Overbey et al v. Mayor and City Council Baltimore et al
Filing
64
MEMORANDUM OPINION. Signed by Judge Deborah K. Chasanow on 9/21/2020. (sat, Chambers)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
ASHLEY AMARIS OVERBEY, et al.
:
v.
:
Civil Action No. DKC 17-1793
:
THE MAYOR AND CITY COUNCIL OF
BALTIMORE, et al.
:
MEMORANDUM OPINION
This case is before the court upon remand from the United
States Court of Appeals for the Fourth Circuit. (ECF Nos. 39, 42);
Overbey v. Mayor of Baltimore, 930 F.3d 215 (4th Cir. 2019).
In
order to place the current issues in context, some history is
required.
I.
Background
Plaintiffs are Ashley Amaris Overbey (“Ms. Overbey”) and a
local newspaper, the Baltimore Brew (“the Brew”).
On June 30,
2017, Plaintiffs filed an amended complaint against the Mayor and
City Council of Baltimore (“the City”) and the Baltimore City
Police
Department
(“BPD”)
for
damages,
for
declaratory
and
injunctive relief under the First Amendment, and for breach of
contract and violation of the public policy of the state of
Maryland.
(ECF No. 5).
Although there is no reference to 42
U.S.C. § 1983 in the complaint, it does refer to the action as a
“federal civil rights case.”1
The
dispute
concerns
a
(ECF No. 5, ¶ 5).
“non-disparagement”
clause
settlement agreement between Ms. Overbey and the City.
in
a
The clause
required Plaintiff not to speak to the media or publicly about
either the underlying allegations or the settlement process. (ECF
No. 11-4, at 6).2
A violation of this clause rendered the claimant
liable to the City for damages equal to half of the settlement
award.
(Id.).
at 3, 9).
The parties settled her claim for $63,000.
(Id.,
The City subsequently determined that she had violated
the non-disparagement clause. (ECF No. 11-6, at 2).
When the
settlement was ultimately approved, the City provided only $31,500
(instead of the full sum of $63,000) of the agreed payment and
1
The failure to cite to the statute is not fatal to the
claim.
Johnson v. City of Shelby, Miss., 574 U.S. 10, 11
(2014)(per curiam)(“[N]o heightened pleading rule requires
plaintiffs seeking damages for violations of constitutional rights
to invoke § 1983 expressly in order to state a claim.”
Other
courts have recognized that “the means by which a private
individual seeks money damages for violation of his or her
constitutional rights is by the mechanism of 42 U.S.C. § 1983.”
Gerald v. Locksley, 785 F.Supp.2d 1074, 1131 n. 8 (D.N.M. 2011)).
(citing Schaefer v. Las Cruces Pub. Sch. Dist., 716 F.Supp.2d 1052,
1072 (D.N.M. 2010)).
2
Defendant appended this exhibit, and the other exhibit
relied on in this section, to its original motion to dismiss. (ECF
Nos. 11-4, 11-6). Plaintiff has not disputed the authenticity of
this evidence, and, in fact, references both documents in her
motion for summary judgment. (ECF No. 61-1, at 3-4).
2
retained the rest as “liquidated damages.”
(ECF No. 11-6, at 2).
This suit followed.
In response to the amended complaint, BPD moved to dismiss
the complaint for failure to state a claim.
(ECF No. 10).3
The
City also moved to dismiss or, alternatively for summary judgment.
(ECF. No. 11).
The district court treated the later as a motion
for summary judgment and granted both parties’ motions.
(ECF Nos.
32, 33); Overbey v. Major & City Couns. Of Balt., No. MJG-17-1793,
2017 WL 5885657 (D.Md. November 29, 2017).
As it related to Ms.
Overbey’s First Amendment claim, the district court reasoned that
a waiver of her First Amendment right to speak was “knowing” and
“voluntarily
given”
in
signing
the
settlement,
and
enforcement of that waiver was not contrary to public policy.
at *6.
that
Id.
The court also ruled that the Brew lacked standing to
challenge the City’s use of a non-disparagement clause.
Ms. Overbey and the Brew appealed.
(ECF No. 34).
Id.
Both
The Fourth
Circuit reversed the summary judgment motion as it related to both
parties and remanded the case.
Overbey, 930 F.3d at 230.4
3
Although Plaintiffs’ notice of appeal encompassed the
dismissal of the claims against BPD, they did not press that
appeal, and the Fourth Circuit did not review the dismissal.
Accordingly, those claims remain dismissed and the dismissal will
be reflected in the final order.
4
The case was reassigned to this member of the court after
the retirement of the initial district judge.
3
On December 16, 2019, Ms. Overbey filed a motion for summary
judgment.
(ECF No. 61).
motion on January 8, 2020.
