Spreadbury v. Bitterroot Public Library et al

Filing 107

ORDER ADOPTING FINDINGS AND RECOMMENDATIONS for 67 Findings and Recommendations regarding 50 Motion for Partial Summary Judgment filed by Michael E. Spreadbury and 11 Motion to Dismiss filed by Boone Karlberg P.C. Signed by Judge Donald W. Molloy on 9/27/2011. (APP, ) Copy mailed to Spreadbury this date.

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MONTANA

MISSOULA DIVISION

MICHAEL E. SPREADBURY,

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Plaintiff,
VS.

BITTERROOT PUBLIC LIBRARY,
CITY OF HAMILTON,
LEE ENTERPRISES, INC, and
BOONE KARLBERG P.C

CV ll-64-M-DWM-JCL

ORDER

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Defendants.

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July 21, 2011, Magistrate Judge Lynch entered Findings and
Recommendations as to the dispute between Plaintiff Michael E. Spreadbury and
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Defendant Boone Karlberg, P.C. (diet # 67). Judge Lynch recommended this Court
grant Boone Karlberg's 12(b)(6) motion to dismiss Plaintiffs complaint for failure
to state a claim upon which relief can be granted (diet # 11), and deny Plaintiff
Michael E. Spreadbury's motion for summary judgment on his claims against
Boone Karlberg (dkt # 50). Spreadbury timely objected to the Findings and
Recommendation on August 4,2011 (dkt # 80), and Boone Karlberg filed a
response to Spreadbury's objection (dkt # 81). Spreadbury is entitled to de novo
review of those findings or recommendations to which he objected. 28 U.S.C. §
636(b)(1). The portions of the Findings and Recommendation not specifically
objected to will be reviewed for clear error. McDonnell Douglas Corp. v.
Commodore Bus. Mach., Inc., 656 F.2d 1309, 1313 (9th Cir. 198 I).
Spreadbury alleges that Boone Karlberg, P.C. filed pleadings and briefs in
state district court and the Montana Supreme Court that contained false
information about Spreadbury (Second Amended Complaint, -,]-,] 59, 60, 62, 63, dkt

# 90). Spreadbury's claims against Boone Karlberg all arise from this allegation.
The claims asserted are defamation, violation of his constitutional rights under §
1983, negligence, tortious interference with prospective economic advantage, and
negligent and intentional infliction of emotional distress.
Judge Lynch found that all the claims against Boone Karlberg should be
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dismissed for failure to state a claim upon which relief can be granted because
Boone Karlberg's statements were absolutely privileged, Boone Karlberg's
conduct does not qualify as state action, and Spreadbury alleged no specific facts
to support his claim that Boone Karlberg engaged in a conspiracy. Spreadbury
argues that Judge Lynch incorrectly interpreted Montana's privilege statute, that
Boone Karlberg acted under color of law, and that he should have been granted an
opportunity to amend his complaint.
Because I agree with Judge Lynch's analysis and conclusions, I adopt his
Findings and Recommendations in full. The procedural and factual background of
the case will not be restated here as the parties are familiar with it, and it is
described in the adopted Findings and Recommendations.
I.

