William C. Jacobs (argued), Lexington, Ky., for plaintiff-appellant, cross-appellee.

William C. Jacobs, Lexington, Ky., pro se.

Edward W. Gardner, Theresa L. Holmes (argued), Lexington-Fayette Urban County Government, Dept. of Law, Lexington, Ky., for defendants-appellees, cross-appellants.

Before JONES and RYAN, Circuit Judges, and HILLMAN, Chief District Judge.*

HILLMAN, Chief District Judge.

The parties to this 42 U.S.C. Sec. 1983 civil rights action appeal and cross-appeal the adverse portions of the judgment rendered by the United States District Court for the Eastern District of Kentucky. We affirm in part, reverse in part, and remand with instructions.

I.

In the early 1970s Kentucky joined the growing number of states that authorize consolidation of city and county governments into unified local governments. In 1974 the City of Lexington merged with Fayette County to form defendant, appellee, and cross-appellant Lexington-Fayette Urban County Government (the government). That same year, the Kentucky General Assembly adopted a merit system to govern certain personnel matters arising in the new urban county governments. Ky.Rev.Stat. Sec. 67A.200 et seq. (1989). In accordance with this merit system, the Lexington-Fayette Urban County Government entered into an "inviolable contract" with its employees. By the terms of this employment contract, the government obligated itself to operate under sections 67A.230 to 67A.330 of the revised statutes and "all substantial matters" contained in the government's "first ordinance" as defined by statute. Ky.Rev.Stat. Sec. 67A.330 (1989).

In 1980 the government enacted an ordinance, later codified at section 23-20 of its Code of Ordinance, regulating fire department job promotions. In general terms, section 23-20 provided that promotion applicants successfully completing a series of examinations would be placed on the promotion list for the next highest rank in the order determined by their examination performance. The promotion list for each rank remained in effect for two years. Thirty days before the expiration of an existing list, the government would develop a new list reflecting the results of new examinations. When the new list took effect at the end of an existing list's two-year life, applicants placed on the existing list could not carry over their placements from the existing list to the new list.

Section 23-20 placed fire department promotion authority in the government's mayor, subject to legislative approval. When a vacancy occurred at a particular rank, the mayor was required to fill or abolish it within ninety days. Vacancies would be filled sequentially from the promotion list for that particular rank over the two-year life of the list. In other words, if no vacancy were abolished within the ninety days, the promotion applicant placed first on a list would receive promotion to the first vacancy in the next highest rank that occurred within two years of the list's creation. The promotion applicant placed second would receive promotion to the second vacancy, and so on.

Plaintiff, appellant, and cross-appellee Franklin Thomas Charles is a captain in the government's fire department. He successfully completed the relevant fire department promotion examinations conducted by the government in January, 1981, and was placed fifth on the promotion list for the rank of major. Under section 23-20, the major's promotion list containing Charles' name expired in January, 1983. Defendant, appellee, and cross-appellant David Cooke is the government's personnel director. Among his responsibilities is the creation of new fire department promotion lists thirty days before the expiration of existing lists. Cooke mistakenly failed to prepare a new promotion list for the rank of major before the January, 1983 expiration of the list containing Charles' name. In fact, Cooke did not schedule new examinations and prepare a new major's promotion list until late 1984 or early 1985.

On May 1, 1984, a vacancy occurred at the major's rank. Section 23-20 consequently required defendant, appellee, and cross-appellant Scotty Baesler, the government's mayor, to fill or abolish the vacancy within ninety days, or by July 30. At the time the May 1 vacancy occurred, Charles topped the expired January, 1981 list for promotion from captain to major. Baesler did not abolish the major's vacancy on or before July 30. He likewise failed to promote Charles.

When it became clear to Charles in the summer of 1984 that the government was not going forward with the promotion process, he filed a grievance. After Charles met with several fire department supervisors and Baesler, the government denied the grievance, explaining that Charles would not be promoted because the promotion list containing his name had expired in January, 1983, and the vacancy at issue was scheduled to be abolished in the near future. The government in fact abolished the vacancy on November 1, 1984.

On November 21, 1984, Charles filed this 42 U.S.C. Sec. 1983 action in the United States District Court for the Eastern District of Kentucky, naming the government, Baesler and Cooke as defendants. Charles contended that the government and its officials violated his federal constitutional rights by failing to promote him from captain to major. He sought declaratory and injunctive relief, back pay, a punitive damages award against Baesler, and an attorney's fee.

Following discovery, the parties submitted cross-motions for summary judgment. On March 1, 1988, the district court entered partial summary judgment for Charles, holding that the government, Baesler and Cooke deprived him of a contractually-based property right to promotion without due process of law. The district court rejected Charles' argument that the failure to promote denied him equal protection, and the court did not address Charles' impairment of contract claim. The court below additionally ruled that qualified immunity protected Baesler and Cooke from individual liability, and that punitive damages against Baesler were not appropriate.

