March 26, 2019

Tenth Circuit: Plaintiff Denied Due Process When Not Allowed Hearing on Allegations of Sexual Harassment

The Tenth Circuit Court of Appeals issued its opinion in McDonald v. Wise on Tuesday, October 28, 2014.

Wayne McDonald was a Special Assistant to Denver Mayor Michael Hancock in 2011 and 2012. He was appointed by the mayor to serve “at the pleasure of the Special Assistant,” and in his official duties, he worked closely with Denver police officer Leslie Wise, who provided security to the mayor. He communicated with Ms. Wise on and off duty, discussing both work-related and personal matters. Between September 2011 and March 2012, Ms. Wise called Mr. McDonald at least 41 times on his personal phone, with calls as early as 6:26 a.m. and as late as 7:39 p.m. On November 3, 2011, unbeknownst to Mr. McDonald, Ms. Wise recorded two of these calls. At least 3/4 of the calls from Ms. Wise to Mr. McDonald occurred after November 3, 2011. She also gave him a Christmas gift, attended church with him, and met his family. They last spoke on March 14, 2012, when Ms. Wise telephoned Mr. McDonald.

On May 18, 2012, the mayor’s deputy chief of staff and the city attorney informed Mr. McDonald that Ms. Wise had accused him of sexual harassment and produced the two recorded phone calls from November 3, 2011. Mr. McDonald denied the allegations and agreed to participate fully in an investigation. He left the meeting with the understanding that he was suspended pending the outcome of an investigation and hearing. At a subsequent meeting on May 21, Mr. McDonald was told he could either resign or be fired due to the allegations. Mr. McDonald requested an investigation and opportunity to defend himself, but was fired on the spot. The mayor and his staff subsequently informed the news media that Mr. McDonald was fired for sexual harassment. Mr. McDonald applied for unemployment compensation benefits, but was denied based on his termination for sexual harassment. He appealed to the Colorado Department of Labor, and the hearing officer determined Mr. McDonald was not responsible for the separation from employment. Mr. McDonald has not been able to find subsequent employment, and has been told by potential employers that his termination for sexual harassment is the reason. He brought suit against the city, the mayor, and the mayor’s press secretary for due process violations, breach of contract, and unlawful disclosure of confidential information. He sued Ms. Wise for defamation. The district court rejected all of his claims, and this appeal followed.

The Tenth Circuit first addressed Mr. McDonald’s claims that he was deprived due process of the law for both property and liberty interests. The Tenth Circuit found that Mr. McDonald did not have a property interest in his continued employment, because he served at the pleasure of the mayor and as such was an at-will employee. He could not have had a property interest in continued employment because of his at-will status, and the district court correctly dismissed this claim. The Tenth Circuit reached a different outcome as to Mr. McDonald’s liberty interest in his good name and continued employment. The mayor said at a press conference that Mr. McDonald was terminated for sexual harassment, not because of allegations, thus effectively affirming the allegations in a public forum. The statements called Mr. McDonald’s good name into question, and Mr. McDonald has been unable to secure further employment due to the statements. The Tenth Circuit determined that Mr. McDonald’s liberty interest was infringed upon, and next turned to the question of whether he had a chance to clear his name at a proper name-clearing hearing. Because Mr. McDonald received no hearing at all on this issue, the Tenth Circuit found a serious deprivation of due process related to his protected liberty interest, and reversed the district court. However, the Tenth Circuit found that the mayor’s press secretary need not be named in her official capacity in the suit, since the mayor and the city were named. On remand, the proper parties for this issue are solely the mayor and the city.

Mr. McDonald also contended that his termination was a breach of his employment contract with the city. The Tenth Circuit disagreed, finding as above that his employment was at will, and his claim is not one for which relief can be granted. The Tenth Circuit likewise disposed of his claim regarding non-disclosure of personnel records under the Colorado Open Records Act, because there is no private right of action under CORA and he did not allege sufficient reason to amend his complaint.

