Chaffin et al v. BHP Billiton et al
Filing
21
MEMORANDUM OPINION AND ORDER by District Judge Judith C. Herrera. granting in part and denying in part 14 Defendants' Motion to Dismiss for Failure to State a Claim and granting Plaintiffs leave to amend their complaint as described herein. (baw)
IN THE UNITED STATES DISTRICT COURT
DISTRICT OF NEW MEXICO
KENNETH S. CHAFFIN and TIFFANY CHAFFIN,
Plaintiffs,
v.
No. Civ. 18-519 JCH/JHR
BHP BILLITON (f.k.a. BROKEN HILLS
PROPRIETARY COMPANY LIMITED and
a.k.a. BHP BILLITON LIMITED or BHP
BILLITON GROUP), BILLITON, PLC (a.k.a.
BHP BILLITON, PLC), BHP BILLITON MINE
MANAGEMENT COMPANY, BHP
BILLITON NEW MEXICO COAL, INC.,
RUDI HALGRYN, and RYAN WAGGONER,
Defendants.
MEMORANDUM OPINION AND ORDER
On October 12, 2018, Defendants BHP Billiton Mine Management Company (“BHPB
MMCo”), BHP Billiton New Mexico Coal, Inc. (“NMC”), Rudi Halgryn, and Ryan Waggoner
(collectively, “Defendants”) filed a Motion to Dismiss for Failure to State a Claim (ECF No. 14).
Defendants seek dismissal of Plaintiffs Kenneth and Tiffany Chaffin’s claims for common-law
wrongful discharge, intentional infliction of emotional distress, and interference with contract and
prospective economic advantage. The Court, having considered the motion, pleadings, briefs,
applicable law, and otherwise being fully advised, concludes that Defendants’ motion to dismiss
should be granted in part and denied in part as described herein.
I.
FACTUAL BACKGROUND
Since 1994, Plaintiff Kenneth Chaffin worked as an independent contractor and then
employee at the Navajo Mine in Fruitland, New Mexico. First Am. Compl. ¶ 13, ECF No. 1-1.
From May 2013 through July 29, 2016, Mr. Chaffin worked as a Field Supervisor for Defendants
BHPB MMCo. and NMC. See id. ¶¶ 7-8, 14. Mr. Chaffin entered into a written contract with the
“BHP Group,” Plaintiffs’ collective reference to BHP Billiton (“BHP”), BHP Billiton, PLC (“BHP
PLC”), BHPB MMCo, and NMC. See id. ¶¶ 3-5.
In March 2016, Mr. Chaffin gave Defendants written notice of his need to take leaves of
absences regarding the mental/emotional health of his wife, Plaintiff Tiffany Chaffin. Id. ¶ 16(b).
He asserts he was entitled to make these requests under the Family and Medical Leave Act
(“FMLA”), 29 U.S.C. § 2601 et seq., the New Mexico Human Rights Act (“NMHRA”), N.M. Stat.
Ann. § 28-1-1 et seq., and the Americans with Disabilities Act of 1990 (“ADA”), 42 U.S.C. §
12101 et seq., and as amended. Id. ¶ 16(c).
From March through July 2016, Mr. Chaffin’s direct supervisor, Maintenance
Superintendent Ryan Waggoner, began treating Mr. Chaffin as if Defendants now found him
unfavorable because of his association with a person having mental/emotional difficulties. Id. ¶
16(d). Mr. Waggoner also acted as if Mr. Chaffin was impaired or disabled, including asking coworkers whether they felt like Mr. Chaffin was still fit for duty. Id. ¶ 16(e). Mr. Chaffin “was
harassed, belittled, and discriminated and retaliated against by Defendants for incurring, having a
record of, or being regarded as having serious injuries and serious medical conditions, and/or for
having requested accommodations for the same.” Id. ¶ 17. Mr. Chaffin made complaints of this
treatment within Defendants’ corporate structure to no avail. Id. ¶ 18.
On June 3, 2016, Mr. Waggoner instructed Field Supervisor John Marts by radio to have
Mr. Chaffin remove the Out of Service tag from the left-hand overhead crane on the 7920 drag
line. Id. ¶ 16(f). Mr. Chaffin was present and within hearing distance of this conversation. Id. Mr.
Waggoner said he had verified it was ok to operate. Id. As Mr. Waggoner and Mr. Marts were
2
aware, Mr. Chaffin had no independent knowledge of what repairs or inspections had occurred
because he had taken periodic leaves of absences. Id. Mr. Waggoner removed the tag as instructed.
Id.
The week of July 5, 2016, Mr. Waggoner began changing and limiting Mr. Chaffin’s
supervisory responsibilities without explanation. Id. ¶ 16(g). On July 18, 2016, Defendants
requested more information on Mr. Chaffin’s FMLA request. Id. ¶ 16(h). On July 25, 2016, Tiffany
Chaffin’s brother died, and the funeral service was to occur on August 1, 2016. Id. ¶ 16(i).
