Desai et al v. Charter Communications, LLC
Filing
129
MEMORANDUM OPINION AND ORDER by Judge David J. Hale on 1/4/2018, re 89 Motion for Summary Judgment. Because a genuine dispute of material fact remains as to Plaintiffs' defamation claim, summary judgment is not warranted. Charter 9;s objection to the magistrate judge's June 13, 2017 Order (D.N. 105 ) is OVERRULED. The Clerk of Court is DIRECTED to unseal the investigative report prepared by Rodger Simms (D.N. 93 ). Charter's motion for summary judgment (D.N. 89 ) is DENIED. cc: Counsel (CDR)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
LOUISVILLE DIVISION
KRUTI DESAI, et al.,
Plaintiffs,
v.
Civil Action No. 3:14-cv-459-DJH-DW
CHARTER COMMUNICATIONS, LLC,
Defendant.
* * * * *
MEMORANDUM OPINION AND ORDER
Plaintiffs Kruti Desai, Melanie B. Fink, Belinda Gale Parkerson, Jeremy Parkerson,
Daniel Popp, James Ross, and Carolyn Vincent are former employees of Defendant Charter
Communications, LLC who were fired for accepting free computer printers offered to them by
Charter’s office-supply administrator. This action arises from a Charter employee’s use of the
term “Printer-gate” during a PowerPoint presentation to other employees after Plaintiffs’
termination. Plaintiffs assert that Charter defamed them by implying that they engaged in illegal
activity.
Charter has moved for summary judgment on Plaintiffs’ remaining claim. (Docket No.
89) In connection with the briefing on the summary-judgment motion, Magistrate Judge Dave
Whalin granted Plaintiffs’ motion to unseal an investigative report that Charter claims is
privileged and denied Charter’s motion to strike certain affidavits submitted in support of
Plaintiffs’ summary-judgment response.1 (D.N. 104) Charter objected to that ruling. (D.N. 105)
For the reasons explained below, the Court will overrule Charter’s objection and deny Charter’s
motion for summary judgment.
1
Judge Whalin also granted motions to temporarily seal the investigative report and deposition
testimony concerning it pending final resolution of the privilege issue by this Court. (See D.N.
104, PageID # 2431)
1
I.
BACKGROUND
The facts underlying this case are largely undisputed. Plaintiffs worked at Charter’s call
center in Louisville, Kentucky, in various capacities. Each was given a Hewlett-Packard (HP)
computer printer by Linda Showalter, an administrative assistant at Charter. Plaintiffs maintain
that they believed Showalter’s distribution of printers was authorized by management. Charter,
however, considered Plaintiffs’ acceptance of the printers to be a violation of its policy against
removing company property without authorization, and it terminated most of the employees
involved.
Approximately one month after Plaintiffs were fired, Charter Human Resources Manager
Rodger Simms gave a PowerPoint presentation during a Charter leadership conference. On a
slide with the heading “Leadership and Judgment,” Simms referred to “‘Operation . . . ’ Greenlight, Buzz-kill, Printer-gate.” (D.N. 90-3, PageID # 1984 (ellipsis in original)) He encouraged
employees to “[a]ct with Integrity and Character.” (Id.) The notes for Simms’s oral presentation
accompanying the slide state: “Let’s get the elephant in the room out in the open, how many of
you have heard of . . . Operation codes for things that weren’t right! All examples of poor
judgment. Not bad people, people we know and love but they made the wrong choices.” (Id.
(ellipsis in original)) Simms emphasized the importance of “integrity,” “character,” and having
“the courage to do the right thing.” (Id.) He also warned that “[k]nowing something isn’t right
and allowing it to continue is the same as you doing it!” (Id., PageID # 1985) “Green-light”
referred to an incident in which a Charter employee used a company credit card for personal
benefit and was terminated as a result. (D.N. 89-3, PageID # 1539-40) “Buzz-kill” involved the
sale of illegal drugs on Charter property by Charter employees; those employees were also
terminated. (Id., PageID # 1540; D.N. 90-5, PageID # 1991-92)
2
Plaintiffs sued Charter for defamation on the ground that “Charter made false statements
alleging misconduct on the part of the Plaintiffs relating to the . . . distribution of HewlettPackard ink jet printers, including but not limited to the [PowerPoint] presentation.”2 (D.N. 7,
PageID # 51) They contend that the use of the term “Printer-gate,” particularly in conjunction
with references to employee theft and drug-dealing, implied that their actions were criminal.