To remedy the due process violation, the district court ordered back pay in the amount of the difference between a captain's and a major's salary between August 1, 1984, the date the court found Charles should have been promoted, and November 1, 1984, the date the government abolished the major's position at issue. The court declined to order the government and officials to promote Charles to major, reasoning that Charles had no entitlement to the position after its November 1, 1984 abolition. On March 14, 1989, the district court denied post-judgment motions, and awarded attorney-appellant William C. Jacobs, Charles' lawyer, a 42 U.S.C. Sec. 1988 attorney's fee reduced to reflect incomplete success on Charles' section 1983 claim.

On April 13, 1989, Charles appealed the adverse portions of the district court's judgment, including the failure to order permanent promotion, the denial of his equal protection claim, the failure to address his impairment of contract claim, and the court's qualified immunity and punitive damages rulings. Jacobs appealed the reduction of his attorney's fee. The government, Baesler and Cooke thereafter cross-appealed, claiming the district court erred by finding a due process violation, and by approving an unsubstantiated hourly rate for purposes of the attorney's fee award.

II.

The primary question presented by this appeal is whether substantive due process bars the government and its officials from breaching a contractual responsibility to promote Charles. We hold that substantive due process does not protect the run-of-the-mill contractually-based property interest present in this case. We likewise hold that the government and officials did not impair the obligation of Charles' employment contract, and that they did not deny Charles equal protection of the law. Our resolution of this case on the merits accordingly moots the subsidiary immunity, remedial, and attorney's fee issues raised by the parties.

We review the disposition of the merits below on summary judgment under the same standard as the district court. Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment shall issue if the evidence shows that the material facts are not in dispute, and the moving party is entitled to judgment as a matter of law. See generally Street v. J.C. Bradford & Co., 886 F.2d 1472, 1476-81 (6th Cir.1989) (detailing "new era" in summary judgments). The parties do not dispute the material facts. Consequently, our decision, like the district court's, depends solely on legal analysis.

To recover under section 1983, Charles must show, among other things, that Baesler, Cooke, or the government violated a right, privilege, or immunity secured to him by federal law. See, e.g., Huron Valley Hospital, Inc. v. City of Pontiac, 887 F.2d 710, 714 (6th Cir.1989). As suggested above, Charles contends that the failure of the government and its officials to promote him to major violated three rights secured by the United States Constitution: his right not to be deprived of property without due process of law, secured by the Fourteenth Amendment; his right not to be denied equal protection of the law, also secured by the Fourteenth Amendment; and his right not to have the obligation of his contracts impaired, secured by Article I, Section 10. We consider each of these contentions in turn.

A.

The Fourteenth Amendment's Due Process Clause protects life, liberty and property. Cleveland Board of Education v. Loudermill, 470 U.S. 532, 538 n. 3, 105 S. Ct. 1487, 1491 n. 3, 84 L. Ed. 2d 494 (1985). Charles does not claim a life or liberty interest in job promotion. He does claim a property interest on the basis of his employment contract. No doubt exists that contractual rights are a species of property within the meaning of the Due Process Clause. Perry v. Sindermann, 408 U.S. 593, 601-02, 92 S. Ct. 2694, 2699-2700, 33 L. Ed. 2d 570 (1972).

The government and its officials vigorously dispute that Charles' interest in promotion is a term or benefit of his "inviolable contract" under section 67A.330 of the revised statutes. They specifically argue that section 23-20 of the Code of Ordinance does not create a right to promotion from an expired promotion list. They contend further that the continuing vitality of an expired promotion list in the absence of its proper replacement list is not a "substantial matter" incorporated into Charles' inviolable employment contract. Finally, they assert that in any event section 67A.330 of the revised statutes does not apply to fire department members.

The court below rejected these arguments and found that the relevant statutes and ordinances conferred upon Charles a contractual right to be promoted to major. In the absence of any discussion of these state-law issues by the Kentucky courts, we see no cause to disturb the reasoned conclusions of the experienced Kentucky district judge. Bishop v. Wood, 426 U.S. 341, 345-47, 96 S. Ct. 2074, 2077-79, 48 L. Ed. 2d 684 (1976). We therefore proceed with the understanding that the government, Baesler and Cooke did indeed breach their contract to promote Charles, or, in constitutional parlance, deprived Charles of a contractually-based property interest.

We do not believe, however, that the deprivation occurred without due process of law. In any due process case, after the plaintiff establishes deprivation of life, liberty or property, "the question remains what process is due." Morrissey v. Brewer, 408 U.S. 471, 481, 92 S. Ct. 2593, 2600, 33 L. Ed. 2d 484 (1972). Due process may impose either substantive or procedural limitations upon a particular deprivation. Kelley v. Johnson, 425 U.S. 238, 244, 96 S. Ct. 1440, 1444, 47 L. Ed. 2d 708 (1976). The present case, as Charles insistently repeats in his brief, involves substantive, not procedural, due process. In other words, Charles does not contend that the government and its officials could not deny his promotion without first according him fair notice and hearing. Rather, Charles argues that he could not constitutionally be denied promotion at all. He asserts a categorical substantive due process right to promotion.