Under Montana Code Annotated § 27-1-801, defamation is effected by libel
or slander. Libel and slander both require that there be a "false and unprivileged
publication." Mont. Code Ann. §§ 27-1-802 and -803 (emphasis added). The
Montana Code Annotated lists four types of publication that are privileged and so
cannot constitute defamation. § 27- 1-804. Section 27-1-804(2) applies here: "A
privileged publication is one made ... (2) in any legislative or judicial proceeding or
in any other official proceeding authorized by law." Lack of malice is not required
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for a statement to be privileged under § 27-1-804(2). Skinner v. Pistoria, 633 P.2d
672,675-76 (Mont. 1981)("From the language used in this particular subsection,
the privilege conferred is absolute and is therefore unaffected by the presence of
malice").
Plaintiff appears to rely on § 27-1-804(4) in arguing that Boone Karlberg's
statements, if made with malice, would not be privileged. This section, unlike §
27-1-804(2), requires that a "report.. of a judicial, legislative, or other public
official proceeding" be "without malice." § 27-1-804(4).
As discussed by Judge Lynch, § 27-1-804(2) applies to statements made in
judicial proceedings, and § 27-1-804(4) applies to reports o/judicial proceedings.
"Judicial proceedings" include pleadings filed with a court, even if they have not
yet been acted on by the court. Cox v. Lee Enterprises, Inc., 723 P.2d 238, 240
(Mont. 1986). Pleadings are a "step taken in a court ofjustice in the prosecution
or defense of an action" and are thus in judicial proceedings. Id. (quoting Black's
Law Dictionary, 986 (4th ed. 1968». A second-hand account of what the
pleadings say, such as a newspaper story describing a complaint, is an example of
a report o/judicial proceedings. See lil
Under § 27-1-802(2), Montana grants absolute immunity for statements
made in judicial proceedings, even if they cause hann:
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We recognize that unfounded and harmful charges cast under a shield
of immunity may in some situations cause real and substantial injury.
Nonetheless, the broad policy considerations supporting this
immunity have been determined by the legislature to outweigh the
likelihood that victims of defamatory statements may be denied
appropriate redress.
Skinner, 633 P.2d at 676. The statements made by Boone Karlberg all appeared in
pleadings. (Second Amended Complaint, ~~ 59, 60, 62, 63, 163). Thus, they are
privileged under § 27-1-804(2), and it is irrelevant whether they were motivated
by malice. No facts could sustain a defamation claim against Boone Karlberg for
absolutely privileged statements. For the same reason, this Court cannot enjoin
future statements by Boone Karlberg that are made in the context of court
proceedings.
Thus, there is no clear error in Judge Lynch's recommendation to
dismiss counts 16 (defamation) and 22 (injunctive relief).
II

Nor is there clear error in Judge Lynch's dismissal of the negligence,
negligent infliction of emotional distress, tortious interference with prospective
economic advantage, and intentional infliction of emotional distress claims.
Boone Karlberg's absolutely privileged statements cannot serve as a basis for
these claims, and even if they could, Spreadbury has alleged no facts that would

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support the claims.
Montana's judicial proceedings privilege would not be absolute if plaintiffs
could simply call an allegation that is essentially a defamation claim a different
name and be allowed to plead it. The Montana Supreme Court has relied on the
Restatement (Second) of Torts' broad definition of the privilege. E.g. Sacco v.
High Country Independent Press. Inc., 896 P.2d 411, 430 (Mont. 1995). The
Restatement states:
An attorney at law is absolutely privileged to publish defamatory
matter concerning another in communications preliminary to a
proposed judicial proceeding, or in the institution of, or during the
course and as a part of, a judicial proceeding in which he participates
as counsel, if it has some relation to the proceeding.

Restatement (Second) of Torts, § 586 (emphasis edded). Though the Montana
Supreme Court does not appear to have considered the issue, it would likely
extend this privilege to claims besides defamation that also seek relief for an
attorney's "publi[cation of] defamatory matter concerning another in
communications preliminary to a proposed judicial proceeding, or in the
institution of, or during the course and as a part of, a judicial proceeding in which
he participates as counsel, if it has some relation to the proceeding." Id.
Overwhelming authority from other jurisdictions supports this approach.
E.g. Campbell v. Castle Stone Homes. Inc., 2011 WL 902637 (D. Utah
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2011 )(noting that Utah courts apply the judicial proceedings privilege to claims
besides defamation, including intentional interference with business relations,
invasion of privacy, and intentional infliction of emotional distress); Laub v.
Pesikoff, 979 S.W.2d 686, 691-92 (Tex. App. 1998)(the privilege applies where
"the essence" of the claim is that the claimant "suffered injury as a result ofthe
communication of allegedly false statements during a judicial proceeding");

DeLaurentis v. City of New Haven, 597 A.2d 807, 826-27 (Conn.
199l)(extending the common law privilege for statements made in a judicial
proceeding to intentional infliction of emotional distress claims).
Where a claim is based on the same acts and injury as a defamation claim,
extending the judicial proceedings privilege protects the judicial process itself. If
plaintiffs could simply substitute a defamation claim with negligent or intentional
infliction of emotional distress or negligence in order to evade the privilege, "the
privilege we have held protects defendant from an action for defamation would be
eviscerated, and the public policy providing advocates the security to zealously
pursue cases on behalf of their clients would be completely undermined." Jones v.
Coward, 666 S.E.2d 877, 880 (N.C. App. 2008). See also Barker v. Huang, 610
A.3d 1341, 1348-49 (DeL 1992)("The absolute privilege would be meaningless if
a simple recasting of the cause of action from 'defamation' to 'intentional
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infliction of emotional distress' or 'invasion of privacy' could void its effect.");
Silber~