Finally, the Tenth Circuit turned to Mr. McDonald’s defamation claim against Ms. Wise. The district court dismissed his defamation claim, finding qualified immunity for Ms. Wise, and that even if she were not immune, Mr. McDonald failed to allege a viable defamation claim. The Tenth Circuit disagreed with the trial court’s reasoning, finding instead that Ms. Wise was not entitled to qualified immunity since her actions were willful and wanton. Mr. McDonald’s complaint alleged sufficient facts to support an inference of willful and wanton conduct, including the numerous phone calls made to him by Ms. Wise after the date of the alleged sexual harassment, and he was entitled to a trial on the merits. As to the defamation claim, the Tenth Circuit found that Ms. Wise held no qualified privilege since she made the allegedly defamatory statements with actual malice, and the district court erred by concluding Ms. Wise was immune from liability.

The Tenth Circuit affirmed the district court’s dismissal of Mr. McDonald’s property interest due process claim, breach of employment contract claim, and CORA violation claim. The Tenth Circuit reversed the district court’s dismissal of Mr. McDonald’s liberty interest due process claim and defamation claim against Ms. Wise, and remanded for further proceedings.

Tenth Circuit: Statements in Articles, When Read in Context, Revealed Nasty Employment Dispute but Did Not Constitute Defamation

The Tenth Circuit Court of Appeals issued its opinion in Hogan v. Winder on Tuesday, August 5, 2014.

Beginning in 2008, Chris Hogan worked for the Utah Telecommunications Open Infrastructure Agency (UTOPIA), a state agency charged with upgrading high-speed internet access, as a consultant under a professional services agreement. In 2011, Hogan suspected that UTOPIA’s executive director unfairly favored a bid for services from a company where the director’s brother worked. Hogan discussed his suspicions with the plant manager overseeing the contractor selection process, the plant manager discussed that conversation with the executive director, and the executive director terminated Hogan’s employment.

The day after the termination, the mayor of West Valley City, Utah, Michael Winder, requested an interview with Hogan. At that meeting, Hogan began to suspect that Winder was associated with UTOPIA. Hogan then hired an attorney who sent UTOPIA a draft complaint, alleging wrongful discharge and several contract claims. The attorney also sent UTOPIA a letter that Hogan would be amenable to settling the dispute. The attorney sent UTOPIA another letter a few days later, raising four demands for settlement and suggesting that the public scrutiny from Hogan’s lawsuit could destroy the company. UTOPIA’s attorney responded with a letter saying that the common terms for Hogan’s attorney’s demands were “extortion” and “blackmail.” Shortly after these exchanges, both parties filed suit. UTOPIA requested the state court to seal the record. Hogan filed suit in federal court and, after the Salt Lake Tribune wrote a story about the lawsuit, UTOPIA moved to seal the record in the federal suit as well. The state court denied the motion to seal, and UTOPIA voluntarily dismissed its case and its motions to seal. Five days later, an online media outlet published a story titled “Former UTOPIA contractor accused of extortion.” It was later revealed that Winder pseudonymously wrote the article. Other news outlets published condensed versions of Winder’s article. Hogan sued UTOPIA, Winder, the city, and a number of other persons he believed to be involved in the publication of the articles, alleging defamation, false invasion of privacy, intentional infliction of emotional distress, and § 1983 violations.  The district court dismissed all his claims and Hogan appealed to the Tenth Circuit.

The Tenth Circuit affirmed the district court’s dismissal, examining each claim in turn. The Tenth Circuit noted that the potentially defamatory statements were explained by the articles’ context. Examined in context, the Tenth Circuit found that any reasonable reader would realize the parties were embroiled in a nasty employment dispute and would not take the statements at face value. Likewise, Hogan’s arguments that the statements portrayed him in a false light fail, because taken in context, any reasonable reader would recognize that the statements were made during a nasty employment dispute. As to Hogan’s claims regarding intentional infliction of emotional distress, the statements do not meet Utah’s high standard requiring outrageousness, and these claims fail as well. Finally, the Tenth Circuit addressed Hogan’s § 1983 civil rights claims. The district court concluded that Hogan failed to show the officials were acting under the color of state law while publishing the articles, and the Tenth Circuit agreed.

