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Thompson v. Peterson, 546 N.W.2d 856 (N.D. 1996)
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Filed Apr. 25, 1996

IN THE SUPREME COURT

STATE OF NORTH DAKOTA
J. Malcolm Thompson, Plaintiff and Appellant
v. Larry R. Peterson, David B. Danbom, Yur-Bok Lee, Gerald Anderson, Thomas Isern, Harriette McCaul, Rick D. Johnson, all of whom are and/or were persons employed within the teaching faculty and/or administration at North Dakota State University, being named herein as having acted in both their individual and official capacities, and North Dakota State University, a publicly supported institution of higher learning under the control of the North Dakota State Board of Higher Education, Defendants and Appellees
Civil No. 950276
Appeal from the District Court for Cass County, East Central Judicial District, the Honorable Norman J. Backes, Judge.
AFFIRMED.
Opinion of the Court by Meschke, Justice.
David C. Thompson (argued), of David C. Thompson, P.C., P.O. Box 5235, Grand Forks, ND 58206-5235, for
plaintiff and appellant.
Douglas A. Bahr (argued), Assistant Attorney General, Attorney General's Office, 900 East Boulevard Ave., Bismarck,
ND 58505-0041, and Sara Beth Gullickson (no appearance), Assistant Attorney General, P.O. Box 1077, Moorhead,
MN 56561-1077, for defendants and appellees.


[546 N.W.2d 858]

Thompson v. Peterson
Civil No. 950276


Meschke, Justice.
J. Malcolm Thompson appealed from a judgment dismissing his lawsuit against North Dakota State University (NDSU), and Larry Peterson, David Danbom, Yur-Bok Lee, Gerald Anderson, Thomas Isern, Harriette McCaul, and Rick Johnson in their official capacities as members of the faculty and administration of NDSU and in their individual
capacities (collectively referred to as defendants).(1) Thompson sought damages and injunctive relief to remedy termination of his nontenured position as an assistant history professor. We affirm.
I
In 1991 Thompson accepted a nontenured, probationary appointment with NDSU as an assistant professor of history. Thompson's employment agreement with NDSU was expressly governed by the State Board of Higher Education Regulations on Academic Freedom, Tenure, and Due Process and by the NDSU University Senate Policy Implementing Procedural Regulations. NDSU renewed Thompson's probationary appointment for the 1992-93 and 1993-94 academic years.
On April 22, 1994, Peterson, the chair of the history department, notified Thompson that the tenured faculty in the history department had "concluded that [Thompson was] not making satisfactory progress toward successful promotion and tenure, especially in the area of teaching," and had "voted to recommend to the Dean of the College of Humanities and Social Sciences and Vice President for Academic Affairs that [his] probationary appointment should not be renewed." On April 28, Thompson made a written request to Peterson for a statement of "reasons that contributed to the decision for non-renewal of my probationary, tenure-track appointment." On April 29, Peterson informed Thompson that Section 351C.2 of the NDSU Policy Manual directed that nonrenewal decisions "'shall be made in every instance by the University President,'" and that a nonrenewal decision had not yet been made in his case.
Meanwhile, Isern, the Dean of the College of Humanities and Social Sciences, and Sharon Wallace, Vice President for Academic Affairs, accepted the history department's recommendation for nonrenewal and forwarded it to NDSU President Jim Ozbun. On May 13, 1994, Ozbun notified Thompson that his faculty appointment at NDSU would not be renewed beyond the 1994-95 academic year and invited Thompson to "consult NDSU Policies 350 and 351 for your further procedural rights." Thompson did not pursue any further internal administrative remedies, and