We conclude that no such right exists. Most, if not all, state-created contract rights, while assuredly protected by procedural due process, are not protected by substantive due process. The substantive Due Process Clause is not concerned with the garden variety issues of common law contract. Its concerns are far narrower, but at the same time, far more important. Substantive due process "affords only those protections 'so rooted in the traditions and conscience of our people as to be ranked as fundamental.' " Michael H. v. Gerald D., --- U.S. ----, 109 S. Ct. 2333, 2341, 105 L. Ed. 2d 91 (1989) (plurality opinion) (quoting Snyder v. Massachusetts, 291 U.S. 97, 105, 54 S. Ct. 330, 332, 78 L. Ed. 674 (1934) (Cardozo, J.), overruled on other grounds, Duncan v. Louisiana, 391 U.S. 145, 88 S. Ct. 1444, 20 L. Ed. 2d 491 (1968), Malloy v. Hogan, 378 U.S. 1, 84 S. Ct. 1489, 12 L. Ed. 2d 653 (1964)). It protects those interests, some yet to be enumerated, "implicit in the concept of ordered liberty," Palko v. Connecticut, 302 U.S. 319, 325, 58 S. Ct. 149, 152, 82 L. Ed. 288 (1937) (Cardozo, J.), overruled on other grounds, Benton v. Maryland, 395 U.S. 784, 89 S. Ct. 2056, 23 L. Ed. 2d 707 (1969), Duncan v. Louisiana, 391 U.S. 145, 88 S. Ct. 1444, 20 L. Ed. 2d 491 (1968), like personal choice in matters of marriage and the family. See, e.g., Washington v. Harper, --- U.S. ----, 110 S. Ct. 1028, 1038, 108 L. Ed. 2d 178 (1990); Michael H. v. Gerald D., 109 S. Ct. at 2341-42; Turner v. Safley, 482 U.S. 78, 94-96, 107 S. Ct. 2254, 2265, 96 L. Ed. 2d 64 (1987); Zablocki v. Redhail, 434 U.S. 374, 383-86, 98 S. Ct. 673, 679-81, 54 L. Ed. 2d 618 (1978); Smith v. Organization of Foster Families, 431 U.S. 816, 842, 97 S. Ct. 2094, 2108-09, 53 L. Ed. 2d 14 (1977); Moore v. City of East Cleveland, 431 U.S. 494, 498-506, 97 S. Ct. 1932, 1934-39, 52 L. Ed. 2d 531 (1977) (plurality opinion); Cleveland Board of Education v. LaFleur, 414 U.S. 632, 639-40, 94 S. Ct. 791, 796, 39 L. Ed. 2d 52 (1974).

State-created rights such as Charles' contractual right to promotion do not rise to the level of "fundamental" interests protected by substantive due process. Routine state-created contractual rights are not "deeply rooted in this Nation's history and tradition," and, although important, are not so vital that "neither liberty nor justice would exist if [they] were sacrificed." Bowers v. Hardwick, 478 U.S. 186, 191-94, 106 S. Ct. 2841, 2844-46, 92 L. Ed. 2d 140 (1986) (quoting Moore v. City of East Cleveland, 431 U.S. at 503, 97 S.Ct. at 1937-38 and Palko v. Connecticut, 302 U.S. at 326, 58 S.Ct. at 152).

In the present case, we do not believe liberty and justice are threatened, in the constitutional sense, by the failure of the government and its officials to abide by their contract with Charles. Governments breach contracts virtually every day without dire consequences ensuing to the human dignity or basic autonomy of the promisees. Indeed, legal philosophers have debated the degree to which the law should properly characterize any breach of contract as an "injustice" in the sense of moral default. See generally Atiyah, The Legacy of Holmes Through English Eyes, 63 B.U.L.Rev. 341 (1983). In any event, we are satisfied that in the usual breach of contract case such as this, failure to meet contractual obligations cannot be equated with the sort of injustice inherent in "egregious abuse of government power." Huron Valley Hospital, Inc. v. City of Pontiac, 887 F.2d at 715; Vinson v. Campbell County Fiscal Court, 820 F.2d 194, 198 (6th Cir.1987). See also Wilson v. Beebe, 770 F.2d 578, 586 (6th Cir.1985) (en banc). Similarly, any claim that Charles' right to promotion, which stems from the adoption of section 23-20 in 1980, is deeply rooted in our national history and tradition is both legally and historically indefensible. Bowers v. Hardwick, 478 U.S. at 194, 106 S.Ct. at 2846.

The case law directly on point buttresses our conclusion, although it is neither precedential nor unanimous. The Supreme Court has assumed, without deciding, that substantive due process might protect some state-created, contractually-based property interests. Regents of the University of Michigan v. Ewing, 474 U.S. 214, 222-23, 106 S. Ct. 507, 511-13, 88 L. Ed. 2d 523 (1985) (assumed implied contractual right to continued medical school enrollment). See also Harrah Independent School District v. Martin, 440 U.S. 194, 198, 99 S. Ct. 1062, 1064, 59 L. Ed. 2d 248 (1979). The only member of the Court who explicitly tested this assumption, however, found it wanting in the circumstances at issue. In his Ewing concurrence, Justice Powell explicitly adopted the position we put forward today: