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Manahl v. State

Court of Appeals of Iowa

September 27, 2017

MICHAEL T. MANAHL, Plaintiff-Appellant,
STATE OF IOWA, Defendant-Appellee.

         Appeal from the Iowa District Court for Polk County, Robert B. Hanson, Judge.

         A former bureau chief in the Iowa Department of Agriculture and Land Stewardship challenges the grant of summary judgment for the State on his claim for wrongful discharge in violation of public policy. AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.

          Thomas J. Duff of Duff Law Firm, P.L.C., West Des Moines, and Michael J. Carroll of Coppola, McConville, Coppola, Carroll, Hockenberg & Scalise, P.C., West Des Moines, for appellant.

          Thomas J. Miller, Attorney General, and Jacob J. Larson and David S. Steward, Assistant Attorneys General, for appellee State.

          Considered by Danilson, C.J., and Tabor and McDonald, JJ.

          TABOR, JUDGE.

         The Iowa Department of Agriculture and Land Stewardship (the department) fired Michael Manahl from his position as chief of the weights and measures bureau after only four and one-half months on the job. Manahl blames the firing on his pursuit of deceptive practices by a fuel company regulated by the department. Manahl sued the State, alleging wrongful discharge in violation of public policy and a whistleblower claim. The State successfully moved for summary judgment, insisting Manahl was let go because he did not meet his supervisor's expectations for managing staff time and scheduling annual gas-tank inspections and asserting Iowa's whistleblower statute does not protect disclosures of private wrongdoing. On appeal, Manahl only seeks reversal of the court's ruling on his wrongful-discharge claim. After viewing the record in the light most favorable toward Manahl, we find questions of material fact exist on Manahl's wrongful-discharge claim regarding the cause of his firing and the department's justification for its action. Accordingly, we affirm in part, reverse in part, and remand for a trial.

         I. Facts and Prior Proceedings

         On October 12, 2012, Steve Moline, director of the consumer protection and industry services division of the agriculture department, hired Manahl as chief of the weights and measures bureau.[1] The bureau's mission is to check "gas pumps and scales . . . to affirm that they are accurate, " according to the deposition testimony of Iowa Secretary of Agriculture Bill Northey.

         Manahl testified that upon starting work, he "was informed that we needed to ensure that all the fuel meters were inspected annually, and there was some question on what staff was doing what, when, and where, to ensure that was done." After about three weeks on the job, Manahl distributed a spreadsheet to staff members to help them track their time each week and record how many inspections they could complete. He shared the proposed itinerary tracking sheets with his boss, Moline, on October 29, 2012.[2] During his first few months of work, Manahl met regularly with Moline and did not recall Moline expressing any concerns about Manahl's job performance.

         In late November 2012-about six weeks into Manahl's tenure as chief- one of the bureau's fuel inspectors discovered what he believed to be mislabeling of the octane rating of a product sold at two different prices by Molo Petroleum, a fuel company doing retail business as Big 10 Marts. The inspector found fuel containing 9.7% ethanol in both the E87 and E89 tanks-"priced $3.29 on E87 buttons and $3.39 on E89 pumps." Manahl discussed the findings with Molo general manager Glen Hasken, who insisted the practice met minimum standards set by state law and the Federal Trade Commission. Manahl questioned whether Molo was misrepresenting prices and suspected the practice amounted to consumer fraud. Hasken voiced his irritation with Manahl's belief Molo was committing a pricing violation to John Maynes, a lobbyist with the Petroleum Marketers and Convenience Stores of Iowa (PMCI), a trade association representing fuel retailers.

         The pricing matter was the subject of a meeting on December 12, 2012. The participants were Manahl, Hasken, and Maynes. Hasken explained Molo's pricing discrepancy was "a market test" in an effort to be competitive with other retailers "across the bridge in Illinois." Hasken questioned why the bureau of weights and measures cared about the price at which Molo sold its product. Manahl responded: "[W]e are not telling you what you can sell it at, but you should not be selling the 'same' product at two different prices." Although not admitting any wrongdoing, Hasken said his company had discontinued the practice.

         On December 14, 2012, Manahl drafted a letter to Hasken alleging possible violations of the state administrative code regarding fuel-rating rules and multi-tier pricing. The letter asked Molo to "cease" the practices immediately. Also as part of his research into the fuel-pricing issue, Manahl contacted an investigator with the Iowa Attorney General's Office on December 20, 2012.

         Before sending the letter, Manahl discussed the draft with Moline, who told him to do further investigation. According to Moline's affidavit, he advised Manahl that the allegations concerning mislabeling and pricing violations fell into a "gray area" of the law and asked him to delete such accusations from the letter. Manahl also recalled Moline advising him not to contact the Iowa Attorney General's Office about the allegations but, rather, to go through "proper channels" within the agriculture department. Manahl received Moline's approval to send a revised letter to Hasken in late December 2012.

         Just as the pricing issue seemed to subside, a new concern arose at a Big 10 Mart in Bettendorf. On December 28, 2012, the weights and measures bureau received several "bad gas" complaints from customers whose cars stalled after buying Molo fuel. Molo identified the problem as "phase separation" related to water in the fuel storage tank. Manahl gave an interview to a Quad Cities television station on the "phase separation" issue on January 2, 2013. Manahl also discussed Molo's pricing practices with the reporter. According to Hasken's affidavit, after the news story aired, "Molo began receiving a substantial amount of negative feedback and backlash in the local press and on social media about the pricing of Molo's gasoline."

         On January 11, 2013, Hasken wrote an email to Maynes referencing Manahl's television interviews:

Check out our media darling with weights and measures. This is the third story that he has done with this news station regarding a simple case of phase separation. Now he leaked to them . . . the same-product-being-sold issue. As far as I am concerned this is war. This guy is out of touch and out of control. None of his information is factual. Something needs to be done with this guy.

         In mid-January 2013, Hasken expressed his frustrations with the weights and measures bureau directly to Secretary Northey. According to Hasken's affidavit, Northey said he would "have his office look into the matter." Over the next few weeks, Hasken and Moline had several phone conversations and email exchanges in which Hasken vented about "W&M Bureau's handling of its investigation into Molo and Manahl's statements to the news media." Hasken demanded "a written public apology for the negative impacts Molo suffered because of the false news media coverage instigated by Manahl's false and misleading public accusations."

         PMCI lobbyist Maynes also recalled having at least five telephone calls with Moline during this time period. Maynes testified at his deposition he was "hoping to find a resolution to the matter that was satisfactory for Glenn [Hasken]" because the pricing issue was "starting to take up an awful lot of time." Maynes also obtained information on the inner workings of the weights and measures bureau, having learned from one of Manahl's employees that Manahl had been making inspectors ...

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