The City filed an opposition to this
(ECF No. 62).
filed her reply on January 31, 2020.
Finally, Ms. Overbey
(ECF No. 63).
II. Standard of Review
Summary judgment is appropriate under Fed.R.Civ.P. 56(c) when
there is no genuine issue as to any material fact, and the moving
party is plainly entitled to judgment in its favor as a matter of
law.
In Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986)
the Supreme Court explained that in considering a motion for
summary judgment, the “judge’s function is not himself to weigh
the evidence and determine the truth of the matter but to determine
whether there is a genuine issue for trial.”
A dispute about a
material fact is genuine “if the evidence is such that a reasonable
jury could return a verdict for the nonmoving party.”
Id. at 248.
Thus, “the judge must ask himself not whether he thinks the
evidence unmistakably favors one side or the other but whether a
fair-minded jury could return a verdict for the [nonmoving party]
on the evidence presented.”
Id. at 252.
In undertaking this inquiry, a court must view the facts and
the
reasonable
inferences
drawn
therefrom
favorable to the party opposing the motion.”
“in
a
light
most
Matsushita Elec.
Indus. Co. Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)
(quoting United States v. Diebold, Inc., 369 U.S. 654, 655 (1962));
4
see also E.E.O.C. v. Navy Fed. Credit Union, 424 F.3d 397, 405 (4th
Cir.2005).
The mere existence of a “scintilla” of evidence in
support of the non-moving party’s case is not sufficient to
preclude an order granting summary judgment. See Anderson, 477
U.S. at 252.
This court has previously held that a “party cannot create a
genuine dispute of material fact through mere speculation or
compilation of inferences.”
Shin v. Shalala, 166 F.Supp.2d 373,
375 (D.Md. 2001) (citation omitted).
Indeed, the court has an
affirmative obligation to prevent factually unsupported claims and
defenses from going to trial.
See Drewitt v. Pratt, 999 F.2d 774,
778–79 (4th Cir. 1993) (quoting Felty v. Graves–Humpreys Co., 818
F.2d 1126, 1128 (4th Cir. 1987)).
III. Analysis
A. Baltimore Brew’s Claims
The only claim of Baltimore Brew’s that the Fourth Circuit
allowed to proceed was “its allegation that the City’s pervasive
use
of
non-disparagement
clauses
in
settlements
with
police
brutality claimants ‘impedes the ability of the press generally,
and Baltimore Brew specifically, to fully carry out the important
role the press plays in informing the public about government
actions.’”
Overbey 930 F.3d at 230.
The Baltimore Brew sought
“declaratory and injunctive relief” and thus to establish standing
it “must establish ongoing or future injury in fact.”
5
Id. (citing
Kenny v. Wilson, 885 F.3d 280, 287 (4th Cir. 2018)).
The court
refused to allow the Brew to “rely on prior harms” in seeking
injunctive and declaratory relief.
Id. (citing Abbot v. Pastides,
900 F.3d 160, 176 (4th Cir. 2018)).
The City’s letter to the court on October 2, 2019 points out
that it has stopped using the non-disparagement clause that was
used in Ms. Oberbey’s settlement since “at least” November 2017.
(ECF No. 56, at 2).
The new clause merely requires the “Releasing
Party” to “strictly limit their public comments . . . to the facts
alleged in the pleadings and motions filed with the court” instead
of the outright “prohibition” against discussing “any opinions,
facts or allegations in any way connected to the Litigation or the
Occurrence.”
(ECF No. 56-1).
Therefore, as the City rightly
argues, “[a]s to the Brew, this case is moot.”
2).
(ECF No. 56, at
During informal discussions, the Brew agreed that, if Bill
19-0409 was enacted by the City Council, its claims would be moot.
The bill was enacted, but no stipulation of dismissal was filed.
Accordingly, all claims by the Brew will be dismissed.
B. Ms. Overbey’s Claims
1. The Void Non-Disparagement Clause
Ms. Overbey moves for summary judgment, contending that there
is no dispute of material fact that, in withholding half of the
settlement
proceeds
based
on
an
unenforceable
clause
in
the
agreement, the City of Baltimore violated her rights under 42
6
U.S.C. § 1983.
As damages, she seeks the money along with
prejudgment interest from the date of the settlement agreement.5
The City does not dispute that it withheld the money, does not
really contend that the non-disparagement clause is enforceable,
but laments that it lost the case on appeal.
It does dispute what
the proper measure of damages should be.