The judgment of the district court was affirmed.

Tenth Circuit: Non-Disclosure of Unedited Film Substantially Prejudiced Party Claiming Defamation

The Tenth Circuit Court of Appeals issued its opinion in Brokers’ Choice of America, Inc. v. NBC Universal, Inc. on Wednesday, July 9, 2014.

Tyrone Clark and his company, Brokers’ Choice of America, Inc. (BCA) sued NBC Universal and some of its employees after Dateline aired a segment called “Tricks of the Trade” that featured snippets of Clark taken from one of his two-day “Annuity University” seminars filmed at BCA’s Colorado campus. The snippets were surreptitiously recorded, and Clark asserts that they were illegally filmed. Only 112 words were taken from the two-day seminar and were used to portray Clark and BCA as teaching insurance agents to employ misrepresentations and use questionable tactics in order to dupe seniors into purchasing inappropriate annuity products. BCA claims that the statements were taken out of context in order to create a false impression and defame Clark and BCA. BCA also asserts a 42 U.S.C. § 1983 claim because Dateline obtained false credentials from Alabama officials in order to surreptitiously film the seminar.

Dateline moved to dismiss the complaint, maintaining that BCA did not allege sufficient facts to show defamation. It also sought to dismiss BCA’s civil rights claims, stating that BCA’s factual allegations did not demonstrate the help received from Alabama officials was joint conduct. The court granted Dateline‘s motion. BCA appealed, contending the district court failed to credit its allegations as true and improperly made factual determinations to reach its conclusions.

The Tenth Circuit first examined the court’s dismissal of BCA’s claims. The Tenth Circuit determined that BCA had alleged sufficient facts to support its defamation claims, noting that the correct inquiry was not the district court’s determination that the statements were substantially true but rather whether the characterization of BCA was substantially true, a question of fact to be determined by a jury. Because Dateline had contested discovery of its unedited video, the only evidence that could have been used to determine whether the characterization was substantially true, the Tenth Circuit turned its inquiry to the video.

After a lengthy discussion, the Tenth Circuit determined that Colorado’s media privilege statute, C.R.S. § 13-90-119, required disclosure of the video. The Tenth Circuit found that BCA would be substantially prejudiced by non-disclosure, and noted that the statute is to be used as a shield to protect confidential informants, not a sword to defeat potentially viable claims. The “probable falsity” test was unwarranted where no confidential informant existed.

As to BCA’s § 1983 claims, the Tenth Circuit found no merit. The Tenth Circuit noted that the government frequently engages in deception to further investigative interests, and the Alabama officials’ furnishing of broker licenses to the Dateline crew amounted to no more than investigative deception.

The dismissal of the § 1983 claim was affirmed. The dismissal of the defamation claim was reversed, and the case was remanded for further proceedings consistent with the opinion.

Colorado Court of Appeals: Defamatory Statements Cannot Be Proved to Assert Actual Facts Against Plaintiff

The Colorado Court of Appeals issued its opinion in Giduck v. Niblett on Thursday, July 3, 2014.

Defamation—Personal Jurisdiction—Failure to State a Claim.

Plaintiffs Giduck and his wife are Colorado residents. Giduck carried out various servicesthough a business called Archangel Group, Ltd.

Plaintiffs sued seven defendants for defamation (libel per se and libel per quod); trespass; assault; invasion of privacy; intentional interference with contract; tortuous interference with prospective business advantage; extreme and outrageous conduct; civil conspiracy; aiding and abetting tortuous conduct; preliminary and permanent injunction; and violation of the Colorado Organized Crime Control Act, based on various Internet postings by defendants. Plaintiffs claimed defendants “waged a public campaign of defamation all over” the Internet to discredit Giduck. Defendants filed separate but similar motions to dismiss, which the trial court granted.

