IOWA CITY, Iowa — Gov. Terry Branstad and his top aides could be held personally liable if a jury decides that they defamed and breached a contract of the workers’ compensation commissioner in a push to force his resignation, the Iowa Supreme Court ruled Friday.
The 5-2 decision has ramifications for the Branstad administration because it could affect pending lawsuits beyond that of Workers’ Compensation Commissioner Christopher Godfrey, which returns to a lower court for trial. The ruling sets a new standard that allows state officials to more easily be sued as individuals. That means they — not the state — will be forced to pay damages and attorneys’ fees if juries find that they broke the law and were acting outside the scope of their employment.
“I think it’s a victory for all Iowans. It basically says that nobody is above the law — nobody — including the governor and maybe especially the governor,” said Godfrey’s attorney, Roxanne Conlin.
Dissenting Justice Thomas Waterman said the ruling would make people think twice about entering public service and hamper their performance in office.
“Why take a government job if your personal savings could be lost in a lawsuit?” he wrote. “Why give a negative job performance evaluation of someone you supervise if he can sue you personally for defamation and take that case all the way to trial?”
Godfrey was appointed by Democratic Gov. Chet Culver in 2009 and confirmed by the Iowa Senate to a six-year term as commissioner, in which he decides appeals involving whether businesses and insurers must compensate workers for injuries. After Republican Branstad won election in 2010, he requested Godfrey’s resignation.
Godfrey declined, arguing that the commissioner was supposed to be independent and that his term didn’t expire until 2015. He says that Branstad’s then chief of staff Jeff Boeyink and legal counsel Brenna Findley tried to force him out by threatening to slash his salary if he stayed. Ultimately, the governor cut Godfrey’s salary by nearly $40,000, reducing it from $112,000 to $73,000, the lowest allowed. Branstad, Lt. Gov. Kim Reynolds and other aides defended the actions by publicly painting Godfrey as a poor commissioner who was hurting business. He says that isn’t true.
Godfrey, who is gay, filed a lawsuit against Branstad, Reynolds, Iowa Workforce Development Director Teresa Wahlert, Boeyink, Findley and former Branstad spokesman Tim Albrecht. He alleges that he was discriminated against based on his sexual orientation, defamed by their statements, extorted and had his employment contract rights violated, among other claims.
The attorney general’s office certified that Branstad and his aides were acting within the scope of their employment, guaranteeing that taxpayers would cover their legal costs and the lawsuit would proceed only against the state. The certification prompted a judge to dismiss some of Godfrey’s claims, including those for defamation and contract interference, because Iowa law doesn’t allow those claims against the state.
Friday’s ruling reinstated all of those claims. Writing for the majority, Justice David Wiggins said a jury should hear the claims and decide whether each defendant was acting within the scope of their employment. He said the ruling would protect taxpayers from having to cover the damages and legal fees of employees who commit misfeasance.
Branstad’s attorney, George LaMarca, said the decision created a new rule that ultimately won’t change the outcome of the case.
“We fully expect the trial judge will find — as the attorney general did — that the governor was acting within his official duties both when he did not pay the commissioner the highest salary allowed by law and also when he gave the public his reasons,” said LaMarca, who’s received $525,000 in taxpayer-funded legal fees.
Conlin said she will now be able to take the depositions of Branstad, Reynolds and other officials in the coming months.
Godfrey said he was “very happy” not only for himself but other workers with pending lawsuits.
The ruling could affect the case filed by fired Division of Criminal Investigation special agent Larry Hedlund, who contends the governor defamed him by falsely criticizing his performance at a news conference. Hedlund was removed from duty days after pursuing the governor’s speeding SUV and complaining that troopers driving Branstad and Reynolds endangered public safety.