Aft Mich. v. Project Veritas

• Citation: 397 F.Supp.3d 981
• Decision Date: 14 June 2019
• Docket Number: Civil Case No. 17-13292
• Parties: AFT MICHIGAN, Plaintiff, v. PROJECT VERITAS, and Marisa L. Jorge, Defendants.
• Court: U.S. District Court — Eastern District of Michigan

397 F.Supp.3d 981

AFT MICHIGAN, Plaintiff,

v.PROJECT VERITAS, and Marisa L. Jorge, Defendants.

Civil Case No. 17-13292

United States District Court, E.D. Michigan, Southern Division.

Signed June 14, 2019

Mark H. Cousens, Mark H. Cousens Assoc., Southfield, MI, for Plaintiff.

Stephen R. Klein, Statecraft PLLC, Washington, DC, Paul M. Mersino, Butzel Long, Detroit, MI, for Defendants.

AMENDED¹ OPINION AND ORDER (1) GRANTING, IN PART, AND DENYING, IN PART, DEFENDANTS' MOTION TO DISMISS (ECF NO. 74), AND (2) GRANTING, IN PART, AND DENYING, IN PART DEFENDANTS' EMERGENCY MOTION REQUESTING AUTHORIZATION FOR AN INTERLOCUTORY APPEAL (ECF NO. 95)

LINDA V. PARKER, U.S. DISTRICT JUDGE

This action involves allegations of political espionage and an important, unresolved question of Michigan law concerning the protections afforded participants in a private conversation under the Michigan Eavesdropping statute ( Mich. Comp. Laws § 750.539a et seq. ). Plaintiff AFT Michigan ("AFT Michigan" or "AFT") seeks injunctive relief, compensatory damages, and punitive damages against Defendants Project Veritas and Marisa L. Jorge (respectively, "PV" and "Jorge") for their alleged acts of fraud, trespass, eavesdropping, misappropriation of trade secrets, and other violations of Michigan law. (See Sec. Am. Compl., ECF No. 72, PageID 2034.) Presently before the Court is Defendants' Motion to Dismiss Plaintiff's Second Amended Complaint pursuant to Federal Rule of Procedure 12(b)(6), Mot. Dismiss, ECF No. 74, PageID 2071, and Defendants' Emergency Motion Requesting Authorization for an Interlocutory Appeal, ECF No. 95. The matters being fully briefed, (ECF Nos. 74, 77, 80, 95, 98 & 99), the Court is dispensing with oral arguments pursuant to Local Rule 7.1(f)(2).

I. Background

Plaintiff, the Michigan affiliate of the American Federation of Teachers, is a labor organization that, along with its affiliates, represents more than 35,000 public school employees. (See Sec. Am. Compl. ¶ 1, ECF No. 72 at 2, PageID 2036.) AFT Michigan alleges that Defendant Project Veritas implanted Defendant Jorge in its organization to covertly record its staff members' conversations, distort and manipulate them, then release them to the public for the purpose of disparaging AFT. (See id. at 2–3.)

AFT Michigan alleges that Defendant Jorge sought an internship with AFT, see id. at 4, and at the outset, Jorge misrepresented herself as, Marisa Perez, a student at the University of Michigan with the desire to teach in public schools. (See id. at 5.) AFT accepted Jorge and assigned her to projects related to her expressed interest in charter schools. (See id. ) Over the course of three months, however, Jorge regularly sought information beyond her assignment: seeking "detailed information regarding grievances relating to employee discipline", attending "bargaining sessions", accessing without permission Plaintiff's staff members' offices, computers, files, and records, and accessing without authorization Plaintiff's private and confidential databases, documents, and information. (Id. at 5–6, 8–9, 13.)

Furthermore, AFT alleges that Jorge "employed a hidden camera [in a private office] to covertly record a private conversation with an AFT Michigan staff representative" during which they discussed the resolution of a matter related to teacher discipline with the goal of teaching Jorge how staff members provide assistance in those matters. (Sec. Am. Comp. ¶¶ 28–29, 32, ECF No. 72 at 7, PageID 2041.) Defendant Project Veritas later published portions of the recorded conversation (along with some of AFT's confidential documents) on YouTube, editing the conversation allegedly to provide a false narrative as to AFT's staff member's role for the specific purpose of disparaging AFT Michigan. (See id. at 7–8.) Finally, Plaintiff's staff members noticed Jorge carrying her cellular phone wherever she went and believed she recorded AFT staff members' conversations and AFT's meetings without permission. (See id. at 11, 13, 17; see also Dobbie Aff. ¶ 10, ECF No. 1-1 at 3, PageID 38.)

AFT Michigan initiated this lawsuit, believing Defendants to be in possession of its proprietary and confidential information, in the Third Circuit Court for the County of Wayne, Michigan (Case No. 17-014348-CZ). (See Not. Removal, ECF No. 1, PageID 1.) Defendants removed the lawsuit to the Eastern District of Michigan based upon diversity jurisdiction. (See id. ) Presently before the Court is Defendants' Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), Mot. Dismiss, ECF No. 74, PageID 2071, and Defendants' Emergency Motion Requesting Authorization for an Interlocutory Appeal, ECF No. 95. The matters being fully briefed, (ECF Nos. 74, 77, 80, 95, 98 & 99), the Court is dispensing with oral arguments pursuant to Local Rule 7.1(f)(2).