“Compensatory damages may be recovered in § 1983 actions for
proven violations of constitutional right, but only for any actual
harms caused by the violation and not for the violation standing
alone.” Norwood v. Bain, 143 F.3d 843, 855, (4th Cir. 1998) (citing
Carey v. Piphus, 435 U.S. 247 (1978); Memphis Cmty. Sch. District
v. Stachura, 477 U.S. 299 (1986)), aff’d in relevant part on reh’g
per curiam en banc, rev’d on other grounds, 166 F.3d 243, 245
(affirming compensatory damages); see also Knussman v. Maryland,
272 F.3d.625, 639 (4th Cir. 2001) (citing Memphis, 477 U.S. at 307)
(presuming an award for “direct pecuniary harms such as loss of
income” is available under § 1983 while arguing for recovery for
emotional injury as well); Kane v. Lewis, 605 Fed. Appx. 229, 239
(4th Cir. 2015) (citing Carey, 435 U.S. at 254) (“[T]he basic
purpose of a § 1983 damages award should be to compensate persons
for
injuries
right[.]”).
5
caused
by
the
deprivation
of
constitutional
“Actual harms resulting from conduct that violated
She no longer seeks declaratory or injunctive relief.
7
the right may include economic loss, physical injury, or emotional
distress.” Norwood, 143 F.3d at 855 (citing Blackburn v. Snow, 771
F.2d 556 (1st Cir. 1985)(emotional distress caused by illegal strip
search)); Spell v McDaniel, 824 F.2d 1380 (4th Cir. 1987)(pain and
suffering and medical expense cause by police brutality to person
in custody); see also Westerfield v. U.S., 483 Fed.Appx. 950, 956
(6th Cir. 2012)(defendant has “right to a fair trial compensable
in damages under 42 U.S.C. § 1983 for such injury as he is able to
prove—e.g., impairment of reputation, personal humiliation, mental
anguish and emotional distress”).
In the absence of actual harm,
an award of nominal damages is appropriate.
The actual harm alleged here is the loss of half of the
settlement proceeds due to the unconstitutional enforcement of the
non-disparagement
clause.
As
Ms.
Overbey
points
out,
the
settlement contract she signed with the City has a severability
provision detailing the effect of a void non-disparagement clause
on the contract as a whole.
(ECF No. 61-1, at 10-11).
applicable provision reads:
14. Severability: In the event that any
covenant, condition, or other provision
contained in this Agreement is held to be
invalid, void, or illegal by any court of
competent jurisdiction, the same shall be
deemed severable from the remainder of this
Agreement and shall in no way affect, impair
or invalidate any other covenant, condition or
other provision contained herein. If such
condition, covenant or other provision shall
be deemed invalid due to its scope of breadth,
8
The
such covenant, condition or other provision
shall be deemed valid to the extent of the
scope of breadth permitted by law.
(ECF No. 11-4, at 7).
The meaning of this section is clear.
When
a condition is declared “void,” as here with the non-disparagement
provision, this void condition is simply removed.
The contract is
left otherwise unaffected and enforceable as if the contingency
never occurred.
Seemingly acknowledging that the settlement agreement is not
entirely void, the City instead frames the issue as one of proper
remedy.
It admits that “one view” is that Ms. Overbey is simply
owed the $31,500, the damages she sought in her amended complaint.
(ECF No. 62, at 3) (citing ECF No. 5).
The City argues that this
would be the measure of damages for a breach of contract, and the
parties agree that all breach of contract claims are now timebarred by the applicable statute of limitations.
3-4).
is
(ECF No. 62, at
Instead, it asserts the “better view” is that Ms. Overbey
only
entitled
to
“nominal
damages
of
one
dollar”
for
an
infringement of her First Amendment right to speak, “perhaps
coupled with a formal declaration to that effect.”
(ECF No. 62,
at 4) (citing KH Outdoor, LLC v. City of Trussville, 465 F.3d 1256,
1261 (11th Cir. 2006)).
The City’s reading of KH Outdoor in
fashioning this proposed remedy overlooks half of the holding.
The
Eleventh
Circuit
held,
“[t]o
recover
nominal
damages,
[Plaintiff] is not required to prove actual injury” as it was
9
responding to the district court’s finding that no actual injury
existed.
KH Outdoor, 465 F.3d at 1259.
established.
Ms.
Overbey
would
have
Here actual injury is
the
other
half
of
the
settlement amount “but for the [unenforceable]6 non-disparagement
provision.”
(ECF No. 63, at 5).
The City owes Ms. Overbey the other $31,500.
By its conduct
in unconstitutionally enforcing the now discredited clause, the
City withheld half of the settlement proceeds.
Thus, the civil
rights violation caused $31,500 in economic harm.
The only remaining questions are 1) whether the City should
have to pay prejudgment interest on this amount dating back to the
settlement agreement, approved in September 2014, and paid in
October 2014,
(ECF Nos. 61-1, at 12-14; 62, at 4-8), and 2) if
so, at what rate.
2. Prejudgment Interest
The availability of prejudgment interest on claims under §
1983 is governed by federal law.
