Toler v. Süd-Chemie, Inc.

• Citation: 458 S.W.3d 276
• Decision Date: 18 December 2014
• Docket Number: 2013–SC–000007–DG,2013–SC–000002–DG
• Parties: Joseph E. Toler, Appellant v. Süd–Chemie, Inc. ; Jude Ware; Don Votaw; Glenn Shull; and Mike Watson, Appellees and Süd–Chemie, Inc., Appellant v. Joseph E. Toler, Appellee
• Court: United States State Supreme Court (Kentucky)

458 S.W.3d 276

Joseph E. Toler, Appellant
v.
Süd–Chemie, Inc. ;

Jude Ware;

Don Votaw;

Glenn Shull;

and Mike Watson, Appellees
and
Süd–Chemie, Inc., Appellant
v.
Joseph E. Toler, Appellee

2013–SC–000002–DG
2013–SC–000007–DG

Supreme Court of Kentucky.

RENDERED: DECEMBER 18, 2014
CORRECTED: APRIL 7, 2015
Rehearing Denied May 14, 2015

COUNSEL FOR JOSEPH E. TOLER: Philip Clyde Kimball, Louisville

COUNSEL FOR SÜd–CHEMIE, INC.: Oliver Barrett Rutherford, James U. Smith III, Smith & Smith Attorneys, Louisville

458 S.W.3d 280

COUNSEL FOR JUDE WARE, DON VOTAW, GLENN SHULL, AND MIKE WATSON: Robert Matthew Colone, Louisville

Opinion

OPINION OF THE COURT BY CHIEF JUSTICE MINTON

Süd–Chemie discharged Joseph E. Toler, a veteran managerial employee, after coworkers reported he made racist comments in the workplace. Toler then sued Süd–Chemie and the coworkers for defamation. After Toler presented his evidence at trial, the trial court directed a verdict for Süd–Chemie and one of the coworkers, citing a qualified privilege to defamation. As for Toler's claims against the remaining coworkers, the jury ultimately returned a verdict in the coworkers' favor because either the statements made about Toler were true or they were not made with malice.

Toler appealed the resulting judgment, alleging the trial court erred by granting the directed verdict and by instructing the jury improperly. The Court of Appeals affirmed the jury's verdict, finding no error in the jury instructions, but reversed the directed verdict. Despite acknowledging that Süd–Chemie was entitled to the protection of a qualified privilege, the Court of Appeals, in essence, held that a plaintiff is only required to present a prima facie defamation case to overcome the qualified privilege and survive a motion for directed verdict.

Both sides petitioned for discretionary review of the opinion of the Court of Appeals, which we granted in order to clarify how the qualified privilege applies under our defamation law. We now reverse the opinion of the Court of Appeals, in part, and affirm it, in part. In reversing, we hold that a plaintiff in a defamation action opposing a directed-verdict motion made by a defendant claiming a qualified privilege must produce some evidence of the defendant's actual malice to survive a directed verdict. In affirming, we hold that the present jury instructions, while perhaps deficient, sufficiently framed for the jury's factual determination the law applicable to the case; and the jury's verdict is sound.

I. FACTUAL AND PROCEDURAL BACKGROUND.

Süd–Chemie¹ manufactures catalysts used in various chemical operations. Toler began working for the company—then operating under a different name—in 1976 at its southern Louisville plant, one of two it operates in the area. After nearly 25 years of employment with the Company, Toler was promoted to a supervisorial role, managing the plant's night shift from 6:30 p.m. to 3:30 a.m. By all accounts, Toler excelled at his role in management until the incidents that are the subject of this litigation.

The Company's human resources director, Scott Hinrichs, received reports from some employees² regarding Toler's

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use of racist language in the workplace. Perhaps highlighting the obvious, Toler's statements were rather offensive. And Hinrichs was duty-bound under Company policy to investigate any reports of racist language because the Company had a zero-tolerance standard concerning the use of such language in the workplace.³ Accordingly, Hinrichs reviewed the written reports submitted by the employees and then sat down with each employee to discuss the allegations.

