Batson v. Shiflett

Citation602 A.2d 1191,325 Md. 684
Decision Date01 September 1991
Docket NumberNo. 42,42
PartiesArthur E. BATSON, Jr. et al. v. A. Spencer SHIFLETT, Jr
CourtCourt of Appeals of Maryland

Peter F. Axelrad (Leonard E. Cohen, Robert B. Levin, William L. Reynolds, Frank, Bernstein, Conaway & Goldman, Baltimore, Michael Brodie, Philadelphia, Pa., Allison Beck, Gen. Counsel, Mark Schneider, Asst. Gen. Counsel for Intern. Ass'n of Machinists & Aerospace Workers, Washington, D.C., all on brief), for petitioners.

Harriet E. Cooperman and Steven R. Freeman (Herbert J. Belgrad, Kenneth P. Niman, Amy J. Seifert, Kaplan, Heyman, Greenberg, Engelman & Belgrad, P.A., all on brief), Baltimore, for respondent.

Argued before MURPHY, C.J., and ELDRIDGE, RODOWSKY, McAULIFFE, CHASANOW, KARWACKI and ROBERT M. BELL, JJ.

KARWACKI, Judge.

In Batson v. Shiflett, 86 Md.App. 340, 586 A.2d 792 (1991), the Court of Special Appeals affirmed a judgment entered on a jury verdict in the Circuit Court for Baltimore County awarding compensatory and punitive damages against petitioners, Industrial Union of Marine and Shipbuilding Workers of America, IAM, District Lodge 4 (National Union) and Arthur E. Batson, Jr., its President, in favor of respondent, A. Spencer Shiflett, Jr., former President of Local 33, an affiliate of the National Union. The jury credited Shiflett's allegations that he was defamed in leaflets disseminated and speeches made by Batson and subjected to intentional infliction of emotional distress by the National Union and Batson in the course of a heated labor dispute. We granted certiorari to consider the following issues:

--whether the decision below violated principles of issue preclusion and of federal labor law preemption.

--whether the evidence demonstrated that the allegedly defamatory statements at issue were substantially true, or, even if they were not, whether there was clear and convincing evidence that the statements were made with actual (constitutional) malice.

--whether the jury was properly instructed as to the element of malice in the defamation action.

--whether the holding that petitioners' conduct was sufficiently "extreme and outrageous" to permit recovery for intentional infliction of emotional distress conflicts with Maryland law, federal labor law, or the First Amendment.

I.

Shiflett began his employment at the Sparrows Point shipyard of the Bethlehem Steel Corporation, (Bethlehem) in 1967, and shortly thereafter became a member of Local 33. After serving in a variety of local union offices, Shiflett was elected President of Local 33 in 1980, and was re-elected in 1983. The facts underlying this appeal stem from a dispute that arose in 1984, while Shiflett was president of Local 33. The National Union and Local 33 together maintained a collective bargaining agreement covering Bethlehem's shipyard at Sparrows Point. That agreement was due to expire on August 19, 1984.

In March of 1984, Local 33 and Bethlehem executed a new long-term agreement which substantially reduced wages and benefits at the Sparrows Point shipyard. The National Union denied having any knowledge of the negotiations and denied authorizing Local 33 to negotiate the agreement. 1 Batson and the National Union's General Executive Board immediately repudiated the new agreement 2 and threatened to place Local 33 in trusteeship, which would have resulted in Shiflett's ouster as President. Bethlehem and Local 33 claimed that Batson and the National Union had authorized Local 33 to negotiate the agreement without involving the National Union. Consequently, an intense legal battle erupted.

As a result of the National Union's attempts to nullify the agreement, Local 33 and Bethlehem filed identical unfair labor practice charges against the National Union with the National Labor Relations Board (NLRB). Local 33 and Bethlehem alleged that the National Union's repudiation of the new agreement constituted the unfair labor practice of a "refusal to bargain" in violation of § 8(b)(3) of the National Labor Relations Act of 1935 (NLRA), 29 U.S.C. §§ 151-169 (1988). Local 33 also charged that the National Union violated § 8(b)(1)(A) of the NLRA by filing internal union charges against officials of Local 33, including Shiflett, in order to remove them from office. A lengthy evidentiary hearing was held before NLRB Administrative Law Judge David Evans. The crucial contested fact in that proceeding was whether, as alleged, Batson and the National Union had authorized Shiflett and his fellow officers of Local 33 to negotiate and execute the new collective bargaining agreement without the National Union's involvement.