(See D.N. 90, PageID # 1961-63) Charter seeks summary judgment on the grounds that “Printergate” is not defamatory and that any implication of wrongdoing by Plaintiffs was true.3 (D.N.
89; D.N. 89-1)
II.
ANALYSIS
Although the motion for summary judgment was filed first, the Court will begin with
Charter’s objection, which potentially eliminates certain evidence from consideration for
summary-judgment purposes. Plaintiffs responded to Charter’s objection (D.N. 106), again
ignoring Local Rule 72.2, which provides that “[u]nless directed by the Court, no party may file
any response to a written objection” to a nondispositive ruling. (See D.N. 81, PageID # 1426 &
n.4 (noting Plaintiffs’ failure to observe LR 72.2 in connection with Charter’s earlier objection))
As the response violates LR 72.2 and the parties were previously admonished that such filings
are improper, the Court will disregard both Plaintiffs’ response and Charter’s similarly
unauthorized reply (D.N. 108) when considering Charter’s objection.
A.
Objection
A magistrate judge’s ruling on a nondispositive matter may be reconsidered if it is shown
to be “clearly erroneous or contrary to law.” 28 U.S.C. § 636(b)(1)(A); see also Fed. R. Civ. P.
2
Plaintiffs also asserted claims of wrongful termination and intentional infliction of emotional
distress, which were dismissed under Rule 12(b)(6) (see D.N. 15), and conversion, which was
dismissed by stipulation. (See D.N. 45)
3
The Court rejected Charter’s untimely attempt to assert qualified privilege. (D.N. 81)
3
72(a) (“The district judge in the case must consider timely objections [to nondispositive rulings
by the magistrate judge] and modify or set aside any part of the order that is clearly erroneous or
is contrary to law.”). Charter contends that Judge Whalin clearly erred in denying its motion to
strike the Parkerson, Little, and Eversole affidavits and in granting Plaintiffs’ motion to unseal
the investigative report. (D.N. 105)
1.
Investigative Report
Charter first objects to Judge Whalin’s conclusion that an investigative report prepared by
Rodger Simms prior to Plaintiffs’ termination is not protected by the attorney-client privilege
and thus should not be sealed in the record. (D.N. 105, PageID # 2434-36; see D.N. 104, PageID
# 2405-15) Charter disclosed the report to Plaintiffs on the condition that it would be for
attorneys’ eyes only. (See D.N. 93, PageID # 2180) Nevertheless, Plaintiffs filed the report in
the record, arguing that no privilege applied and that the Court should therefore order the report
unsealed and consider it for purposes of summary judgment. (D.N. 91) Judge Whalin agreed
that the report was not privileged and granted Plaintiffs’ motion to unseal it. (D.N. 104, PageID
# 2414-15)
There is “a strong presumption in favor of openness regarding court records, and thus
“[s]hielding material in court records . . . should be done only if there is a ‘compelling reason
why certain documents or portions thereof should be sealed.’” Rudd Equip. Co. v. John Deere
Constr. & Forestry Co., 834 F.3d 589, 593 (2016) (quoting Shane Grp., Inc. v. Blue Cross Blue
Shield, 825 F.3d 299, 305 (6th Cir. 2016)). “‘[I]n civil litigation, only trade secrets, information
covered by a recognized privilege (such as the attorney-client privilege), and information
required by statute to be maintained in confidence . . .’ is typically enough to overcome the
presumption of [public] access [to court records].” Shane Grp., 825 F.3d at 308 (quoting Baxter
4
Int’l, Inc. v. Abbott Labs., 297 F.3d 544, 547 (7th Cir. 2002)). The burden is on Charter to show
that the privilege applies and that sealing thus is appropriate. See id. at 305 (citing In re Cendant
Corp., 260 F.3d 183, 194 (3d Cir. 2001)).
Because Plaintiffs’ remaining claim arises under Kentucky law, Kentucky privilege rules
apply. See Fed. R. Evid. 501 (“[I]n a civil case, state law governs privilege regarding a claim or
defense for which state law supplies the rule of decision.”). The Kentucky Supreme Court has
“recognized ‘three salient princip[le]s’ regarding attorney-client privilege: broad discovery exists
for non-privileged matters[;] ‘the party asserting a privilege must prove its applicability[’;] and
the courts should strictly construe privileges because they constrain the public’s right to
evidence.” Cardinal Aluminum Co. v. Cont’l Cas. Co., No. 3:14-CV-857-TBR-LLK, 2015 U.S.
