Indemnity for an Employee’s Section 1983 Liability….Not All Acts Are Created Equal

The Pennsylvania Supreme Court recently held that the City of Pittsburgh had no duty to indemnify one of its police officers for a judgment entered against him in a federal civil rights lawsuit. In McGuire v. Pittsburgh, the prevailing party in an excessive force case sought a declaratory judgment that the City was statutorily obligated to indemnify its police officer under the Political Subdivision Tort Claims Act (PSTCA). The incident that gave rise to the lawsuit occurred when an off-duty officer engaged in an act of force and subdued McGuire after witnessing McGuire allegedly commit an act of vandalism. The officer, who was not in uniform at the time, called 911 and restrained McGuire until police arrived. The trial court held that the officer was not acting within the scope of his duties when he assaulted McGuire; therefore, the City was not required to indemnify the officer under the PSTCA. On appeal, the Commonwealth Court affirmed the trial court decision, and the Pennsylvania Supreme Court agreed with the Commonwealth Court.

In a matter of first impression before the Pennsylvania High Court, McGuire claimed that the City was collaterally estopped from arguing that the officer was not acting within the scope of his office or duties as a police officer since a jury had already concluded that the officer had assaulted McGuire while acting under color of state law. The City disagreed, stating that the color of state law analysis for Section 1983 claims is distinct from the scope of office or duties analysis applicable to PSTCA claims. The Supreme Court agreed with the City.

Section 1983 creates a right of action against anyone who violates the constitutional or federal statutory rights of another while acting under “color of state law.” An act committed under “color of state law” in a Section 1983 action requires the defendant’s exercise of power possessed by virtue of state law and made possible only because the defendant is clothed with the authority of state law. Under “color of state law” essentially means “under pretense of law;” thus an employee who misuses or abuses the authority given to him or her may still act under color of state law while clothed with official state authority. The “color of state law” inquiry turns on whether the public employee purported to exercise official state authority, not whether he or she was actually authorized to commit the act. 

In contrast, the indemnification provision of the PSTCA does not follow the same analysis. Pursuant to Section 8548(a) of the PSTCA, a local agency shall indemnify its employee for the payment of any judgment arising from a suit where the injury-producing act “was, or the employee reasonably believed the act was, within the scope of the employee’s office or duties.” 42 Pa.C.S. §8548(a). The critical inquiry under the PSTCA for indemnification is whether the public employee’s actions were within the scope of his office or duties or whether he in “good faith reasonably believed” that they were.

The State Court in McGuire stated that the color of state law and scope of employment inquiries do not involve precisely parallel considerations because Section 1983 “imposes liability on state officials for conduct taken within, as well as without, the scope of their authority.” The Court held that “color of state law” is not synonymous with the PSTCA’s “scope of office or duties.”

Since a public employee is not automatically deemed to have acted within the scope of his employment merely because he or she was found to have been acting under color of state law, a public employer is not required to indemnify in every instance in which an employee is subject to Section 1983 liability. Indemnity for a judgment in a Section 1983 matter will likely depend upon factors largely irrelevant to the Section 1983 “color of state law” inquiry, such as whether the employee reasonably believed that his conduct was authorized by his employer. 

Based upon the Court’s holding in McGuire, public employers should carefully review all requests for indemnification based upon an employee’s injury producing acts subject to Section 1983 liability. When considering requests for indemnification, employers should consider the factors set forth in the Restatement (Second) of Agency for determining whether an employee’s conduct falls within the scope of their employment:

• Whether the alleged acts of the employee are of the kind that he or she is employed to perform;
• Whether the act occurred substantially within the authorized time and space limits set by the employer;
• Whether the purpose of the act in question was to serve the employer; and
• Whether the alleged acts of the employee were unreasonable or outside the expectations of the employer.

In addition to considering these factors, employers should also review the training provided to their employees as well as the job expectations communicated to the employee through employee handbooks and job descriptions. These factors could assist with determining whether the employee’s actions were within the scope of the worker’s duties. In addition, employers should consult their counsel when presented with a demand for indemnification based upon an employee’s Section 1983 liability.