Defendants were aware of Mr. Chaffin’s brother-in-law’s death. Id. Mr. Chaffin’s need for a leave
of absence and Mrs. Chaffin’s reliance on the health insurance provided by his employer was
immediate and critical. Id.
Defendants terminated Mr. Chaffin by letter dated July 29, 2016, for purportedly removing
the Out of Service tag from the left-hand overhead crane on the 7920 in violation of BHP’s Log
out – Tag out standards, work management processes, Charter Values, and safety concerns. See
id. ¶¶ 15, 16(j). The basis for the termination was false and Mr. Chaffin was subject to disparate
treatment as compared to Mr. Waggoner and Mr. Marts from the June 3, 2016 incident. See id. ¶
16(j). The Mine Safety and Health Administration investigated the June 3, 2016 incident and
determined that the left-hand overhead crane on the 7920 drag line was, in fact, safe to operate
when Mr. Chaffin removed the Out of Service tag at Mr. Waggoner’s and Mr. Marts’ direction.
Id. ¶ 16(k).
Around this time, Defendants were negotiating and completing the purchase of the Navajo
Mine by a third-party. See id. ¶ 16(a). Mr. Chaffin’s termination of employment before the closing
date of the sale of the mining operations interfered with and prevented him from securing
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employment with the successor company that continues to operate the mine. Id. ¶ 55. As a result,
Plaintiffs lost the benefit of their health insurance coverage. Id.
Plaintiffs filed suit in the First Judicial District Court in the State of New Mexico against
the BHP Group, Rudi Halgryn, an alleged managerial agent of BHP, and Ryan Waggoner. See id.
¶¶ 3-4, 9.1 Mr. Chaffin asserts claims for violation of the FMLA (Count I), negligent or fraudulent
misrepresentation (Count II); and common-law wrongful discharge (Count III). Id. ¶¶ 20-47. Both
Mr. Chaffin and Mrs. Chaffin set forth claims for intentional infliction of emotional distress (Count
IV), interference with contract and prospective economic advantage (Count V), and punitive
damages. Id. ¶¶ 48-60.
II.
LEGAL STANDARD
On a motion to dismiss, the court assesses the legal sufficiency of the allegations contained
within the four corners of the complaint. Archuleta v. Wagner, 523 F.3d 1278, 1281 (10th Cir.
2008). Rule 8 requires the complaint to contain "a short and plain statement of the claim showing
that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). The court accepts as true all wellpleaded facts, viewing them in the light most favorable to the nonmoving party and allowing all
reasonable inferences in favor of the nonmoving party. Archuleta, 523 F.3d at 1283. The court
"should disregard all conclusory statements of law and consider whether the remaining specific
factual allegations, if assumed to be true, plausibly suggest the defendant is liable." Kansas Penn
Gaming, LLC v. Collins, 656 F.3d 1210, 1214 (10th Cir. 2011). The complaint "does not need
detailed factual allegations," but “a formulaic recitation of the elements of a cause of action will
not do." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007).
III.
ANALYSIS
1
In a Memorandum Opinion and Order, this Court dismissed without prejudice Defendants BHP and BHP PLC for
lack of personal jurisdiction. Mem. Op. and Order, ECF No. 19.
4
Defendants move to dismiss for failure to state a claim Plaintiffs’ claims for intentional
infliction of emotional distress (Count IV), interference with contract and prospective economic
advantage, (Count V), and common law wrongful discharge (Count III). 2
A. Interference with contract and prospective economic advantage
New Mexico adopted the Restatement (Second) of Torts’ description of the tort of
interference with prospective contractual relations:
One who intentionally and improperly interferes with another’s prospective
contractual relation … is subject to liability to the other for the pecuniary harm
resulting from loss of the benefits of the relation, whether the interference consists
of
(a) inducing or otherwise causing a third person not to enter into or continue
the prospective relation or
(b) preventing the other from acquiring or continuing the prospective
relation.
M & M Rental Tools, Inc. v. Milchem, Inc., 1980-NMCA-072, ¶ 20, 612 P.2d 241 (quoting
Restatement (Second) of Torts § 766B). To establish tortious interference with a contract, the
plaintiff must prove that (1) the defendant had knowledge of the contract between the plaintiff and
a third party, (2) performance of the contract was refused, (3) the defendant played an active and
substantial part in causing the plaintiff to lose the benefits of his contract, (4) damages flowed from
the breached contract, and (5) the defendant induced the breach without justification or privilege
to do so. Ettenson v. Burke, 2001-NMCA-003, ¶ 14, 17 P.3d 440. A defendant acts without
2
Defendants also argued in their reply that their motion to dismiss should be granted because Plaintiffs filed their
response over three weeks late without any justification for their untimeliness. Defs.’ Reply 1-2, ECF No. 17. Although
Local Rule 7.1(b) states that the failure to timely serve a response constitutes consent to grant the motion, see
D.N.M.LR-Civ. 7.1(b), the Court will not grant the motion because Plaintiffs filed a response opposing the motion on
the merits, and dismissal of counts is a severe sanction when no prejudice has been shown. Plaintiffs are hereby
warned, however, that future failure to adhere to the local rules could result in more severe sanctions.