Dist. LEXIS 95361, at *6 (W.D. Ky. July 22, 2015) (footnote omitted) (quoting Haney v. Yates,
40 S.W.3d 352, 355 (Ky. 2000)). The privilege is set out in Kentucky Rule of Evidence 503,
which provides that “a confidential communication made for the purpose of facilitating the
rendition of professional legal services to the client . . . [b]etween the client or a representative of
the client and the client’s lawyer or a representative of the lawyer” is privileged. Ky. R. Evid.
503(b). Here, the parties dispute whether the investigative report was created to facilitate the
rendition of legal advice. (See D.N. 91-1; D.N. 96, PageID # 2353-54; D.N. 105, PageID #
2434-36)
Even if the report was privileged at the time of its creation, however, it lost that
protection when Charter voluntarily disclosed it to Plaintiffs. Kentucky Rule of Evidence 509
provides: “A person upon whom these rules confer a privilege against disclosure waives the
privilege if he or his predecessor while holder of the privilege voluntarily discloses or consents
to disclosure of any significant part of the privilege[d] matter.” Ky. R. Evid. 509; see Lexington
5
Pub. Library v. Clark, 90 S.W.3d 53, 61 (Ky. 2002) (“Communications that occur in confidence
lose their confidentiality (and the protection of the privilege) if the client voluntarily discloses
them to third persons.” (quoting Robert G. Lawson, The Kentucky Evidence Law Handbook
§ 5.10, at 236 (3d ed. Michie 1993))). Thus, by willingly giving a copy of the report to
Plaintiffs’ counsel (see D.N. 93), Charter waived any attorney-client privilege that might
otherwise have applied, and the report may not be sealed on the basis of privilege.
Charter also contends that Judge Whalin clearly erred by failing to consider Plaintiffs’
violation of the parties’ agreement that the report would be for attorneys’ eyes only. (D.N. 105,
PageID # 2436; see D.N. 93, PageID # 2180) While Plaintiffs’ counsel’s failure to abide by that
agreement is less than admirable, neither the law of the Sixth Circuit nor the rules of this Court
permit sealing of court records based on an agreement between parties.
See LR 5.7(c)
(“Reference to a stipulation that allows a party to designate certain documents as confidential is
not sufficient grounds to establish that a document, or portions thereof[,] warrants filing under
seal.”); Shane Grp., 825 F.3d at 307 (“A court’s obligation to keep its records open for public
inspection is not conditioned on an objection from anybody.”). The only potentially valid basis
identified by Charter for sealing the investigative report is the attorney-client privilege—which,
as explained above, is inapplicable here. In the absence of any other “compelling reason,” Rudd
Equipment Co., 834 F.3d at 593 (citation omitted), the Court finds no clear error in Judge
Whalin’s decision to unseal the report.
2.
Little, Parkerson, and Eversole Affidavits
Charter also challenges Judge Whalin’s decision not to strike the affidavits of Jeremy
Parkerson, Samantha Little, and James Eversole.
(D.N. 105, PageID # 2436-37)
Charter
complains that Little and Parkerson’s affidavits “[i]ncluded impermissible hearsay.”
6
(Id.,
PageID # 2436) However, Judge Whalin found that these affidavits were admissible for a
number of purposes other than to prove the truth of the matters asserted. (See D.N. 104, PageID
# 2419-25) The fact that a statement could also be offered for its truth does not render it
inadmissible. See, e.g., Great W. Cas. Co. v. Flandrich, No. C2-07-CV-1002, 2010 U.S. Dist.
LEXIS 47173, at *6 (S.D. Ohio Apr. 2, 2010) (denying motion to exclude statements for which
there were “two possible purposes,” one hearsay and one not; statements were “admissible for
the limited purpose of showing the effect they had on [the defendant]”). Moreover, the fact that
Judge Whalin declined to follow Ungerbuehler v. Federal Deposit Insurance Corp., No. 5:08CV-20-REW, 2010 U.S. Dist. LEXIS 98563 (E.D. Ky. Sept. 20, 2010), does not warrant reversal
(see D.N. 105, PageID # 2437), as Ungerbuehler is not binding on this Court in any event. See
Am. Elec. Power Co. v. Connecticut, 564 U.S. 410, 131 S. Ct. 2527, 2540, 180 L. Ed. 2d 435
(2011) (“[F]ederal district judges, sitting as sole adjudicators, lack authority to render
precedential decisions binding other judges, even members of the same court.”).