Defendants' Motion to Dismiss does little to refute the alleged conduct against them but repudiates Plaintiff's claims as "no more than conclusory labels". (Mot. Dismiss 1, ECF No. 74 at 1, PageID 2083.)

II. Michigan's Eavesdropping Statute

Defendants contend that they are not liable under Michigan's eavesdropping statute because Jorge was a participant to the private conversations she allegedly recorded. Defendants note that two past Michigan Court of Appeals decisions— Sullivan v. Gray , 117 Mich. App. 476, 324 N.W.2d 58 (1982) (2-1 decision) (per curiam) and Lewis v. LeGrow , 258 Mich. App. 175, 670 N.W.2d 675, 683–84 (2003) (citing Sullivan 's holding that "a participant in a private conversation may record it without ‘eavesdropping’ " but also noting "that eavesdropping is not at issue in this case.")—provide some support to their claim that a participant in a private conversation who records it absent the consent of all other participants is not liable under Michigan's eavesdropping statute ( Mich. Comp. Laws § 750.539a et seq. ).

Given that the Court's subject matter jurisdiction over this action is based on diversity, see 28 U.S.C. 1332(a)(1), the Court must apply Michigan law as determined by the Michigan Supreme Court. See Erie R.R. Co. v. Tompkins , 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938) ("[T]he law of the state shall be declared by its Legislature in a statute or by its highest court in a decision"). That court, however, has not specifically addressed the question presented here² . Accordingly, the Court "must predict how the [Michigan Supreme Court] would rule by looking to all the available data." Stryker Corp. v. XL Ins. Am. , 735 F.3d 349, 360 (6th Cir. 2012) (quoting Allstate Ins. Co. v. Thrifty Rent-A-Car Sys., Inc. , 249 F.3d 450, 454 (6th Cir. 2001) ) (emphasis added). The court may be guided by analogous decisions or dicta of the Michigan Supreme Court, decisions and dicta of other Michigan courts, restatements of law, law commentaries, and decisions from other jurisdictions. See, e.g. , Bailey v. V & O Press Co., Inc. , 770 F.2d 601, 604 (6th Cir. 1985). In the absence of a decision by Michigan's Supreme Court, the Michigan Court of Appeals decisions, although the starting point, are not controlling and may be disregarded by the Court if convinced that the Michigan Supreme Court would decide otherwise. See Grantham & Mann, Inc. v. Am. Safety Prod., Inc. , 831 F.2d 596, 608–09 (6th Cir. 1987) (citations omitted); see also West v. AT & T , 311 U.S. 223, 237, 61 S.Ct. 179, 85 L.Ed. 139 (1940) (holding federal courts may disregard state appellate court decisions if convinced highest state court would decide otherwise). Therefore, Sullivan and Lewis , although instructive, are neither binding on the Court nor dispositive of the issue presented here.

A.

Michigan Comp. Laws ("MCL") § 750.539c provides:

Any person who is present or who is not present during a private conversation and who willfully uses any device to eavesdrop upon the conversation without the consent of all parties thereto, or who knowingly aids, employs or procures another person to do the same in violation of this section, is guilty of a felony punishable by imprisonment in a state prison for not more than 2 years or by a fine of not more than $2,000.00, or both.

MCL § 750.539a(2) defines "eavesdropping" as meaning "to overhear, record, amplify or transmit any part of the private discourse of others without the permission of all persons engaged in the discourse."

The only three instances in which the Michigan Supreme Court has addressed the application of Michigan's eavesdropping statute— Dickerson v. Raphael , 461 Mich. 851, 601 N.W.2d 108 (1999) (unpublished table decision); People v. Stone , 463 Mich. 558, 563, 621 N.W.2d 702 (2001) ; Bowens v. Ary, Inc. , 489 Mich. 851, 794 N.W.2d 842, 843 (2011) (memorandum)—merely reinforce that the statutory prohibition against eavesdropping extends to "private conversations" in which "a person reasonably expects to be free from casual or hostile intrusion or surveillance."³ Significantly, only one of the cases— Stone —is a published decision with any precedential value. Still, none have construed the portions of the statute that the Michigan Court of Appeals held as removing participants in a private conversation from the ambit of the statute's eavesdropping prohibitions. Each, in applying the statute to the particular circumstances of its case, focused exclusively on the factual issue of whether the conversation had an expectation of privacy. See Dickerson , 601 N.W.2d at 108 ; Stone , 621 N.W.2d at 704–06 ; Bowens , 794 N.W.2d at 843–44. With this foundation, the Court considers how the Michigan Supreme Court would construe the eavesdropping statute.

When interpreting a statute, the Michigan Supreme Court's primary goal is to give effect to the Michigan's Legislature's intent, which is primarily ascertained through the statute's plain language. See Stone , 621 N.W.2d at 704 (citing People v. Morey , 461 Mich. 325, 330, 603 N.W.2d 250 (1999) ). "When that language is unambiguous, no further judicial construction is required...