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December 16, 1996


The opinion of the court was delivered by: SIMANDLE

 SIMANDLE, District Judge:

 I. Background

 At all times relevant to this lawsuit, plaintiffs McCusker and Palamaro were employed by the Atlantic City police department. Both served on the Atlantic County Narcotics Task Force ("task force") until May 11, 1993, when they were returned to uniform patrol. (Am. Compl. P 1; Def. Br. ex. L, Personnel Order No. 34). While on the task force, plaintiffs received a three percent differential in pay because of their assignment as plain clothes detectives. (Am. Compl. P 1; Agreement, Art. XXIII). When plaintiffs were returned to uniform patrol, they lost the pay increase. (Id. at P 5).

 Plaintiffs allege that they were constructively demoted in retaliation for their voluntary attendance at the trial of fellow officer Dennis Munoz, who was a criminal defendant in the case State of New Jersey v. Dennis Munoz, Indictment No. 92-09-0007. (Am. Compl. PP 2 and 6). Plaintiffs observed the proceedings on their own time, and during breaks in the trial, they "conversed with Officer Munoz and his wife on a purely social level, offering words of moral support to Munoz and his wife." (Id. at P 2). The trial of Officer Munoz was highly publicized and had allegedly caused division within the police department between those who supported Munoz and those who didn't. (Pl. Br. at 11; Id., ex. J, Atlantic City Press articles).

 On April 29, 1993, Officer Munoz and his attorney sent to each plaintiff a form letter expressing appreciation for the moral support provided during the trial. (Am. Compl. P 3). The letters were allegedly opened and read before plaintiffs received them. (Id.) Several days later, plaintiffs were notified that they would be transferred from the task force back to the Atlantic City Precinct. (Id. at P 4). Plaintiffs allege that they had been quite successful on the task force and had been scheduled for future training at the time of their demotions. (McCusker Dep. at 47-8, 56). Defendant Chief Rifice claims that plaintiffs were brought back from the task force after serving for several years -- longer than any other officer -- so that other officers could receive training in drug interdiction. (Rifice Dep. at 38).

 Defendants now seek summary judgment, arguing that plaintiffs have failed to establish their § 1983 claims as a matter of law, that defendants cannot be liable for punitive damages, and that plaintiffs have failed to exhaust their administrative remedies.

 II. Discussion

 A. Summary Judgment Standard

 The standard for granting summary judgment is a stringent one. A court may grant summary judgment only when the materials of record "show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). In deciding whether there is a disputed issue of material fact the court must view the evidence in favor of the non-moving party by extending any reasonable favorable inference to that party. See Aman v. Cort Furniture Rental Corp., 85 F.3d 1074, 1080-81 (3d Cir. 1996); Kowalski v. L & F Products, 82 F.3d 1283, 1288 (3d Cir. 1996); Meyer v. Riegel Products Corp., 720 F.2d 303, 307 n.2 (3d Cir. 1983), cert. denied, 465 U.S. 1091, 79 L. Ed. 2d 910, 104 S. Ct. 2144 (1984). The threshold inquiry is whether there are "any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986).

 Supreme Court decisions mandate that: "when the nonmoving party bears the burden of persuasion at trial, the moving party may meet its burden on summary judgment by showing that the nonmoving party's evidence is insufficient to carry its burden of persuasion at trial." Brewer v. Quaker State Oil Refining Corp., 72 F.3d 326, 329-330 (3d Cir. 1995) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1987)). However, "the nonmoving party creates a genuine issue of material fact if it provides sufficient evidence to allow a reasonable jury to find for him at trial." Brewer, 72 F.3d at 330 (citing Anderson v. Liberty Lobby, 477 U.S. 242 at 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505). Once the moving party has carried its burden of establishing the absence of a genuine issue of material fact, "its opponent must do more than simply show that there is some metaphysical doubt as to material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 89 L. Ed. 2d 538, 106 S. Ct. 1348 (1986). Thus, if the non-movant's evidence is merely "colorable" or is "not significantly probative," the court may grant summary judgment. Anderson, 477 U.S. at 249-50.

 B. Defendants' Argument that Plaintiffs' § 1983 Claims Fail

 Section 1983 provides a remedy against an individual or entity acting under the color of state law who deprives a plaintiff of a constitutional right. Plaintiffs assert this federal cause of action on the basis of a violation of their First and Fourteenth Amendment rights. They allege that their retaliatory demotions violated their First Amendment rights to freedom of association and free speech, and that the loss of the three percent pay differential resulted in a deprivation of a property interest without due process. The court will address plaintiffs' due process claims first.

 1. Due Process Rights

 Plaintiffs claim that they have a property interest in their positions under the Fourteenth Amendment which was violated when they were transferred from their assignments as detectives on the Narcotics Task Force to uniform patrol. As a result of the transfer, plaintiffs lost the three percent pay differential that accompanies detective status.

 To establish a property interest in a benefit protected by due process, a plaintiff must show a legitimate claim of entitlement to it. Board of Regents v. Roth, 408 U.S. 564, 33 L. Ed. 2d 548, 92 S. Ct. 2701 (1972). Defendants argue that plaintiffs were not entitled to the detective pay differential because their assignment to the task force was temporary. Although McCusker and Palamaro had served four and six years, respectively, the average stay on the task force was much shorter. (Murray Dep. at 68-69). Plaintiff Palamaro admits in his deposition that he did not expect the assignment to last until his retirement. (Palamaro Dep. at 20).

 Further, the Collective Bargaining Agreement speaks of the pay differential as being available to "an employee temporarily assigned to the detective Bureau or other plain clothes unit." (Pl. Br., ex. G, Agreement, Art. XXIII) (emphasis added). The Agreement goes on to specify that "in the event an employee returns to uniform duty he or she shall no longer receive the differential as described herein." (Id.). This evidence supports the argument that plaintiffs had no legitimate expectation in their positions on the task force.

 Plaintiffs respond that under New Jersey law, a member of the police department cannot be reduced in rank except for just cause. N.J.S.A. 40A: 14-147. The flaw in this argument as applied to plaintiffs, however, is that the Atlantic City Police Department does not recognize a detective as a higher ranking position than a patrolman. The Atlantic City Police Department Rules and Regulations includes an "Order of Rank" which does not distinguish a detective from a patrolman. (Def. Br. ex. G). Plaintiff Palamaro's deposition testimony further indicates that he had no expectation that detectives and patrolmen were of different ranks.

A. No, I'm saying patrolman and detectives are on the same line, even though the ...

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