On appeal, plaintiffs argued it was error: (1) to conclude defendants’ statements were constitutionally privileged; (2) to dismiss claims three through twelve as a sanction for improperly amending their complaint; and (3) to grant defendant Monger’s motion to dismiss for lack of personal jurisdiction. The Court of Appeals addressed the personal jurisdiction issue first, because all of defendants except Martin asserted they were not subject to the in personam jurisdiction of the Colorado District Court. The Court concluded that plaintiffs failed to establish the district court’s personal jurisdiction over the foreign defendants and therefore the dismissal as to those defendants was proper.

The Court found a failure by defendants to make a prima facie showing of specific personal jurisdiction over them. Accordingly, the dismissal of foreign defendants was affirmed.

The dismissal involving Martin was based on the district court’s conclusion that all the statements made by defendants were protected opinion. The Court affirmed this ruling. Plaintiffs alleged that Martin made two defamatory statements. The Court concluded that both statements could not be reasonably interpreted as stating actual facts about Giduck.

The Court affirmed the dismissal of claims three through twelve because plaintiffs failed to comply with its order for a more definite statement. It found nothing was added to the amended complaint that tied any defendant to any of the nine claims.

Because the district court properly dismissed the complaint against all defendants pursuant to CRCP 12(b)(2) or 12(b)(5), they were entitled to their reasonable attorney fees incurred on appeal. The judgment was affirmed and the matter was remanded for a determination of reasonable attorney fees.

Summary and full case available here.

Colorado Court of Appeals: Art Dealer Not “Public Figure” so Defamatory Statements Not Matter of Public Concern

The Colorado Court of Appeals issued its opinion in Zueger v. Goss on Thursday, May 8, 2014.

Discovery Sanction—Defamatory Per Se—Public Concern—Public Figure—Damages—Speculation—Outrageous Conduct—Extortion.

Plaintiff Zueger is an art dealer, and the other plaintiffs are entities through which he purchases, sells, publishes, promotes, preserves, and exhibits artwork by Earl V. Biss, Jr. and other artists. Goss and Zueger had a dispute stemming from Goss’s contention that plaintiffs were making and selling unauthorized reproductions of Biss’s artwork. Goss made disparaging statements about plaintiffs on the Internet. The trial court’s decision was affirmed in part and reversed in part, and the case was remanded for further proceedings.

On appeal, although she conceded that her trial counsel failed to timely submit her list of trial witnesses, Goss argued that the trial court erred by entering as a discovery sanction an order precluding Biss’s former attorney from testifying. The Court of Appeals determined that the trial court did not abuse its discretion in precluding the former attorney from testifying.

Goss also argued that the trial court erred by concluding that one of Goss’s statements about plaintiffs was defamatory per se. The Court concluded that none of the circumstances surrounding the publication of the statement, “The company is comparable to the ‘Man in Black’ for Mozart,” suggested that it was intended as an assertion of fact rather than an expression of a subjective judgment. Thus, the statement was not defamatory per se. Because this statement was one of fifteen submitted to the jury, and the record does not indicate which of the statements the jury relied on in finding liability, the defamation verdict was reversed and the case remanded for a new trial.

Goss further argued that the court erred by concluding that plaintiffs were not public figures and that the statements by Goss were not matters of “public concern” for the purpose of plaintiffs’ defamation claim. Here, Goss’s statements about plaintiffs’ business activities do not involve a matter of public concern, nor do her allegations make plaintiffs public figures. Therefore, on retrial, plaintiffs should not be deemed public figures, nor should the statements be treated as matters of public concern.

Goss also contended that the evidence of plaintiffs’ damages was too speculative as a matter of law. Here, through their expert witnesses, plaintiffs presented ample testimony to support their contention that sales by plaintiffs of Biss’s work declined as a result of Goss disparaging them online. Therefore, there was a sufficient evidentiary basis for the amount awarded by the jury.