[546 N.W.2d 859]
he received a "terminal contract" for the 1994-95 academic year.(2)
Thompson sued the defendants in Grand Forks County in the Northeast Central Judicial District, alleging, in substance, a breach of his employment contract; an infringement of his state constitutional rights to substantive and procedural due process, freedom of speech, and protection of his reputation; and a violation of the "secret personnel file" provisions of N.D.C.C. Ch. 15-38.2. The district court in Grand Forks County, the Honorable Kirk Smith, granted an ex parte temporary restraining order that prohibited NDSU from terminating Thompson and from hiring a replacement.
The defendants demanded a change of venue to Cass County in the East Central Judicial District.(3) The defendants also moved to vacate the temporary restraining order and to dismiss Thompson's complaint. Judge Smith granted the defendants' motion to change venue to Cass County, but declined to rule on the remaining motions.
The action was then venued in Cass County, and eventually assigned to the Honorable Norman J. Backes. Judge Backes dismissed Thompson's complaint, concluding that the decision not to renew Thompson's teaching contract was made by NDSU President Ozbun on May 13, 1994, and that Thompson did not make a written request to Ozbun for the reasons for the nonrenewal decision as required by Section 605(c) of the State Board Regulations. Judge Backes ruled that Thompson's April 28, 1994 request to Peterson was misdirected and premature, and because Thompson had failed to exhaust his administrative remedies, the court lacked jurisdiction to hear his lawsuit. Thompson appealed.
II
Thompson contends Judge Smith should have remained the presiding judge in this lawsuit, and Judge Backes's dismissal was without jurisdiction and was null and void. Thompson asserts a change of venue and the designation of a presiding judge are two different subjects. He argues that, although the defendants had a threshold statutory right to have this lawsuit tried in Cass County, they waived their right to file a demand for change of judge by requesting a change of venue from Grand Forks County to Cass County. Thompson's argument mistakes the effect of a change of venue from one judicial district to another.
Jurisdiction is the power and authority of a court to hear and decide a case, Rudnick v. City of Jamestown , 463 N.W.2d 632 (N.D. 1990), while venue means the place where the power to decide a case is to be exercised. Selland v. Selland, 494 N.W.2d 367 (N.D. 1992). Under N.D. Const., Art. VI, 8 and NDCC 27-05-06, district courts in North Dakota have authority to hear and determine civil actions. See Rudnick (district court had jurisdiction to hear claim that employee's demotion violated due process). The district court in Cass County had authority to hear this lawsuit, and the question here is the effect of the change of venue on the assignment of the judge.
Subject to other specific exceptions in NDCC Ch. 28-04, venue for a civil action is generally "in the county in which the defendant or one of the defendants resides at the time of the commencement of the action." NDCC 28-04-05; Varriano v. Bang, 541 N.W.2d 707 (N.D. 1996). An action may be tried in an improper venue "unless the defendant, before the time for answering expires, demands in writing that the trial be had in the proper county." NDCC 28-04-06; Varriano. If the county designated for trial in a complaint is an improper venue, the court may change the place of trial. NDCC 28-04-07(1). Under NDCC 27-05-26, a change of venue may be taken from "one judge to another in the same district or in another district, or from one county to another, or from one district to another in the manner provided by law." When venue is changed, NDCC 28-04-08 directs that all further proceedings

[546 N.W.2d 860]
must be had in the county where the place of trial is changed to. With exceptions not relevant here, NDCC 27-05-22 declares that no judge of a district court may hear any action in a judicial district where the judge was not elected.
When a change of venue has been granted, our civil venue statutes do not explicitly allow the judge granting the change to follow the case from one judicial district to another judicial district. Compare NDRCrimP 21(c) ("Whenever the place of trial is change as provided in this Rule . . . the judge ordering the transfer shall preside at the trial.") When our venue statutes are construed together to give meaning to each provision, the effect of a change of venue transfers the case from "one judge to another . . . in another district," and precludes a judge who grants a change of venue in one judicial district from following the case to a judicial district where the judge was not elected.
To hold otherwise would permit a claimant to begin his lawsuit in a county in the wrong judicial district, but retain the "wrong" judge when the defendant exercises the virtually automatic transfer of venue to the proper county. See NDCC 28-04-06 and 28-04-07. The selection of the judge sought by Thompson, and the sweeping disqualification of the judges in the proper judicial district would contravene the correct procedures for changing a judge detailed in NDCC 29-15-21, and would permit judge-shopping in its worst sense.
Here, Judge Smith, a duly-elected judge in the Northeast Central Judicial District, granted a change of venue to Cass County in the East Central Judicial District. Under NDCC 27-05-22 and 27-05-26, the change of venue precluded Judge Smith from presiding over the case outside of the judicial district where he was elected after he transferred the case to a county in another district. Judge Backes, a duly-elected judge in the East Central Judicial District, had jurisdiction to decide this lawsuit.
III
Thompson asserts the trial court erred in dismissing his lawsuit for failure to exhaust his internal administrative remedies at NDSU. He contends he substantially complied with NDSU's procedures for exhausting his administrative remedies, and argues those remedies were precluded under circumstances analogous to Hom v. State, 459 N.W.2d 823
(N.D. 1990). We disagree.
In describing our standard of review, the parties have relied upon cases involving dismissals for failure to state a claim upon which relief can be granted under NDRCivP 12(b)(v). SeeWilliams v. State, 405 N.W.2d 615 (N.D. 1987); Johnson & Maxwell, Ltd. v. Lind, 288 N.W.2d 763 (N.D. 1980). However, the defendants' motion to dismiss cited both NDRCivP 12(b)(i) and (v), and the trial court explicitly declined to decide whether Thompson's complaint failed to state a claim under NDRCivP 12(b)(v). Instead, the court dismissed under NDRCivP 12(b)(i) for lack of jurisdiction.
Although not binding, federal court interpretations of a corresponding federal rule of civil procedure are highly persuasive in construing our rule. E.g., Larson v. Unlimited Business Exchange of North Dakota, 330 N.W.2d 518
(N.D. 1983). See NDRCivP 1, explanatory note. In deciding jurisdiction under FRCivP 12(b)(1), a trial court may consider matters outside the pleadings without converting the proceedings to summary judgment. Osborn v. United States, 918 F.2d 724 (8th Cir. 1990); Crawford v. United States, 796 F.2d 924 (7th Cir. 1986); 2A Moore's Federal Practice 12.07 [2.-1] (1995); 5A Wright and Miller, Federal Practice and Procedure 1350 (1990). Compare NDRCivP 12(b) ("[i]f . . . matters outside the pleading are presented to and not excluded by the court, [a 12(b)(v)] motion must be treated as one for summary judgment and disposed of as provided in Rule 56"). If the jurisdictional facts are not in dispute, appellate review of a jurisdictional decision is de novo. Osborn; Crawford; 2A Moore's at 12.07 [2.-1]. We review this jurisdictional challenge in that context.