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justification or privilege when he acts either with an improper motive or by use of improper means.
Id.
“Parties to a contract cannot bring an action for tortious interference with an existing
contract against each other.” Deflon v. Sawyers, 2006-NMSC-025, ¶ 6, 137 P.3d 577 (quotations
omitted). Rather, breach of contract is the appropriate cause of action between parties to the same
contract. Id. (explaining that plaintiff-employee could not have sued her corporate employer for
interfering with her employment contract). In the case of interference with prospective contracts
and existing terminable at-will contracts, which are equivalent to prospective contracts, the
improper motive must be the sole motive. Fikes v. Furst, 2003-NMSC-033, ¶ 21, 81 P.3d 545.
Greater protection is given to an existing contract, so for a claim of interfering with an existing
contract, “the plaintiff must still prove that the defendant acted with either an improper motive or
improper means, but the improper motive need not be the sole motive.” Id. ¶ 22.
In their motion, Defendants contend that Plaintiffs cannot state a claim for tortious
interference with contract, because a party to a contract cannot tortiously interfere with his own
contract. Plaintiffs respond that Defendants Halgryn and Waggoner were not parties to Mr.
Chaffin’s employment contract with the BHP Group and that Defendants were not parties to the
third-party contracts of health insurance. Plaintiffs assert that it is Defendants’ burden to plead and
prove the good-faith/corporate-interests qualified privilege in order to avoid liability for
Defendants Halgryn and Waggoner’s alleged tortious interference with a contract. Plaintiffs also
allege that Defendants’ termination of Mr. Chaffin interfered with his prospective economic
relations with the successor operator of the Navajo Mine.
1. Defendants Halgryn and Waggoner’s alleged tortious interference
with Mr. Chaffin’s employment contract with the BHP Group
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Proving tortious interference with contract is more complicated in a corporate setting. See
Ettenson, 2001-NMCA-003, ¶ 15. “A corporate officer acting outside the scope of authority …
may be liable for interfering with a corporate contract.” Deflon, 2006-NMSC-025, ¶ 7 (emphasis
added). New Mexico has adopted the qualified immunity theory in which “a corporate officer is
privileged to interfere with his corporation’s contracts only when he acts in good faith and in the
best interests of the corporation, as opposed to his own private interests.” Id. ¶ 8 (quoting Ettenson,
2001-NMCA-003, ¶ 17). A corporate officer who interferes with a corporate contract in bad faith
and against the best interests of the corporation may be liable for tortious interference with
contract. Id. ¶ 9. “The idea behind the qualified immunity theory is that an officer acting on behalf
of a corporation should have the authority to breach a corporation's contract, leaving the
corporation to answer for the authorized breach in a breach of contract action.” Id. To determine
whether a corporate officer’s actions fall outside the scope of authority, a court must examine the
motivating forces behind the corporate officer inducing his corporation to breach its contractual
obligations, in other words, whether the corporate officer acted to satisfy personal feelings or to
serve his own private interest with no benefit to the corporation. Id. ¶ 10. A supervisor who
interferes with his subordinate’s employment contract with a discriminatory motive is not acting
in the best interests of his employer but is acting for his own interests. See id. ¶ 19 (explaining that
supervisor who interferes with employment contract of a subordinate for spurning sexual advances
is not privileged).
Whether an officer’s actions are privileged is an issue of fact. Ettenson, 2001-NMCA-003,
¶ 21. The burden is on the defendant “to plead and prove privilege as an affirmative defense.” Id.
Defendants argue that Halgryn and Waggoner can only be liable for this tort if they acted
outside the scope of their authority and Plaintiffs’ complaint is devoid of any allegation that either
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acted outside the scope of their authority. Defendants point to an allegation in the complaint
suggesting the contrary: “Each Defendant was, or acted directly or indirectly in the interest of, Mr.
Chaffin’s ‘employer’ within the meaning of 29 U.S.C. § 2611(4)(a).” First Am. Compl. ¶ 22, ECF
No. 1-1.3 Plaintiffs argue, however, that they do not have to plead and prove privilege because it
is an affirmative defense.
It is clear that New Mexico has made the good-faith/corporate-interest privilege an
affirmative defense. It is less clear, however, whether a plaintiff must plead as an element that the
corporate officer/employee was acting outside the scope of his authority to give the defendant
notice of the theory of individual liability asserted. The Court need not resolve that matter here
because there are other deficiencies in the complaint.
Having examined the First Amendment Complaint, the Court is not convinced that
Plaintiffs alleged their theory of liability against Waggoner and Halgryn with sufficient
particularity to show a plausible entitlement to relief. With respect to the claim against Halgryn,
there are minimal facts directed to what actions he took to interfere with the contract. The only
allegation specific to Defendant Halgryn is that he was a managerial agent of BHP. See First Am.
Compl. ¶ 9, ECF No. 1-1. The First Amended Complaint is lacking in non-conclusory facts
showing how Halgryn played an active and substantial part in causing Plaintiffs to lose the benefits
of the contract or how he induced the breach without justification or privilege to do so, and thus,
is lacking in establishing how Defendant Halgryn may be held individually liable under this tort.