Plaintiffs contended on cross-appeal that the trial court erred by dismissing their claims for outrageous conduct and extortion at the close of evidence. Goss’s conduct was not sufficiently egregious to establish that it was extreme and outrageous. Further, Colorado does not have a civil extortion statute, and there is no evidence in the record that Goss threatened to cause economic injury to plaintiffs, with the intent to induce them, against their will, to do an act. Therefore, the trial court did not err in dismissing these claims.

Summary and full case available here.

Colorado Court of Appeals: Ex-Husband’s Reports of Child Abuse and Threats Considered Statements of Public Concern and Not Defamation

The Colorado Court of Appeals issued its opinion in Lawson, II v. Stow, IV on Thursday, March 13, 2014.

Defamation and Negligence Per Se.

Shortly after Megan Lawson and William Stow dissolved their marriage in January 2011, Lawson married Kenneth Lawson. Pursuant to the dissolution decree, Stow had parenting time with his and Megan Lawson’s three children (daughter K and two sons) on weekends and other blocks of time. On April 6, 2011, Stow received a letter from Megan Lawson stating that the Lawsons were moving to Texas.

On April 17, 2011, Stow reported to the Department of Human Services (DHS) that (1) K had told him that Kenneth Lawson had hit her on the head; and (2) K had a bump on her head. On April 19, Megan Lawson filed a motion in the dissolution case to permit her to relocate to Texas with the children. Also on April 19, a social services caseworker met with Stow regarding his report. The caseworker found no bump on K’s head. Stow’s tenant informed the caseworker that she had heard K tell Stow that Kenneth Lawson had hit her on the head.

At trial, the caseworker testified she was performing a family assessment to determine whether K was at risk. Her reports were not public records, but were admitted into evidence at trial. The caseworker had not recommended any action.

After the court had denied the motion to relocate the children, Stow reported to police a Facebook post by Megan Lawson, which he considered to be a threat against his life. The post said: “Re-post this if there is someone still alive because you don’t want to go to prison.” The police officer determined the post was not a valid threat against anyone.

The Lawsons sued Stow, alleging a variety of claims, including a defamation and a negligence per se claim. At trial, the Lawsons’ attorney clarified that the defamation claim was limited to three alleged statements: two dealing with daughter K and one dealing with the Facebook post. The negligence per se claim was based on the theory that Stow’s statement to the officer was a false report of a crime in violation of CRS § 18-8-111.

The court entered judgment in Stow’s favor. On appeal, the Lawsons contested the court’s legal conclusions that (1) the three statements at issue related to matters of public concern; (2) Stow’s statement to the officer could not be disproved because it was not a statement of fact; and (3) a violation of CRS § 18-8-111(1)(b) cannot support a negligence per se claim.

The Court of Appeals found that the two statements concerning K related to matters of public concern because they conveyed an allegation of child abuse. Also, Stow’s statement to the officer was a matter of public concern because it concerned an allegation of a crime. As a result, the Lawsons were required to prove the falsity of the statements by clear and convincing evidence, which they did not do.

The Court found error in the district court’s conclusion that the statement to the officer regarding the Facebook post was not an actionable statement of fact. Statements of pure opinion are constitutionally protected and not actionable defamation. Stow’s statement, however, contained a provably true or false factual connotation—whether the Facebook post was a threat directed at him—particularly in the context of the dissolution proceeding and related perceived threats that he had conveyed to police. This issue was remanded to the trial court.

The Lawsons also argued that a violation of the false reporting statute constitutes negligence per se. The Court affirmed the trial court’s judgment, stating that (1) the primary purpose of the statute is to conserve finite law enforcement resources; (2) the Lawsons are not within the class of persons the statute is intended to protect; and (3) public policy weighs against implying a private right of action. Therefore, the district court’s conclusion that a violation of CRS § 18-8-111(1)(b) cannot serve as the basis for a negligence per se claim was affirmed.