During this investigation, the employees all acknowledged and affirmed the written statement submitted to Hinrichs. Going further, the employees were unequivocal in confirming Toler had indeed uttered the offensive statements. Hinrichs, along with the Company's plant manager, then met with Toler to receive his side of the story. At the meeting, Toler was provided with the names of the employees as well as the nature of the accusations levied against him. By Toler's account, he was not provided with the employees' actual written statements until the pretrial discovery process. Toler denied making such statements in the workplace⁴ and, in an attempt to explain the employees' motive, alleged he was the target of a “union gang-up” as a result of his disagreement with another employee named Allen Trice.

The disagreement with Trice, an African–American⁵ employee working under Toler, stemmed from an incident in which Trice allegedly failed to follow Toler's instruction. As a result, Toler, acting within the Company's protocol, sent Trice home. In the end, the Company terminated Trice's employment. A short time after Trice's termination, Trice filed a racial-discrimination claim with the Equal Employment Opportunity Commission. As it happens, the Company learned of Trice's EEOC complaint the day after it received the employees' written statements about Toler.⁶ Members of the local workers' union, according to Toler, became upset with him over his handling of Trice. For each of the complaining employees, Toler provided an account of a disagreement that, in his view, essentially prompted a vendetta aimed at ousting him as a supervisor. The Company terminated Toler's employment the day after his meeting with Hinrichs and the Company's plant manager. Toler then filed the present case, arguing the employees had fabricated the allegations resulting in his termination and, as a result, had defamed him.

II. ANALYSIS.

An outline of defamation law, especially the role of qualified privilege, is useful in providing context for our holding. The requisite elements for a defamation⁷

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claim are: “(a) a false and defamatory statement concerning another; (b) an unprivileged publication ^[ [^{8 ]} 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 publication.”⁹ As we have repeatedly stated, “words are said to be actionable per se when there is a conclusive presumption of both malice and damage.”¹⁰ One example of this per se classification is a communication involving false allegations of unfitness to perform a job, such as here. If a communication can be labeled per se defamatory, “recovery is permitted without proof of special damages because injury to reputation is presumed and the words are actionable on their face.”¹¹

In certain circumstances, however, otherwise defamatory-per-se communications are allowed because the societal interest in the unrestricted flow of communication is greater than the private interest.¹² Specifically, we have recognized a privilege for individuals communicating “where the communication is one in which the party has an interest and it is made to another having a corresponding interest.”

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¹³ Our case law has routinely applied this common-interest application of a qualified privilege to the employment context.¹⁴ There is no dispute here that the Company and the employees operate under our recognized qualified privilege; but more than that, there can be no dispute because our law is clear.¹⁵

What, then, is the impact of the qualified privilege on a plaintiff's claim of defamation per se? With defamation's confusing jargon, we have spilled much ink attempting to gain a clearer understanding of the qualified privilege and its role, seemingly to no avail. Ordinarily, because the law does not presume an individual's misconduct, the falsity of defamatory statements is presumed.¹⁶ In addition, malice is presumed in the defamatory-per-se context. The qualified privilege, however, negates this presumption. The result: “false and defamatory statements will not give rise to a cause of action unless maliciously uttered”¹⁷ ; or, perhaps better stated, despite the law's presumption of malice “where publications are [defamatory] per se, yet where the publication is made under circumstance disclosing qualified privileges, it is relieved of that presumption and the burden is on the plaintiff to prove actual malice.”¹⁸

The qualified privilege is just that: qualified. Not an absolute defense, the privilege's protection can be lost through unreasonable actions amounting to abuse. Indeed, the party asserting a qualified privilege may still be responsible for falsehoods if both actual malice and falsity are affirmatively shown.¹⁹ The qualified privilege operates to allow defendants the necessary latitude to communicate freely while maintaining accountability when the defendant operates outside of or contrary to the privilege. In this context, accordingly, actual malice refers to “malice in fact”—read: malevolence or ill will.²⁰ A defendant who enjoys the qualified

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privilege may make defamatory statements, “unless maliciously uttered.”²¹ Our case law and the relevant treatises—by focusing on the utterance of the defamatory statement rather...