Cf. Bogle v. Summit Investment Co., LLC, 2005-NMCA-024, ¶¶ 20-21, 107 P.3d 520 (concluding
that evidence did not support claim for intentional interference with contract against employee
3
Section 2611(4)(A) of the FMLA defines “employer” to include “any person who acts, directly or indirectly, in the
interest of an employer to any of the employees of such employer.” 29 U.S.C. § 2611(4)(A)(ii)(I).
8
individually where there was lack of any evidence establishing how employee’s motives were
separate from corporation).
As for Defendant Waggoner, the complaint alleges more specific facts as to his role in the
events, but it does not allege in Count V that he was acting outside the scope of his employment.
The other allegations related to Count V are general to “Defendants” and assert other theories
underlying the claim – that “Defendants” interfered with Mr. Chaffin’s ability to secure
employment with the successor operator of the mine and that “Defendants” interfered with Mrs.
Chaffin’s contract of health insurance. See First Am. Compl. ¶¶ 53-59, ECF No. 1-1. Although
paragraph 22 relates to the FMLA claim, it is the only paragraph relating to scope of employment
and indicates that Halgryn and Waggoner were acting in the interests of the company. Count V
incorporated by reference each paragraph of the Complaint as if fully set forth within Count V. Id.
¶ 52. From the four corners of the First Amended Complaint, it is not readily apparent that
Plaintiffs were asserting a separate theory of individual liability against Halgryn and Waggoner.
The complaint did not give Defendants sufficient notice of the theory that Halgryn and Waggoner
acted outside the scope of their authority in interfering with the BHP Group’s contract with Mr.
Chaffin. The Court thus finds that the First Amended Complaint did not adequately state a claim
for relief against Halgryn and Waggoner as to the tortious interference with a contract claim based
on the employment contract with the BHP Group.
Rule 8 permits a party to state multiple claims, regardless of consistency. Fed. R. Civ. P.
8(d)(3). It is not clear that acting in the interest of an employer under the FMLA is the same as
acting outside the scope of employment for purposes of the tort of contractual interference. Given
the lack of briefing and authority, the Court will not decide the matter now. It therefore may be
possible for Plaintiffs to allege that Waggoner and Halgryn acted outside the scope of their
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authority as to Count V, despite their allegation in paragraph 22 that each defendant acted in the
interest of Mr. Chaffin’s employer as to Count I. The Court will therefore give Plaintiffs an
opportunity to amend their complaint to add factual allegations relating to their claim for tortious
interference with a contract against Halgryn and Waggoner individually, if Plaintiffs can do so
under Rule 11. Should Plaintiffs fail to file an amended complaint within 14 days of the entry of
this Memorandum Opinion and Order, the Court will dismiss Count V’s theory of liability that
Defendants Halgryn and Waggoner are liable for interfering with Mr. Chaffin’s written contract
of employment with the BHP Group of companies.
2. Defendants’ alleged interference with contracts of health insurance
In response to Defendants’ argument that they cannot be held liable for tortious interference
with a contract to which they are a party, Plaintiffs assert that they identified a contract to which
Defendants are not a party and with which they interfered – Plaintiffs’ contract with their health
insurance company. Defendants contend that the health insurance contract is a benefit that was
only conferred as a result of the employment contract and that Defendants were therefore not a
“stranger” to the contract. Defendants assert that this claim is an attempt to circumvent the wellestablished rule that terminated employees cannot sue their employers for tortious interference
with their employment contracts, but instead for breach of contract.
Defendants cite Atlanta Market Center Management, Co. v. McLane, 503 S.E. 2d 278, 282
(Ga. 1998), for the proposition that a plaintiff can only prevail on a tortious interference with
contractual relations claim if the defendant is a third party, in other words, a “stranger” to the
contract with which the defendant allegedly interfered. The Georgia Supreme Court held that “to
be liable for tortious interference, one must be a stranger to both the contract at issue and the
business relationship giving rise to and underpinning the contract.” Id. at 283.
10
“The ‘Stranger Doctrine’ has been adopted in various forms in a limited number of
jurisdictions, including Georgia, Alabama, and Florida.” BCD, LLC, et al. v. BMW Mfg. Co., LLC,
C/A No. 6:05-CV-2152-GRA, 2007 WL 128887, *2 (D. South Carolina Jan. 12, 2007) (and cited
cases) (explaining that while South Carolina has not adopted Stranger Doctrine, it provides other
protection to third parties of a contract from tort of interference with contractual relations). See
also Kuroda v. SPJS Holdings, L.L.C., 971 A.2d 872, 884 (Del. Ch. 2009) (“[T]o state a claim for
tortious interference with contract the complaint must contain factual allegations that support a
reasonable inference that Lichtenstein, Niedermeyer, and Walton were each ‘a stranger to both the
contract and the business relationship giving rise to and underpinning the contract.’”). If the Court
were to apply this doctrine, Defendants are not strangers to the business relationship underpinning
the health insurance contract, and thus, Plaintiffs’ cause of action would not survive.
It is not clear, however, whether the New Mexico Supreme Court would adopt the rule.
Defendants did not cite a New Mexico case and the Court did not find one addressing this doctrine.
The Court need not decide whether New Mexico would follow the Stranger Doctrine because the
Court is not convinced that New Mexico would permit a tortious interference claim in this
situation.
The factual basis for Plaintiffs’ asserted interference with their health insurance contract is
the termination of the health insurance benefit/contract that occurred when the BHP Group
terminated the employment relationship. See First Am. Compl. ¶¶ 54-55, 59, ECF No. 1-1.
Plaintiffs have not alleged other actions by Defendants to interfere with the contract. Under the
reasonable inferences to be drawn from Plaintiffs’ limited facts, the breach of the health insurance
contract occurred because the payors (the BHP Group) stopped paying the health insurance
company on behalf of Plaintiffs. Although the terms of the health insurance contract are not in the
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pleadings, the BHP Group’s duty to pay that would cause the breach must flow either from the
health insurance contract itself (in which case the employer is a party to the contract) or from an
employment agreement with Mr. Chaffin in which the BHP Group agreed to pay on behalf of Mr.
Chaffin. This claim thus does not involve an action by Defendants to induce the health insurance
company to breach the agreement; rather, the breach occurred allegedly by Defendants’ failure to
pay on a contract. There are no allegations that Defendants somehow prevented Plaintiffs from
paying premiums directly to the health insurer. Plaintiffs therefore have failed to state a claim for
tortious interference with their health insurance contract. Cf. Tok Cha Kim v. CB Richard Ellis
Hawaii, Inc., 288 F. App’x 312, 315 (9th Cir. 2008) (unpublished opinion) (“Tortious interference
with existing contractual relations requires a plaintiff to show ‘the defendant's intentional
inducement of [a] third party to breach the contract.’ Kim cannot meet this requirement because it
is undisputed that she, not PGC, breached the existing lease by not paying rent after August 2003.”)
(internal citation omitted).
Furthermore, to allow this claim to stand would upend the ruling of the New Mexico
Supreme Court that a plaintiff-employee cannot sue her corporate employer for interfering with
her employment contract and allow a plaintiff to state a tortious interference with contract claim
any time an employee with health benefits is terminated. The Court does not believe the New
Mexico Supreme Court intended for the tort of interference with contractual relations to be applied
in the situation here rather than a claim for breach of contract.
3. Defendants’ alleged interference with Mr. Chaffin’s economic
relations with the successor operator of the Navajo mine
Plaintiffs’ third theory of liability in Count V is that Defendants, collectively, interfered
with Mr. Chaffin’s prospective employment contract or economic relations with a third party -the successor operator of the Navajo Mine that is unaffiliated with the BHP Group of entities. In
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reply, Defendants contend that Plaintiffs failed to cite any authority in support of this application
of tortious interference with Mr. Chaffin’s potential future employment opportunities with another
entity.
Although Plaintiffs cited no legal authority specific to this situation of a successor mine,
Plaintiffs refuted Defendants’ argument in their motion that Plaintiffs did not allege Defendants
interfered with a prospective economic relationship with a third party by explaining that the third
party is the successor mine. Defendants in their motion did not make any other arguments
regarding failing to meet other elements of this cause of action. Nor did Defendants cite authority
that Plaintiffs cannot succeed on a claim like the one alleged. Turning to the complaint, Plaintiffs
allege that Defendants interfered with Mr. Chaffin’s ability to secure employment with the
successor mine, which meets the element that the defendant prevented the plaintiff from acquiring
the prospective relation. See M & M Rental Tools, 1980-NMCA-072, ¶ 20. Plaintiffs also asserted
that Defendants intentionally fired him through improper means by falsely accusing him of
violating a safety regulation in order to unlawfully fire him for taking FMLA leave. Defendants
have not convinced the Court that Plaintiffs have not stated a claim. Accordingly, the Court will
not dismiss Plaintiffs’ tort of interference with prospective contractual relations that is based on
the theory that Defendants interfered with Plaintiffs’ prospective employment with the successor
operator of the mine.
As discussed above, however, the complaint does not contain sufficient allegations about
Defendant Halgryn’s role in Mr. Chaffin’s termination. The Court has permitted Plaintiffs leave
to amend their complaint to add factual allegations concerning his actions as they relate to this tort.
If Plaintiffs do not amend their complaint within 14 days with additional factual allegations
13
concerning Halgryn’s actions, the Court will dismiss Count V against Halgryn with respect to all
remaining theories of liability.
B. Intentional infliction of emotional distress
To prove a claim for intentional infliction of emotional distress, the plaintiff must show
that the defendant’s conduct was extreme and outrageous under the circumstances; the defendant
acted intentionally or recklessly; and as a result of the conduct the plaintiff experienced severe
emotional distress. Coates v. Wal-Mart Stores, Inc., 1999-NMSC-013, ¶ 47, 976 P.2d 999. An
employer can be held liable for an employee’s intentional infliction of emotional distress. Deflon
v. Danka Corp. Inc., 1 F.App’x 807, 822 (10th Cir. Jan. 5, 2001) (citing Coates, 976 P.2d at 1009).
Extreme and outrageous conduct must be “so outrageous in character, and so extreme in degree,
as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly
intolerable in a civilized community.” Stieber v. Journal Pub. Co., 120 N.M. 270, 274, 901 P.2d
201, 205 (Ct. App. 1995) (citation and quotations omitted); N.M. U.J.I. 13-1628.
The court should determine as a matter of law whether the conduct reasonably could be
regarded as so extreme and outrageous to permit recovery. Trujillo v. Northern Rio Arriba Elec.
Co-op, Inc., 2002-NMSC-004, ¶ 26, 41 P.3d 333 (2001). If reasonable minds could differ, the case
should be permitted to go to a jury. Id. Only in extreme circumstances can the act of firing an
employee support an intentional infliction of emotional distress claim. Id. ¶ 27. The “severe”
emotional distress required to recover under the intentional infliction of emotional distress tort
means that a reasonable person would be “unable to cope adequately with the mental distress
engendered by the circumstances” and no reasonable person could be expected to endure it. Id. ¶
28 (quotations omitted).
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Plaintiffs allege that Defendants’ “conduct in setting up and completing the termination of
Mr. Chaffin’s employment was extreme and outrageous under the circumstances, including but
not limited to the timing to coincide with the death of Mrs. Chaffin’s brother,” First. Am. Compl.
¶ 49, and that as a result they “experienced severe emotional distress,” id. ¶ 51. Defendants argue
that the evidence does not establish that their alleged conduct was extreme or outrageous.
Defendants contend that termination from a job is not enough to state a claim.
“[M]any courts have found abusive conduct not to be extreme and outrageous in
employment situations where the employer had a legitimate purpose.” Graham v. Commonwealth
Edison Co., 318 Ill.App.3d 736, 746, 742 N.E.2d 858 (Ill. App. Ct. 2000) (and cited cases). Courts,
however, have allowed a claim for intentional infliction of emotional distress in the employment
context when the employer uses its power to coerce a plaintiff into doing something he would not
otherwise do and to retaliate against the plaintiff. Id. at 747 (and cited cases). Moreover, the
Restatement of Torts acknowledges that the “extreme and outrageous character of the conduct may
arise from the actor's knowledge that the other is peculiarly susceptible to emotional distress, by
reason of some physical or mental condition or peculiarity,” so long as “major outrage” is present
as well. Restatement (Second) of Torts § 46 cmt. f.
In this case, the termination alone would not satisfy the element of extreme and outrageous
behavior, but the Court must accept Plaintiffs’ allegations as true at this stage. Plaintiffs allege that
Defendants wanted to fire and retaliate against Mr. Chaffin for using FMLA leave, and that they
intentionally set him up to violate a safety regulation in order to provide the pretextual grounds to
do so. Plaintiffs also assert that Defendants knew Mr. Chaffin took leave because of mental health
reasons for his wife and that they timed the firing to coincide with the death of his wife’s brother.
These allegations amount to more than workplace unpleasantness and fall more into the line of
15
coercion and retaliation cases courts have found to state a claim. While a close call, the Court
concludes that reasonable minds could differ on whether the alleged conduct was sufficiently
extreme to go beyond all bounds of common decency and will permit the intentional infliction of
emotional distress claim to proceed to discovery. Compare Graham, 318 Ill.App.3d at 748 (“We
find Graham's allegations of a sham investigation for the sole purpose of retaliating against him
because he reported that ComEd was violating nuclear safety regulations are sufficient to constitute
extreme and outrageous behavior.”); Dean v. Ford Motor Credit Co., 885 F.2d 300, 306-07 (5th
Cir. 1989) (holding under Texas law that where plaintiff proved supervisor intentionally placed
employer’s check in plaintiff’s purse to make it appear she was a thief or put her in fear of criminal
charges took case beyond realm of ordinary employment dispute and into realm of outrageous
one); Osuagwu v. Gila Regional Medical Center, 938 F.Supp.2d 1180, 1196 (D.N.M. 2013)
(holding that plaintiff’s intentional infliction of emotional distress claim against defendant who
hired him could proceed to jury where there was evidence that defendant did not afford plaintiff
fair disciplinary procedures that could permanently affect plaintiff’s medical career where
defendant, among other things, took over prosecution of case and served as witness and
misrepresented facts and omitted critical facts in plaintiff’s favor, as well as included clearly false
statements in his reports to National Medical Database and New Mexico Medical Board); with
Trujillo, 2002-NMSC-004, ¶ 27 (concluding that termination of employee who had been cleared
to work part-time after medical testing did not support claim for intentional infliction of emotional
distress because employee was fired when employer found his work was no longer satisfactory).
C. Common law wrongful discharge
New Mexico recognizes a limited exception to the employment at-will rule in which a
discharged at-will employee may recover in tort “when his discharge contravenes a clear mandate
16
of public policy.” Chavez v. Manville Products Corp., 108 N.M. 643, 647, 777 P.2d 371, 375
(1989). To prevail on a retaliatory discharge claim, an employee must show that he was fired
“because he performed an act that public policy has authorized or would encourage, or because he
refused to do something required of him by his employer that public policy would condemn.”
Chavez, 108 N.M. at 647, 777 P.2d at 375 (quoting Vigil v. Arzola, 102 N.M. 682, 689, 699 P.2d
613, 620 (N.M. Ct. App. 1983)). The employee additionally must demonstrate that the employer
knew or suspected that the employee’s action involved a protected activity, Weidler v. Big J
Enterprises, Inc., 1998-NMCA-021, ¶ 23, 953 P.2d 1089 (1997), and that there was a causal
connection between his actions and the retaliatory discharge by the employer, Shovelin v. Central
New Mexico Elec. Coop., Inc., 115 N.M. 293, 303, 850 P.2d 996, 1006 (1993).
The linchpin of the retaliatory discharge tort “is whether by discharging the complaining
employee the employer violated a ‘clear mandate of public policy.’” Shovelin, 115 N.M. at 303,
850 P.2d at 1006 (quoting Vigil, 102 N.M. at 688, 699 P.2d at 619). “A clear mandate of public
policy sufficient to support a claim of retaliatory discharge may be gleaned from the enactments
of the legislature and the decisions of the courts” and may fall into one of the following categories:
(i) legislation defining public policy and providing a remedy for violation of that policy; (ii)
legislation providing protection of an employee without specifying a remedy; (iii) legislation
defining a public policy without specifying either a right or remedy, requiring judicial recognition
of both; and (iv) instances where there is no expression of public policy and the judiciary would
have to imply a right and remedy. Id. As for laws defining public policy and proving a remedy,
the New Mexico Supreme Court cited the New Mexico Human Rights Act as an example. Id. Not
every expression of public policy, even if set forth in a statute, will suffice to state a claim for
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retaliatory discharge. Id. The employee must identify a specific expression of public policy in order
to state a claim. See id. at 303-04, 850 P.2d at 1006-07.
Defendants argue, relying on Salazar v. Furr’s Inc., 629 F.Supp. 1403, 1408-09 (D.N.M.
1986), that where a remedy in tort is available to redress the firing, in this case the FMLA, common
law wrongful discharge is repetitive and not available. In Salazar, the court stated: “Where a
remedy other than [the wrongful discharge] tort is available to Plaintiff to redress the discharge,
the policy which underlies New Mexico's recognition of the tort, that of softening the terminable
at will rule, does not favor recognizing a cause of action.” Id. at 1408. The district court concluded
that “New Mexico courts would not extend the tort of wrongful discharge to a situation which fits
so neatly into the Title VII mold.” Id. at 1409. Although the court noted somewhat contrary dicta
in the New Mexico Court of Appeals Vigil case indicating that legislation that defines policy and
provides a remedy is one of the categories of identifiable public policy, the Salazar court refused
to rely on the Vigil dicta because of Vigil’s limitation of the scope of the tort and cases holding
that the tort is unavailable to union contract employees. See id.
Other federal district courts have followed similar reasoning and precluded wrongful
discharge claims when a plaintiff may seek redress for the wrong under a separate statute like the
FMLA. See, e.g., Depaula v. Easter Seals, El Mirador, No. 1:14-cv-00242-MCA-SCY, 2016 WL
6681182, *9 (D.N.M. Mar. 31, 2016). At least one other federal district court, however, has
disagreed with this interpretation of New Mexico law and refused to dismiss a plaintiff’s wrongful
discharge claim where the plaintiff alleged the defendant fired him because of his attempts to assert
his rights under the FMLA. Cordova v. New Mexico, 283 F.Supp.3d 1028, 1046-48 (D.N.M. 2017)
(J. Parker). None of these district court decisions is binding on this Court. The Court, however,
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agrees that the following reasoning of the Cordova decision accurately reflects the meaning of the
pertinent New Mexico Supreme Court precedent:
In Shovelin v. Central N.M. Elec. Coop., 1993-NMSC-015, ¶ 25, 115 N.M. 293,
850 P.2d 996, the New Mexico Supreme Court cited Vigil when it described one of
the categories of “clear mandate[s] of public policy sufficient to support a claim of
retaliatory discharge” as “legislation [that] define[s] public policy and provide[s] a
remedy for a violation of that policy.” The New Mexico Supreme Court later
specifically rejected the “argument that the tort of retaliatory discharge cannot be
founded on a declaration of public policy embodied in a legislative enactment that
provides its own remedial scheme.” Gandy v. Wal–Mart Stores, Inc., 1994-NMSC040, ¶¶ 10–12, 117 N.M. 441, 872 P.2d 859. While it agreed that the plaintiff could
not recover twice for the same harm, it noted that a tort claim might provide
different remedies than those available under the statutory scheme and that the
argument for preclusion contradicted both Vigil and Shovelin. Id. ¶¶ 8, 10. It
explained that judicial procedures could prevent a double recovery and held that a
violation of the New Mexico Human Rights Act (NMHRA) supports a claim for
discharge in violation of public policy despite the statutory remedy. Id. ¶ 12. In
Michaels v. Anglo American Auto Auctions, Inc., 1994-NMSC-015, ¶¶ 15–17, 117
N.M. 91, 869 P.2d 279, the Court similarly allowed a retaliatory discharge claim to
be based on violation of the Worker's Compensation Act.
Cordova, 283 F.Supp.3d at 1047-48.
Mr. Chaffin argues that he has pled that his termination violated the protections of the
NMHRA, ADA, and FMLA, and that none of these acts provide exclusive remedies. Accordingly,
he contends that he has stated a claim for wrongful discharge based on violations of public policies
set forth in those statutes. Defendants agree that the statutes contain non-exclusivity provisions,
but they assert that the wrongful discharge tort does not permit recovery when other remedies exist.
Defendants also contend that the only public policy set forth in Count III is Mr. Chaffin’s request
for FMLA, so a claim relying on another public policy mandate must be dismissed.
Based on Shovelin and Gandy, the Court agrees that Mr. Chaffin can state a claim for the
tort of wrongful discharge based on his termination for requesting FMLA leave. Cf. Gandy, 872
P.2d at 859 (holding that plaintiff may bring common-law tort action for retaliatory discharge
when she alleges she was discharged from her employment because she earlier sought relief against
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her employer under the NMHRA). As for the NMHRA and ADA, Mr. Chaffin’s complaint
insufficiently provided Defendants with notice that he was asserting a wrongful discharge claim
based on public policies set forth in those statutes. The Court, however, will permit him leave to
amend his complaint within 14 days of entry of the Memorandum Opinion and Order if he can do
so under Rule 11. Should Mr. Chaffin fail to file an amended complaint within 14 days of the entry
of this Memorandum Opinion and Order, the Court will limit Count III to the public policy set
forth in the FMLA only.
For the first time in their reply, Defendants set forth a separate argument that, if Mr. Chaffin
was not an at-will employee, then the tort of retaliatory discharge must fail. The Court need not
address issues raised for the first time in a reply. Nevertheless, there appears to be a question of
fact as to whether Mr. Chaffin was an at-will employee, and Plaintiffs may plead causes of action
in the alternative. See Boudar v. E.G. & G., Inc., 106 N.M. 279, 283, 742 P.2d 491, 495 (1987)
(“[W]e held that the tort of retaliatory discharge is unnecessary and inapplicable if an employee is
protected from wrongful discharge by an employment contract. Neither case, however, prevents a
complainant . . . from alleging and presenting evidence on a claim sounding in both tort and
contract.”).
Accordingly, the Court will not dismiss Plaintiffs’ wrongful discharge claim as a matter of
law as to Defendants BHPB MMCo, NMC, and Waggoner. For the reasons given supra, Plaintiffs
have not alleged enough facts specific to Defendant Halgryn to state a plausible wrongful discharge
claim against him. The Court, however, will give Plaintiffs an opportunity to amend their
complaint. Should Plaintiffs fail to file an amended complaint within 14 days of the entry of this
Memorandum Opinion and Order, the Court will dismiss Count III against Defendant Halgryn.
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IT IS THEREFORE ORDERED that Defendants’ Motion to Dismiss for Failure to State
a Claim (ECF No. 14) is GRANTED IN PART and DENIED IN PART as follows.
1. Defendants’ request to dismiss Mr. Chaffin’s claim of common-law wrongful
discharge (Count III) is DENIED as to BHPB MMCo, NMC, and Waggoner based
on the policies of the FMLA. Plaintiffs may amend their complaint to add allegations
regarding a theory of liability based on policies in the NMHRA and ADA within 14
days. Failure to do so within 14 days will result in dismissal of any wrongful
discharge claim based on the NMHRA and ADA.
2. Defendants’ request to dismiss Plaintiffs’ intentional infliction of emotional distress
claim (Count IV) is DENIED as to BHPB MMCo, NMC, and Waggoner.
3. Defendants’ request to dismiss Plaintiffs’ interference with contract and prospective
economic advantage claim (Count V) is GRANTED to the extent it is based on
tortious interference with Plaintiffs’ health insurance contract, but is DENIED to the
extent it is based on tortious interference with Mr. Chaffin’s prospective employment
contract or economic relations with the successor company as to BHPB MMCo,
NMC, and Waggoner. Plaintiffs may amend their complaint within 14 days to add
factual allegations relating to their claim for tortious interference with their
employment contract with the BHP Group entities. Failure to do so within 14 days
will result in dismissal of that theory of liability.
4. Plaintiffs may amend their complaint to add factual allegations regarding Defendant
Halgryn as to Counts III, IV, and V. Failure to do so within 14 days will result in
dismissal of those enumerated claims against Defendant Halgryn.
__________________________________________
SENIOR UNITED STATES DISTRICT JUDGE
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