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Under FRCivP 12(b)(1), federal courts have generally held that dismissal for lack of subject matter jurisdiction is appropriate if the plaintiff has failed to exhaust remedies before an administrative agency. Komninos v. Upper Saddle River Bd. of Ed., 13 F.3d 775 (3rd Cir. 1994); Bueford v. Resolution Trust Corp., 991 F.2d 481 (8th Cir. 1993); DiLaura v. Power Authority of State of New York, 982 F.2d 73 (2nd Cir. 1992). See 5A Wright and Miller, at 1350. Our decisions have also consistently required exhaustion of remedies before the appropriate administrative agency as a prerequisite to making a claim in court. Lapp v. Reeder Public School Dist. No. 3, 544 N.W.2d 164 (N.D. 1996); Medical Arts Clinic v. Franciscan Initiatives, 531 N.W.2d 289 (N.D. 1995); Tooley v. Alm, 515 N.W.2d 137 (N.D. 1994); Transportation Division v. Sandstrom, 337 N.W.2d 160 (N.D. 1983); Shark Bros., Inc. v. Cass County , 256 N.W.2d 701 (N.D. 1977). Failure to exhaust administrative remedies generally precludes making a claim in court.
We have also applied the doctrine of exhaustion of administrative remedies to employment cases. In Soentgen v. Quain & Ramstad Clinic, P.C., 467 N.W.2d 73 (N.D. 1991), a doctor failed to exhaust her internal administrative remedies at a hospital, and, instead, sued the hospital for wrongful discharge. We observed that the doctor's wrongful discharge claim could have been resolved at a hearing under the hospital's internal administrative procedures. Because the doctor had failed to exhaust her internal administrative remedies at the hospital, we affirmed the dismissal of her wrongful discharge claim against the hospital.
IV
Here, Thompson's employment agreement with NDSU was specifically governed by the NDSU University Senate Policy Implementing Procedural Regulations and by the State Board Regulations. Hom (regulations are part of teacher's employment contract). Section 605(c) of the State Board Regulations outlines specific internal procedures for
nontenured, probationary faculty to seek review of a university's nonrenewal decision.(4)

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Section 605(c)(2) directs that a nonrenewed faculty member "shall be informed of [the nonrenewal] decision in writing by the individual or chair of the body making the decision." Within seven days after receipt of the notice of nonrenewal, the faculty member may request written reasons for the decision to terminate, and the institution must supply the reasons that contributed to the nonrenewal decision within seven days of receipt of the request. The faculty member then has fifteen days to request reconsideration of the nonrenewal decision, and the institution must respond within fifteen days after receipt of the request for reconsideration.
Section 605(c)(3) says that, within sixty days after receipt of notice of a nonrenewal decision, the faculty member may request review by a Special Review Committee to determine if the nonrenewal decision was the result of "inadequate consideration." Under this subsection, "inadequate consideration" is confined to a procedural meaning, and it is not given a substantive meaning. The Special Review Committee is expressly prohibited from substituting its judgment on the merits of whether a faculty member should be reappointed or given tenure.
Section 605(c)(4) declares that, if within sixty days after receipt of notice of a nonrenewal decision, a faculty member alleges the nonrenewal decision violated academic freedoms, constitutional rights, or contractual rights, a Special Review Committee shall consider the allegation by informal methods. If the allegation is not resolved by the Special Review Committee, the matter shall be heard by a Standing Committee on Faculty Rights, and the faculty member must prove by clear and convincing evidence that the allegation was based significantly on the alleged improper consideration. If the faculty member establishes a prima facie case before the Standing Committee on Faculty Rights, those making the nonrenewal decision must produce evidence to support the nonrenewal.
In Hom, we considered whether a university had substantially complied with Section 605(c)(2) in terminating a non

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