656 F.2d 323 (8th Cir. 1981), 80-1765, Rimmer v. Colt Industries Operating Corp.

Docket Nº:80-1765.
Citation:656 F.2d 323
Party Name:Jerry N. RIMMER, Appellant, v. COLT INDUSTRIES OPERATING CORPORATION, Appellee.
Case Date:August 11, 1981
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit
 
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656 F.2d 323 (8th Cir. 1981)

Jerry N. RIMMER, Appellant,

v.

COLT INDUSTRIES OPERATING CORPORATION, Appellee.

No. 80-1765.

United States Court of Appeals, Eighth Circuit

August 11, 1981

Submitted May 19, 1981.

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Paden, Welch, Martin, Albano & Graeff, P. C., Michael W. Manners, argued, Independence, Mo., for appellant.

Charles W. German, argued, Paul E. Donnelly, Lawrence A. Rouse, Kansas City, Mo., for appellee.

Michael D. Gordon, Marsha J. Murphy, Jolley, Moran, Walsh, Hager & Gordon, Kansas City, Mo., Clyde E. Craig, Wiley, Craig, Armbruster, Wilburn & Mills, St. Louis, Mo., for United Labor Committee of Missouri.

Before HEANEY, BRIGHT and ROSS, Circuit Judges.

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HEANEY, Circuit Judge.

We are asked to decide whether the Missouri service letter statute 1 violates the First and Fourteenth Amendments to the United States Constitution. The Missouri Supreme Court has very recently sustained the statute against a similar challenge. 2 The United States District Court for the Western District of Missouri ruled that the statute is unconstitutional. 3 Rimmer v. Colt Indus. Op. Corp., 495 F.Supp. 1217 (W.D.Mo.1980). We agree with the Supreme Court of Missouri and reverse the judgment of the district court.

I

Jerry Rimmer, a Missouri resident, was formerly employed as a district sales manager by the Holley Carburetor Division of Colt Industries Operating Corporation. Colt is a Delaware corporation doing business in Missouri; its principal place of business is New York. Rimmer began working for the Holley Carburetor Division of Colt in May, 1976. On October 2, 1977 he was orally notified that his employment would be terminated effective October 31, 1977. He was given no reason for the discharge.

On October 11, 1977, Rimmer's attorney sent a letter to a Vice President of the Holley Division. That letter requested that Rimmer be retained in his position and that Holley promptly furnish Rimmer with a letter signed by a superintendent or manager in charge setting forth the nature and character of the service rendered by Rimmer, the length of time for which Rimmer had worked at the Holley Division, and a true statement of the reason Holley might have for the discharge.

On January 23, 1978, Rimmer personally wrote to Holley and essentially reiterated the earlier request of his attorney. Receiving no reply to either letter, Rimmer filed suit against Colt in the Circuit Court of Jackson County, Missouri, on February 3, 1978, alleging a violation of the Missouri service letter statute. Colt removed the case to federal district court on April 3, 1978, and four days later responded to Rimmer's service letter request.

Colt's service letter stated that Rimmer's poor job performance was the true reason for his termination. The letter was quite explicit in detailing alleged deficiencies in Rimmer's work. The letter also noted that Rimmer had been offered two other positions with Holley but had not shown an interest in either because they necessitated his relocation.

Rimmer's amended complaint alleged that Colt's failure to respond to Rimmer's request within a reasonable time violated the statute, and that when Colt did respond, the reasons stated in the letter were not the true reasons for his discharge. Rimmer alleged that he was discharged because he would not accept a job transfer to Michigan when Colt had requested him to. He prayed for actual and punitive damages of $1,060,000.

Colt's answer denied Rimmer's allegations and interposed the affirmative defense that the service letter statute was unconstitutional. Thereafter, Colt filed a motion for judgment on the pleadings pursuant to Rule 12(c) of the Federal Rules of Civil Procedure. The district court granted Colt's motion, finding the service letter

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statute to be violative of the "free speech" provision of the First Amendment, and the Equal Protection and Due Process Clauses of the Fourteenth Amendment. Since the district court dismissed Rimmer's case on the pleadings, we must assume that all of the well pleaded factual allegations in Rimmer's amended complaint are true, and all contravening assertions in Colt's answer are assumed to be false. See e. g., Quality Mercury, Inc. v. Ford Motor Co., 542 F.2d 466, 468 (8th Cir. 1976), cert. denied, 433 U.S. 914, 97 S.Ct. 2986, 53 L.Ed.2d 1100 (1977). Accordingly, for the purpose of our review we assume as undisputably true: (1) the reasons for discharge stated in Colt's letter are false; and (2) Colt knew when it issued the letter that they were false it intentionally, wantonly and maliciously issued a false service letter.

II

The district court found that the service letter statute permits the recovery of damages against an employer without proof of fault, and that it permits the recovery of punitive damages without a showing of actual malice. It reasoned that since corporations have the same "free speech" rights as individuals, the First Amendment protects the private expressions of a corporation from state infringement. It further reasoned that the service letter statute must be judged by the standard established in Gertz v. Robert Welch, Inc., 418 U.S. 323, 94 S.Ct. 2997, 41 L.Ed.2d 789 (1974). It interpreted Gertz as holding that (1) states may not impose liability for defamation without a showing of fault, 418 U.S. at 347, 94 S.Ct. at 3010, and (2) punitive damages cannot be recovered in such an action unless liability is "based on a showing of knowledge of falsity or reckless disregard for the truth." Id. at 349, 94 S.Ct. at 3011. Having construed the statute in the manner set forth above, the district court concluded that the Missouri service letter statute could not withstand the scrutiny of Gertz. There was no occasion for the district court to determine in this case that the service letter statute is to be interpreted in the manner it sets out. For as we have already indicated, it was obligated to assume that the reasons stated in the letter for the discharge were false, that Colt knew they were false, and nonetheless wantonly and maliciously issued the letter. Given these assumptions, we have no hesitancy holding that the service letter statute can be constitutionally applied to Colt. We do not decide the issue whether the service letter statute would be constitutional if it imposed liability without fault or permitted the recovery of punitive damages without a showing of actual malice. We can decide that question when it is properly before us. Moreover, we do not necessarily agree with the district court's view that the Missouri Supreme Court has decided these issues in the way the district court determined it has. We read Potter v. Milbank Mfg. Co., 489 S.W.2d 197 (Mo.1972) and Roberts v. Emerson Electric Mfg. Co., 338 S.W.2d 62 (Mo.1960) more narrowly than the district court, particularly in light of the recent Missouri Court of Appeals decision in Newman v. Greater Kansas City Baptist Hosp. Ass'n, 604 S.W.2d 619 (Mo.App.1980). See also Beggs v. Universal C.I.T. Credit Corp., 409 S.W.2d 719 (Mo.1966); Howe v. St. Louis Union Trust Co., 392 S.W.2d 625 (Mo.1965); Williams v. Kansas City Transit, Inc., 339 S.W.2d 792 (Mo.1960); Holcroft v. Missouri-Kansas-Texas R. Co., 607 S.W.2d 158 (Mo.App.1980); Terranova v. Western Auto, 589 S.W.2d 362 (Mo.App.1979). We turn then to the much simpler questions that are properly before us.

A

Gertz v. Robert Welch, Inc., supra, poses no problem concerning the constitutionality of the service letter statute as applied in this case. Gertz permits states to impose liability for defamation upon a showing of fault, and it also permits the recovery of punitive damages with a showing of actual malice. 4

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Appellee's contention that the statute is unconstitutional because it permits the recovery of nominal damages without proof of actual...

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