The Court likewise finds no clear error in Judge Whalin’s treatment of the Eversole
affidavit. Although Charter contends that Eversole’s statements are inadmissible because they
were obtained in violation of Kentucky Supreme Court Rule 4.2, it cites no binding precedent
that would require exclusion of the affidavit on this ground. (See D.N. 105, PageID # 2437-38)
Judge Whalin examined the affidavit and the parties’ arguments at length and determined that
there was insufficient proof of Eversole’s managerial status at Charter; no evidence of “trickery,
hoax[,] or fabrication” by Plaintiffs in acquiring the affidavit; and little chance of prejudice to
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Charter if the affidavit were considered.4 (D.N. 104, PageID # 2429; see id., PageID # 2428-30)
Charter has not established that this conclusion was clearly erroneous.
B.
Summary Judgment
Summary judgment is required when the moving party shows, using evidence in the
record, “that there is no genuine dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed. R. Civ. P. 56(a); see 56(c)(1). For purposes of summary
judgment, the Court must view the evidence in the light most favorable to the nonmoving party.
Loyd v. Saint Joseph Mercy Oakland, 766 F.3d 580, 588 (6th Cir. 2014) (citing Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 255 (1986)). However, the Court “need consider only the
cited materials.” Fed. R. Civ. P. 56(c)(3); see Shreve v. Franklin Cty., Ohio, 743 F.3d 126, 136
(6th Cir. 2014). If the nonmoving party “fails to properly support an assertion of fact or fails to
properly address another party’s assertion of fact as required by Rule 56(c),” the fact may be
treated as undisputed. Fed. R. Civ. P. 56(e)(2)-(3). To survive a motion for summary judgment,
the nonmoving party must establish a genuine issue of material fact with respect to each element
of each of his claims. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986) (noting that “a
complete failure of proof concerning an essential element of the nonmoving party’s case
necessarily renders all other facts immaterial”).
Under Kentucky law, a defamation claim consists of four elements: “(a) a false and
defamatory statement concerning another; (b) an unprivileged publication to a third party;
(c) fault amounting at least to negligence on the part of the publisher; and (d) either actionability
of the statement irrespective of special harm or the existence of special harm caused by the
4
In its objection, Charter does not contend that it would be prejudiced by admission of
Eversole’s affidavit; rather, it merely asserts that “[s]ince Plaintiffs never sought or obtained
permission to speak with Eversole, the denial of Charter’s motion to strike his wrongfully
obtained affidavit was clearly erroneous and should be overruled.” (D.N. 105, PageID # 2438)
8
publication.” Toler v. Süd-Chemie, Inc., 458 S.W.3d 276, 282 (Ky. 2014) (quoting Restatement
(Second) of Torts § 558 (1977)). The primary issue in this case is whether Simms’s presentation
contained defamatory language about Plaintiffs. “‘Defamatory language’ is broadly construed as
language that ‘tends so to harm the reputation of another as to lower him in the estimation of the
community or to deter third persons from associating or dealing with him.’” Stringer v. WalMart Stores, Inc., 151 S.W.3d 781, 793 (Ky. 2004) (quoting Restatement (Second) of Torts
§ 559), overruled in part on other grounds by Toler, 458 S.W.3d 276. A plaintiff “need not be
specifically identified in the defamatory matter itself so long as it was so reasonably understood
by [the] plaintiff[’]s ‘friends and acquaintances . . . familiar with the incident.’” Id. at 794
(omission in original) (quoting E.W. Scripps Co. v. Cholmondelay, 569 S.W.2d 700, 702 (1978)).
Certain statements are “actionable per se,” meaning that they give rise to “a conclusive
presumption of both malice and damage.” Toler, 458 S.W.3d at 282 (quoting Stringer, 151
S.W.3d at 794). These include “false accusation[s] of theft.” Stringer, 151 S.W.3d at 795
(quoting 50 Am. Jur. 2d Libel and Slander § 185 at 465 (1995)). If the Court finds that “the
statement complained of is capable of bearing a defamatory meaning,” then “it is for the jury to
determine . . . whether a defamatory meaning was attributed to it by those who received the
communication. The terms should be construed in their most natural meaning and should be
measured by the natural and probable effect on the mind of the average reader [or listener].”
Yancey v. Hamilton, 786 S.W.2d 854, 858-59 (Ky. 1989). And “where the words at issue are
capable of more than one meaning, . . . the jury should decide which of the meanings a recipient
of the message would attribute to it.” Id. (citations omitted).