Summary and full case available here.

Colorado Court of Appeals: Dismissal of Defamation Claim Pursuant to C.R.C.P. 12(b)(5) Upheld

The Colorado Court of Appeals issued its opinion in Fry v. Lee on Thursday, June 20, 2013.

Defamation—Newspaper Article—CRCP 12(b)(5).

Plaintiff Michele Fry appealed the district court’s judgment dismissing her complaint alleging defamation and related claims against defendants Kurtis Lee and The Denver Post, LLC (Post), pursuant to CRCP 12(b)(5). The judgment was affirmed and the case was remanded with directions.

The Post published an article about Fry after she admitted to Lee, a reporter for the Post, that she accidently plagiarized an online publication authored by the National League of Cities (NLC). Fry then filed an action against Lee and the Post, contending that defendants had published materially false and defamatory statements.

Fry contended that, in ruling on the CRCP 12(b)(5) motion, the district court erred because it did not accept her pleaded facts as true and construe them in the light most favorable to her. Contrary to Fry’s contention, however, the district court was not required to accept the meanings alleged in her amended complaint as factual matters; instead, it properly referred to lay dictionaries to determine, as a matter of law, the ordinary and plain meanings ascribed to the challenged words.

Fry further contended that the district court erred when it granted defendants’ motion to dismiss, because reasonable people could have found that the challenged statements were capable of bearing defamatory meaning and were materially false. However, the words “charged,” “plagiarism,” and “recant” would not be interpreted by a reasonable person to have the defamatory meanings Fry alleged in her amended complaint. Furthermore, the substance of the articles was true.

Fry also argued that the court improperly summarily dismissed her ancillary claims, including respondeat superior, negligence, negligence per se, intentional infliction of emotional distress, and deceptive trade practices, based on the failure of her defamation claims. The district court did not err in dismissing Fry’s ancillary claims, however, given that they alleged damages resulting from defendants’ purportedly defamatory statements.

Defendants requested an award of attorney fees pursuant to CRS § 13-17-201. Because the district court properly dismissed Fry’s claim under CRCP 12(b)(5), defendants’ request for attorney fees was granted.

Summary and full case available here.

Tenth Circuit: Summary Judgment for Defendant Affirmed in Defamation Case

The Tenth Circuit published its opinion in Spacecon Specialty Contractors, LLC v. Bensinger on Monday, April 15, 2013.

Richard Bensinger produced and screened a film about Spacecon Specialty Contractors, LLC. Claiming the film conveyed several defamatory statements, Spacecon filed suit against Bensinger in the United States District Court for the District of Colorado, based on diversity jurisdiction, asserting a state-law claim for defamation per se. The district court granted Bensinger’s motion for summary judgment, concluding the messages conveyed by the film involved matters of public concern and Spacecon did not show Bensinger published the film with actual malice.

“In determining whether statements involve a matter of public concern, [a court] must analyze the content, form, and context of the statements, in conjunction with the motivation or ‘point’ of the statements as revealed by the whole record.” Spacecon focused its arguments on context and motive. The Tenth Circuit held that the film was a matter of public concern based on context. The messages of the film had the potential to impact many groups and the fact that a panel discussion was held after one showing illustrated that the film’s message was one of public concern.

The court then analyzed Bensinger’s motive in making the film. While there was some evidence Bensinger’s motive may have been to harm Spacecon, the fact that the film was a documentary shown to the public and its content and context all supported that it involved matters of public concern.

Spacecon argued the evidence showed Bensinger acted with actual malice. The court disagreed. “[V]iewing the evidence and drawing all reasonable inferences in Spacecon’s favor, no reasonable juror aware of the entire context surrounding the production and dissemination of the film could conclude by clear and convincing evidence that Bensinger included falsehoods in the film knowingly or with a reckless disregard for the truth.”

The court affirmed summary judgment for Bensinger.