Councilman's Threatening Outside Counsel Law Firm into Firing Attorney May Violate First Amendment

"A Nashville city councilman threatened to withdraw business from a law firm,  which served as the city's outside counsel, due to the position one of its attorneys took as the chair of the county election commission on a tax referendum."

From Monday's decision by Sixth Circuit Chief Judge Jeffrey Sutton, joined by Judge Julia Smith Gibbons, in DeLanis v. Metro. Gov't of Nashville & Davidson County:

A Nashville city councilman threatened to withdraw business from a law firm,  which served as the city's outside counsel, due to the position one of its attorneys took as the chair of the county election commission on a tax referendum. When the attorney declined the law firm's request that he oppose the referendum, the firm fired him. The attorney sued the council member and the law firm for retaliating against his federal free-speech rights, namely his support of the tax-repeal referendum in his capacity as the county election chair….

The law firm is eligible for qualified immunity in view of the government work it performed. And it did not violate any clearly established law. We know of no case in which the First Amendment prohibited a law firm from firing one of its lawyers when the business interests of the firm, including demands from one of its clients, triggered the firing. {The allegations against Baker Donelson present a unique situation not addressed by our cases to date. Whether Baker Donelson acted honorably or not in firing DeLanis, it did not have clear notice that a law firm (or private company) violates the First Amendment by firing an employee when a government client threatens to take its business elsewhere if the employee continues to act adversely to the government. Baker Donelson, for better or worse, sought to protect its client base, not to punish DeLanis for his speech. As DeLanis acknowledges in his complaint, Baker Donelson's business interests drove its conduct. The firm, in his words, "sought to maintain and increase the client revenue it generated" from Nashville at "all times relevant to the claims." We know of no free-speech case that covers this unusual setting, and DeLanis does not identify one himself.} …

{On the other hand, the council member's alleged actions violated clearly established law, and we affirm the district court's denial of his motion to dismiss.} When a public official warns a law firm that the city may pull business from it due to the public-office actions of one of its lawyers, that suffices to deter a person "of ordinary firmness" from exercising his First Amendment rights in that office…. [C]ausing an employee's firing due to his protected speech violates the First Amendment…. Mendes had ample notice that pressuring an employer to fire an employee in retaliation for his protected speech ran afoul of the Free Speech Clause…. DeLanis worked for a private firm, and Mendes caused him to be fired. The reality that DeLanis also served as a public officer does not transform a clearly adverse action into innocent conduct.

Mendes adds that DeLanis did not adequately allege that he threatened Baker Donelson. He points out that DeLanis admits that Baker Donelson never told him who at Nashville made the threats. But DeLanis has done enough at the pleading stage to connect Mendes to the threats against Baker Donelson and his removal from the firm. Based on the statements of Baker Donelson's general counsel, DeLanis alleged that the Nashville "officials" who spoke to Baker Donelson "includ[ed]" Mendes and that other officials acted "at the direction of or in concert with Mendes."

That conclusion plausibly follows from the factual allegations in the complaint. Mendes spearheaded an effort to defeat the citizen tax referendum at issue. He "berated" DeLanis at a Commission meeting for orchestrating "pre-baked, political theater." He circulated a public letter accusing DeLanis of firing the Commission's counsel for the "hyper-partisan" reason of "push[ing] the referendum onto a ballot no matter what." He denounced DeLanis's work as "fundamentally anti-democracy." And Mendes served as a councilmember of the city government whose "officials" made the threats. Mendes's frustration with DeLanis and hearty opposition to his conduct on the Commission make it plausible that he was one of the Nashville officials, if not the key Nashville official, who threatened Baker Donelson….

More on the plaintiff's actions as election commission chair, and the resulting retaliation:

This case emerges from a debate over taxes in Nashville, Tennessee.  The Metropolitan Government of Nashville and Davidson County (Nashville for short) governs the city.  Its city council adopted a tax hike in 2020 that would raise property levies by over a third.  Some residents opposed the tax increase.  A citizen group circulated a petition to amend Nashville's charter by referendum to unwind the heightened property taxes and limit future tax increases.  Nashville opposed the referendum because it would repeal the tax increase and tie Nashville's fiscal hands in the future.

The referendum required another government entity, the Davidson County Election Commission, to determine whether to certify the proposal for a vote.  Among other responsibilities, the Election Commission ensures that a petition complies with state law before placing it on the ballot.  James DeLanis held one of the Election Commission's five seats and served as its chair. …

In handling the petition, the Election Commission asked a Tennessee court for a declaratory judgment over whether it met the criteria to qualify for the ballot.  Nashville entered the fray as well, asking the court to prevent the Election Commission from certifying the petition.  The Tennessee court concluded that the proposed referendum violated Tennessee law and that the Election Commission did not need to place it on the ballot.

The residents who opposed the tax increase did not give up.  They sought to cure the defects identified by the state court and submitted a new petition to the Election Commission.  Nashville's city council again opposed the effort.  One of its members, Robert Mendes, proposed a resolution to combat the renewed petition.  His resolution added a poison pill.  If the Election Commission permitted the second tax referendum to go on the ballot, his resolution would add a second election option banning any future tax referendums, thus barring Nashville residents from ever overturning a property tax increase.

Mendes's efforts did not deter the Election Commission.  It concluded that the new citizen tax referendum resolved its previous concerns and voted to certify it for the July 2021 ballot.  That decision spurred another legal maneuver.  The next day, the mayor and another Nashville officer asked a state court to prohibit the Election Commission from approving the new citizen tax referendum.

The Election Commission held a public meeting a few days later to discuss the second petition.  Mendes spoke and, according to DeLanis's complaint, "berated" the Commission's members for their role in this "sham," accusing them of engaging in "political theater designed to feed … the ambitions of a small percentage of the county."  He concluded by warning the Election Commission that "you might get away with it tonight, but we see you, we see what you're doing and it's not going to stand one way or the other."  These comments, to DeLanis's eyes and ears, sought to "intimidate" the Election Commission and its members from qualifying the citizen referendum for a vote.

At this point, Nashville "officials" reached out to partners at Baker Donelson, the city's outside counsel, to ask for "aid and assist[ance]" in keeping the new citizen tax referendum off the ballot.  The request extended to "influencing DeLanis as a Commissioner and as the Chair of the [Election] Commission."  The firm's general counsel, John Hicks, emailed DeLanis that "we need to have a conversation about the current election commission issues and their impact on the firm's representation of [Nashville]."  Hicks complained to DeLanis about "the mess I have to clean up" due to DeLanis's role on the Election Commission.  DeLanis's actions, Hicks explained, caused Nashville and its school board—"two major clients of the firm"—to threaten to "pull their business," much to the chagrin of Baker Donelson's partners.  Hicks also raised potential conflict-of-interest concerns created by DeLanis's roles on the Election Commission and at a law firm representing Nashville….

Judge Eric Clay dissented as to the law firm's liability, arguing that "The majority's extension of qualified immunity to the law firm in this case, Baker Donelson, marks a significant departure in our longstanding jurisprudence."