Here, the Little and Eversole affidavits show that at least some Charter employees who
attended Simms’s presentation interpreted “Printer-gate” as referring to illegal activity by
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Plaintiffs. (D.N. 90-18, PageID # 2145 (“I viewed the term [Printer-gate] as referencing those
who were terminated. I also understood the term to be derogatory and indicating they had
engaged in illegal behavior.”); D.N. 90-19, PageID # 2146 (“I understood the use of the term
‘gate’ as meaning that management viewed the individuals [who took printers] in a derogatory
fashion and that they considered the printers to be stolen.”))
Moreover, Printer-gate was
mentioned in the same breath as Buzz-kill and Green-light, both of which involved criminal
activity. (D.N. 90-3, PageID # 1984; see D.N. 89-3, PageID # 1539-40; D.N. 90-5, PageID
# 1991-92) The employees involved in all three incidents were labeled by Simms as lacking
integrity, character, and good judgment. (See D.N. 90-3, PageID # 1984) Construing these facts
in the light most favorable to Plaintiffs, Simms’s reference to “Printer-gate” imputed criminal
conduct—theft—to Plaintiffs. Kentucky law is clear that such statements amount to defamation
per se. Stringer, 151 S.W.3d at 795 (listing statements imputing “felonious misappropriation to
the plaintiff” found by Kentucky courts to be slanderous per se, including both direct and indirect
accusations of theft (quoting David A. Elder, Kentucky Tort Law: Defamation and the Right of
Privacy § 1.07(C)(1)(b) at 68 (1983))).
Charter asserts the defense of truth, arguing that Plaintiffs indisputably took the printers
without “the requisite authorization.” (D.N. 89-1, PageID # 1509) Viewed in the light most
favorable to Plaintiffs, however, Simms’s comments implied not merely that Plaintiffs
“accept[ed] printers without authorization” (id.), but that their actions were illegal. Charter does
not contend that Plaintiffs acted with criminal intent notwithstanding their failure to follow the
proper procedure for acquiring the printers. Indeed, the evidence suggests that Plaintiffs made
no attempt to hide their actions: Showalter testified that printers were openly loaded into
employees’ cars, sometimes in view of facility manager Doug Bruenderman, and that “[t]here
10
was . . . nothing secretive to it.” (D.N. 90-9, PageID # 2063; see id., PageID # 2064) Charter
thus has not met its burden to establish the truth of the allegedly defamatory statement. See
Stringer, 151 S.W.3d at 796.
The Court rejects Charter’s attempts to reframe the inquiry by isolating the term “Printergate.” (See D.N. 89-1, PageID # 1499-1503, 1505-06; D.N. 94, PageID # 2187-89) As even
Charter acknowledges, an allegedly defamatory statement must be considered “in the whole
context of its publication.”
Yancey, 786 S.W.2d at 857.
(See D.N. 94, PageID # 2187
(“Particular words cannot be stripped of their context. They must be evaluated in context.”
(citation omitted))) By lumping Printer-gate (and therefore Plaintiffs) together with criminal
incidents and indicating that the employees involved in those incidents lacked integrity, Simms
arguably painted Plaintiffs as criminals. Contrary to Charter’s contention (see id.), Simms’s
comment that the employees associated with the three scandals were “not bad people” but
“people we know and love” does not preclude a finding that his language was defamatory. See
Yancey, 786 S.W.2d at 857-58 (agreeing with trial court that “the article including the alleged
defamatory language . . . contained a number of favorable comments concerning” the plaintiff
but nevertheless concluding that a certain statement in the article was “capable of bearing a
defamatory meaning”). Finally, Charter cites no Kentucky cases in support of its argument that
“accusations of single instances of mistake or misconduct are not defamatory” (D.N. 94, PageID
# 2187), and the Court is aware of none. In any event, as discussed above, the language at issue
here could be interpreted as going beyond a mere accusation of mistake or misconduct.
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III.
CONCLUSION
Because a genuine dispute of material fact remains as to Plaintiffs’ defamation claim,
summary judgment is not warranted. Accordingly, and the Court being otherwise sufficiently
advised, it is hereby
ORDERED as follows:
(1)
Charter’s objection to the magistrate judge’s June 13, 2017 Order (D.N. 105) is
OVERRULED. The Clerk of Court is DIRECTED to unseal the investigative report prepared
by Rodger Simms (D.N. 93).
(2)
Charter’s motion for summary judgment (D.N. 89) is DENIED.
January 4, 2018
David J. Hale, Judge
United States District Court
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