Judge Evans dismissed the charges, resolving the dispute in favor of the National Union and Batson, and ruled that the collective bargaining agreement executed by Bethlehem and Local 33 in March of 1984 was null and void. He discredited portions of Shiflett's testimony, including his statement that Batson had authorized the new contract. The NLRB affirmed Judge Evans in a published opinion. Marine & Shipbuilding Workers, 277 NLRB No. 191, 121 L.R.R.M. (BNA) 1146 (NLRB January 10, 1986). While the NLRB found no basis to reverse any of Judge Evans's credibility findings, it disavowed any reliance on several specific credibility findings, none of which involved Shiflett's testimony. Bethlehem later agreed to pay $280,000 to union members and the National Union for compensation lost while the voided agreement was in force.

Following Judge Evans's ruling, both Shiflett and Batson began distributing handbills to the Local 33 membership, each attacking his critics. Batson published a total of six flyers; at issue here are two of those leaflets, Flyer No. 3 and Flyer No. 5.

Flyer No. 3 alleged that through their leaflets, Shiflett and his supporters were trying "to steer your attention away from their crimes of conspiracy, perjury, falsification of records, illegal contract ratification and violation of both the National [Union's] Constitution and By-Laws of your Union." The National Union and Batson describe this flyer as a report of the disposition of the case decided by Judge Evans and claim that the accusations were justified by the decision.

About this same time, a separate dispute arose concerning Local 33's financial affairs. The National Union, after an examination of the Local's records performed by National Union Vice President/Secretary-Treasurer Robert Pemberton, accused Shiflett and his fellow Local 33 officer, James Harmon, of misuse of Local 33's petty cash, receiving reimbursement for the same expenses twice, personal use of Local 33 monies, and misappropriating food donation funds. Shiflett issued a flyer stating that he could answer the charges but that it would be "a total waste of time." Batson responded with Flyer No. 5, which challenged Shiflett:

"[W]e think that you ought to answer these specific charges because all of the checks paid to Harmon were signed by you. If Harmon is guilty of misuse of the locals [sic] funds then you may be too. A point of interest is that we have just started checking Alvin Shiflett's gas receipts and have already found Mrs. Shiflett charging gas to the local."

Batson allegedly reviewed the relevant materials and relied on Pemberton's examination of the Local's financial records in concluding that Harmon and Shiflett had engaged in financial improprieties.

At the National Union's convention held in October of 1984, before Judge Evans's decision was filed, Batson announced to the delegates that he would "nail" Shiflett for negotiating the agreement with Bethlehem without authorization.

According to Shiflett, the National Union conducted several heavily attended meetings of the Local 33 membership in December, 1984 and January, 1985, at which Batson repeated the allegations of financial improprieties in Flyer No. 5, called Shiflett a "crook," and accused him of lying and committing perjury. Batson and Pemberton also met with Bethlehem management officials on December 4, 1984, and told them that Shiflett would be removed from office immediately for embezzlement and misappropriation of Local 33 funds. Shiflett claims that Batson's allegations quickly spread throughout the shipyard, causing many Local 33 members to believe that Shiflett was a crook and a thief, and that he had been found guilty of the crimes alleged in Flyer No. 3.

In June of 1985, the National Union and Batson called a special election of all Local 33 officers because of the alleged financial improprieties of Local 33's Executive Secretary, James Harmon. Shiflett ran for re-election but lost. Shiflett claims that his fellow workers refused to accept his campaign literature, calling him a "crook" and a "thief." He attributes his defeat to the election being held in the midst of the proliferation of false accusations against him by Batson and the National Union.

On August 1, 1985, Shiflett filed this action against the National Union, Batson and Pemberton 3 alleging defamation, intentional infliction of emotional distress, and conspiracy. Shiflett alleged that both prior and subsequent to Administrative Law Judge Evans's decision, Batson and the National Union engaged in a campaign to remove him from office. The case was tried before a jury for ten days. Prior to submission of the case to the jury, the court granted judgment in favor of Batson and National Union on the conspiracy count and on two of the defamation counts. Six defamation counts 4 and the intentional infliction of emotional distress count were submitted to the jury.

Shiflett offered evidence that the allegedly false accusations of the National Union and Batson caused him to become extremely upset and nervous; he was unable to sleep, and his appearance became disheveled. Shiflett testified that he found it extremely difficult to work and, at times, when he was driving to work he would turn his car around and return home. He drank heavily, took drugs and eventually...

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