hearing [December 20, 2013]”¦. She challenged and proved the violation of her due process rights at her post-termination hearing. Under Rule 75 [the basis for the suit], her relief is a new post-termination grievance hearing that fully complies with due process.”

This is a very odd decision in many respects, such as:

  • Judge Toor finds, as a matter of fact, that; “The record shows that by early November 2013 the City Manager had decided to fire Hallsmith.” Since that’s a fact, then the City’s “Loudermill” hearing was an exercise in bad faith, which might be enough to invalidate any subsequent decision. The judge omits any consideration of the implications of her own fact-finding on this.
  • Judge Toor finds that the Montpelier City Charter, which controls the termination process, says inter alia:  “The employee, while appearing before the City Manager [or designee], has the right to be represented by counsel and to present any material, witnesses or evidence helpful to the employee’s case. However, the administration has similar rights.” While the judge notes many of the violations the City committed in the grievance hearing, the judge does not note that the hearing itself violates the clear intent of the charter.
  • Judge Toor notes that “Hallsmith seeks lost wages and reinstatement,” then drops those claims iunto limbo with little discussion beyond a legalistic evasion. She does not discuss the ramifications of Hallsmith’s claims, nor does the judge deny them – she just leaves them unaddressed, after observing that: “Proving the due process violation does not demonstrate that the City lacked justifiable cause for termination.”

“Proving the due process violation” is hardly proof that the City had justifiable cause either. Lack of due process proves nothing else. If anything, taken with the pattern the City has established, it casts reasonable doubt on the likelihood that the City got “justifiable cause” right when it got so much else so wrong. Judge Toor omits anything along that obvious line of argument.  She simply holds that the City’s termination procedure is unlawful and orders the grievance decision (affirming Hallsmith’s firing) vacated. She creates a new reality in which the relevant decision in force becomes the city manager’s termination letter of November 26, 2013, even though the termination process in its entirety is clearly unconstitutional and steeped in bad faith.

Official, bad decisions push the case into a second year

As a practical matter, Hallsmith remains fired (and has a new job). As a legal matter, Hallsmith’s firing remains in force despite being found unconstitutional by the Vermont Superior Court. As a judicial matter, the judge’s evasion has created a mess that perpetuates the very injustice the judge so clearly and forcefully described. Judge Toor makes no effort to explain the justice of her decision, even though it perpetuates and probably worsens a situation she has clearly found to be unjust. With no proven justifiable cause for firing Hallsmith and with no constitutional procedure to support that firing, it baffles common sense to understand why Judge Toor didn’t reinstate Hallsmith and award lost wages. Instead the judge ruled that the city manager had the authority to fire Hallsmith, that he exercised that authority unconstitutionally, but that’s no reason to vacate his decision.  Really.

Almost surely, had Judge Toor rendered something like a just verdict, the City would have appealed. As matters nowstand, the City has decided to appeal to the Vermont Supreme Court. When Judge Toor’s decision was first announced, the City issued a statement quoting the city manager as saying, ”I am disappointed that we will have to spend additional city time and resources on the process aspect of this case. We prefer to have the just cause reasons for termination considered.”

Nothing prevented the City from doing exactly that the first time around, except the City’s own decision to ignore constitutional due process. In its statement announcing the appeal, the City did not indicate what grounds the appeal would argue. The statement said in part: “The city is concerned that the due process ruling will have negative future impact for Montpelier and, potentially, for other Vermont communities. The city wishes to hold the independent hearing on the merits of the case as soon as possible and is reviewing the legal issues involved with conducting the hearing while the Supreme Court appeal is pending.”

What the City’s argument comes down to is the assertion that a government should be allowed to ignore the Constitution if abiding by it costs money.

Montpelier is unusual among Vermont communities in having a charter that gives the city manager authoritarian powers in many areas. Whether following constitutional due process will prove a burden on other Vermont communities has not yet been demonstrated. Nor has it been demonstrated that the City’s providing constitutional due process to Gwen Hallsmith, which has always been within its power, would have been more burdensome than the relatively lawless route the City chose.

At this point Hallsmith has not had a fair trial. She hasn’t had any meaningful trial at all. Anywhere.

You might think the highest government interest from the court’s perspective would be to see that government follows the law. In this instance, you would be wrong. Â 

Reader Supported News is the Publication of Origin for this work. Permission to republish is freely granted with credit and a link back to Reader Supported News.


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