Nance v. City of Newark, 501
Fed.Appx. 123, 129 n.5 (3d Cir. 2012) (citing Simmons v. City of
Phila., 947 F.2d 1042, 1088 (3d Cir. 1981)); Fox v. Fox, 167 F.3d
6
Ms. Overbey actually says “unconstitutional” here, but it
is important to note that while the Fourth Circuit found the clause
“an unenforceable waiver of her First Amendment rights,” the court
stopped short of declaring the clause itself unconstitutional,
although it did leave this line of argument open to Ms. Overbey.
930 F.3d at 222 n. 6.
10
880, 884 (4th Cir. 1999) (“Federal law controls the issuance of
prejudgment interest awarded on federal claims.”).
Both
parties
correctly
point
out
that
whether
to
grant
prejudgment interest in this case is within the “sound discretion”
of the trial court.
(ECF Nos. 63, at 6; 62, at 7); Quesinberry v.
Life Ins. Co. of N. Am., 987 F.2d 1017, 1030-31 (4th Cir. 1993)
(“[A]bsent
a
statutory
mandate[,]
the
award
of
interest is discretionary with the trial court.”).
prejudgment
As noted in
Crump v. United States Dept. of Navy, 205 F.Supp.3d 730,
748-49
(E.D.Va. 2016), “the Fourth Circuit has explained that there are
few circumstances that would justify the denial of prejudgment
interest,” when necessary to provide complete compensation for an
injury.
“The essential rationale for awarding prejudgment interest
is to ensure that an injured party is fully compensated for its
loss.”
Feldman’s Med. Ctr. Pharm. Inc. v. CareFirst, Inc., 823
F.Supp.2d 307, 324 (D.Md. 2011) (citing City of Milwaukee v. Cement
Div., Nat’l Gypsum Co., 515 U.S. 189, 195 (1995)); see also
Imgarten v. Bellboy Corp., 383 F.Supp.2d 825, 848 (D.Md. 2005)
(citing Berman Props. V. Porter Bros., Inc., 276 Md. 1 (1975))
(“The
purpose
of
pre-judgment
interest
is
to
compensate
the
aggrieved party for the deprivation of money it was owed, primarily
the income that the money could have earned.”); Fox, 167 F.3d at
884.
Specifically, “[p]rejudgment interest is viewed as a form of
11
compensatory damage designed to place the plaintiff in the same
position as if no violation occurred.”
Feldman’s, F.Supp.2d at
324 (citing City of Milwaukee, 515 U.S. at 195).
Ms. Overbey will be awarded interest on the remaining $31,500
due to her as per the Settlement Agreement dating to the time of
payment pursuant to that agreement, October 8, 2014.
The City
continues to defend its use of the non-disparagement clause and
the “real and substantial questions presented” by facts that led
to the settlement agreement in the first place.
7-8).
(ECF No. 62, at
Therefore, it cites shock that “that the challenge would
bear fruit” here and that the serendipity that allowed Ms. Overby’s
claim to survive was akin to a “virtual lightning strike.”
at 4-5).
(Id.,
The seeming inference is that their illegal act should
not be undone simply because no one thought, or even suspected, it
was illegal at the time.7
point.
Even if true, all this is beside the
The City entered the settlement agreement it helped craft
knowing that its severability provision contemplated this exact
scenario: that a clause may be deemed “invalid, void and illegal,”
and that it would subsequently be stricken from the agreement.
Just as “strong public interests” render the clause unenforceable,
7
The City is correct that enforcement of the clause only
became “illegal” when two Fourth Circuit judges said it was in
issuing an opinion on July 11, 2019. (ECF No. 62, at 6). But as
it concedes, “[t]he panel majority’s published opinion is the law
of this Circuit.” (Id., at 2).
12
Overbey, 930 F.3d at 226, those interests counsel against allowing
the City to keep the fruits of such improper enforcement.
The
purpose of prejudgment interest is to complete the compensatory
damages award and will accrue from the date the full payment should
have been made.
Ms. Overbey argues for applying Maryland’s legal rate of
interest of six percent, compounded annually.
(ECF No. 61-1, at
12 n.7) (citing Quesinberry, 987 F.2d at 1031 (noting that the
district
court
used
prejudgment interest)).
Virginia’s
statutory
rate
in
awarding
Here, the underlying settlement agreement
has a choice-of-law provision applying the laws of Maryland.
No. 11-4, at 8).
(ECF
Therefore, Maryland’s six percent interest rate,
compounded annually, will apply from the agreement’s date of
execution.
IV.
Md. Code, Com. § 12-102.
Conclusion
For the foregoing reasons, Ms. Overbey’s motion for summary
judgment will be granted.
A separate order will follow.
/s/
DEBORAH K. CHASANOW
United States District Judge
13
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