v. Anderson, 786 P.2d 365 (Cal. 1990) (the privilege "immuniz[es]

participants from liability for torts arising from communications made during
judicial proceedings" in order to promote the effectiveness of judicial proceedings
by encouraging open communication).
Thus, there is no clear error in Judge Lynch's recommendation to dismiss
counts 8 (tortious interference), 15 (negligence), 20 (intentional infliction of
emotional distress), and 21 (negligent infliction of emotional distress).

III.
In his Objection, Spreadbury next contends that Boone Karlberg, acting
under the color of law engaged in both civil and criminal conspiracy to defame
Spreadbury and deprive him of his constitutional rights. Spreadbury alleges this
violated his constitutional rights under 42 U.S.C. § 1983. Section 1983 states, in
part:
Every person who, under color of any statute, ordinance, regulation, custom,
or usage of any State or Territory of the District of Columbia, subjects, or
causes to be subjected, any citizen of the United States or other person
within the jurisdiction thereof to the deprivation of any rights, privileges, or
immunities secured by the Constitution and laws, shall be liable to the party
injured[.]
42 U.S.c. § 1983. A plaintiff can bring a claim under § 1983 against a state

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official or employee if the plaintiff can establish that person was acting under the
color of state law and deprived the plaintiff of a federal right. Kirtley v. Rainey,
326 F.3d 1088, 1092 (9th Cir. 2003). However, § 1983 does not generally apply
to the conduct of private parties.!d. "The state-action element in § 1983 'excludes
from its reach merely private conduct, no matter how discriminatory or
wrongful.'" Caviness v. Horizon Community Learning Ctr. Inc., 590 F.3d 806,
812 (9th Cir. 201O)(quoting Am. Mfrs. Mut. Ins. Co. v. Sullivan, 526 U.S. 40,50
(1999». Though private actors are generally not liable under § 1983, they may be
if their conduct qualifies as "state action."
Spreadbury contends that, though Boone Karlberg is not a state actor, its
conduct constitutes state action for the purpose of imposing liability on a private
party. The Ninth Circuit has recognized the following four tests to identifY private
action that qualifies as state action: "(1) public function; (2) joint action; (3)
governmental compulsion or coercion; and (4) governmental nexus." Kirtley, 326
F.3d at 1092 (quotation omitted). Spreadbury argues that the conduct of Boone
Karlberg meets the requirements for state action under both the joint action and
nexus tests. PI.'s Objection (dkt # 80 at 2).
A private individual may be liable under § 1983 "if she conspired or entered
joint action with a state actor," Crowe v. Co. of San Diego, 608 F.3d 406, 440 (9th
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Cir. 20 I O)(quoting Franklin v. Fox, 312 F.3d 423, 441 (9th Cir. 2002», or the
state accepts the benefits ofthe private actor's conduct, Kirtley, 326 F.3d at 1093.
To state a viable claim of conspiracy that violates a plaintiff's constitutional rights
under 42 U.S.c. § 1983, "the plaintiff must [allege] specific facts to support the
existence of the claimed conspiracy." Bums v. Co. of King, 883 F.3d 819, 821
(9th Cir. 1989)( citation omitted). "[M]ere invocation of state judicial process ...
does not constitute 'joint participation' or 'conspiracy' with state officials
sufficient to satisfy § 1983's state action requirement." Schucker v. Rockwood,
846 F.2d 1202, 1205 (9th Cir. 1988).
Spreadbury has failed to allege specific facts to support the existence of the
conspiracy between Boone Karlberg and the state. Spreadbury only alleges that
the two engaged in "joint action" and that Boone Karlberg's action "constitutes
civil, criminal conspiracy." Pl.'s Objection (dkt # 80 at 4). Because these
statements provide no specific facts, Spreadbury's allegations regarding
conspiracy between Boone Karlberg and the state are simply conclusory
assertions. Conclusory allegations of conspiracy are not sufficient to support a
claim for state action and a violation of constitutional rights under § 1983.
Woodrum v. Woodward Co.. Okla .. 866 F.2d 1121,1126 (9th Cir. 1989).
Therefore, as a matter of law, Spreadbury has failed to allege conspiracy
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amounting to joint action between Boone Karlberg and the state.
Spreadbury also contends that Boone Karlberg's conduct constitutes state
action based on the "nexus test." A private party's conduct may be deemed state
action if "there is such a close nexus between the State and the challenged action
that the seemingly private behavior may be fairly treated as that of the State itself."
Kirtley, 326 F.3d at 1095 (quoting Brentwood Acad. v. Tenn. Secondary Sch.
Athletic Assoc., 531 U.S. 288,295 (2001». The only fact that Spreadbury asserts
is that Boone Karlberg represented Bell and Roddy. Pl.'s Objection (dkt # 80 at 4).
However, as Judge Lynch discussed, Boone Karlberg's role as opposing counsel
representing individual state actors is insufficient to make it a state actor. See
Miranda v. Clark Co., Nev., 319 F.3d 465,468 (9th Cir. 2003). Even though the
government may hire and pay an attorney, a traditional lawyer role controls and
the attorney's function is "to represent his client, not the interests of the state ...."

Additionally, Spreadbury's claims under the Stigma-Plus analysis would not
apply to Boone Karlberg. The first prong of this analysis requires the stigmatizing
action, such as a false allegation, be performed by a state official. Paul v. Davis,
424 U.S. 693, 698 (1976). However, if a private individual makes the allegations
about the plaintiff, the plaintiff may have a claim for defamation under state law.
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Id. Because it has been detennined that Boone Karlberg was not acting under the
color of the law during these proceedings, the stigma-plus analysis does not apply.
Spreadbury did make a claim under state law for defamation and, for the reasons
stated above, that defamation claim is not sustainable because of the privileged
nature of the statements.
For the reasons stated, Spreadbury does not provide any facts from which
one could plausibly detennine that Boone Karlberg's alleged conduct qualifies as
state action under any of the four tests, including the two Spreadbury specifically
suggests in his Objection. Because claims under 42 U.S.C. § 1983 are based on
conduct of a state actor and state action has not been shown here, Spreadbury's
claims against Boone Karlberg under 42 U.S.C. § 1983 are dismissed.
IV.

Spreadbury's final contention is that he should have been granted leave to
amend his complaint prior to dismissal in order to address any deficiencies. As
Judge Lynch states, the Court has the authority to dismiss a defective pleading, but
a district court should grant leave to amend even if no request to amend the
pleading was made, unless it detennines that the pleadings could not
possibly be cured by the allegation of other facts.
Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000)(quoting Doe v. United
States, 58 F.3d 494, 497 (9th Cir. 1995»), The record does not indicate the
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existence of any set of facts on which Plaintiff could make a plausible argument
that the allegedly false statements made by Boone Karlberg were not protected by
privilege. Because all of Plaintiffs other claims stem from this determination, the
pleadings could not possibly be cured by allegations of other facts.
Finally, the Court notes that Judge Lynch did not address the fraud claim
Spreadbury mentions in his Objection. This claim was only cursorily mentioned in
the introduction paragraph of Plaintiff's Second Amended Complaint (dkt # 21)
and not mentioned at all in Plaintiffs Motion for Summary Judgment (dkt # 50).
Additionally, in the Notice (dkt # 29) alleging the claim, Spreadbury only
references the Bitterroot Public Library and the City of Hamilton and does not
state with particularity the circumstances constituting fraud by Boone Karlberg.
I find no clear error in Judge Lynch's remaining findings and
recommendations.

v.
For all the above reasons, the Findings and Recommendation (dkt # 67) are
hereby ADOPTED, Plaintiff Spreadbury's Motion for Summary Judgment (dkt #
50) is DENIED, and Defendant Boone Karlberg's Motion to Dismiss (dkt # 11) is
GRANTED. Spreadbury's claims against Boone Karlberg, counts 8 (tortious
interference with prospective economic advantage), 15 (negligence), 16
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(defamation), 20 (intentional infliction of emotional distress), 21 (negligent
infliction of emotional distress), 22 (injunctive relief) and 26 (punitive damages),
are DISMISSED.
Dated this ---=--

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Donald W. Mo loy, District Judge
Unite&8tates istrict Court
I.

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