Chonich v. Wayne County Community College

• Decision Date: 12 May 1989
• Docket Number: 87-1632,Nos. 87-1595,s. 87-1595
• Citation: 874 F.2d 359
• Parties: 49 Fair Empl.Prac.Cas. 1307, 50 Empl. Prac. Dec. P 38,996, 53 Ed. Law Rep. 805, 4 Indiv.Empl.Rts.Cas. 1303 Milan CHONICH and Carmen Pascaretti, Plaintiffs-Appellees, Cross-Appellants, v. WAYNE COUNTY COMMUNITY COLLEGE, Defendant-Appellant, Cross-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 359

874 F.2d 359

49 Fair Empl.Prac.Cas. 1307,

50 Empl. Prac. Dec. P 38,996, 53 Ed. Law Rep. 805,

4 Indiv.Empl.Rts.Cas. 1303

Milan CHONICH and Carmen Pascaretti, Plaintiffs-Appellees Cross-Appellants, v. WAYNE COUNTY COMMUNITY COLLEGE, Defendant-Appellant, Cross-Appellee.

Nos. 87-1595, 87-1632.

United States Court of Appeals Sixth Circuit.

Argued July 22, 1988.

Decided May 12, 1989.

Kirk, McCargo & Arbulu Samuel E. McCargo (argued), Detroit, Mich., for defendant-appellant, cross-appellee.

Sue E. Radulovich (argued), Detroit, Mich., for plaintiffs-appellees, cross-appellants.

Before MARTIN and WELLFORD, Circuit Judges; and JARVIS ^*, District Judge.

WELLFORD, Circuit Judge.

This dispute concerns an employment discrimination action under 42 U.S.C. Sec. 1983 and Michigan's Elliott-Larsen Civil Rights Act, and a slander claim brought by former administrators at a community college. Defendant Wayne County Community College (Wayne) appeals from a jury verdict for plaintiffs, and plaintiffs cross-appeal the district court's directing of a verdict for an individual defendant on the pendent state defamation claim.

I.

In early 1984 plaintiffs, Milan Chonich and Carmen Pascaretti, white males, held exempt (non-union) administrative positions at Wayne. Chonich was Director of Development, and Pascaretti was Administrative Director of Student Services Systems. They were longtime employees whose competence in their positions had not been previously challenged. In February 1984, Dr. Waters, the then Wayne President, and the college administration submitted to the Board of Trustees a revised budget proposal, which called for a reduction in costs necessitating layoffs and the temporary closings of three Wayne campuses. Several days later, defendant Juanita Ford, a black female, Secretary of Wayne's Board of Trustees, wrote a letter (not on Wayne's stationery) regarding the revised budget to a local official of the National Association for the Advancement of Colored People (NAACP), with copies to seventeen other public figures, including state legislators. Ford's letter stated, among other things: "This is a systematic elimination of jobs which are primarily held by blacks and women.... The so called budgetary problem is a subterfuge being utilized to eliminate jobs held by blacks and women.... The position eliminations were compiled overtly and covertly by the following white males...." Ford's letter then listed Pascaretti and Chonich along with five other administrators. The letter also noted the "striking appearance of racism and sexism." Defendants have not demonstrated that Chonich and Pascaretti were on the committee submitting the revised budget.

Shortly thereafter, President Waters wrote a letter to the Board of Trustees stating his understanding of the facts regarding the layoffs and essentially repudiating the contents of Ford's letter. In approximately April, 1984, however, plaintiffs filed a defamation suit in Wayne County Circuit Court. No final disposition was reached in state court. At about this same time President Waters was receiving pressure from state legislators, recipients of Ford's letter to discharge plaintiffs. There was testimony at trial that Waters also received similar pressure from some members of Wayne's Board of Trustees and a monitor appointed by the Michigan legislature as well. In the summer of 1984, Waters reassigned each of the plaintiffs to non-exempt positions: Chonich to the position of Assistant Provost and Pascaretti to the position of "Acting" Dean but he was relieved of most job duties. Both plaintiffs made requests to the President for transfer to the faculty in accordance with asserted rights set out in their contracts with Wayne. Dr. Waters approved these requests, but did not submit his approval to the Board for action because his informal polling of Board members showed that the Board would not approve the requests. Waters, in any event, did not submit these transfer requests to the Board. There was evidence that some members were aware of these requests.

Plaintiffs filed this suit in March, 1985 in district court claiming violation of Title VII, 42 U.S.C. Sec. 1983, and Michigan's Elliott-Larsen Civil Rights Act, charging discrimination by reason of their race (white). In the summer of 1985, both plaintiffs refused to accept proposed early retirement plans in consideration for dropping the pending lawsuits. In the fall of 1985, Dr. Ronald Temple became Wayne's new President. He promptly issued a reorganization plan under which the positions to which plaintiffs had been reassigned were eliminated. Plaintiffs once again requested and were again denied transfers to the Wayne faculty. Pascaretti was subsequently terminated in June 1986. Chonich was demoted to the position of Assistant Dean for Academic Affairs.

Although plaintiffs' initial complaint in district court contained only discrimination claims, by the time of pretrial conferences, the parties to the litigation recognized that plaintiffs also were claiming that defendants Wayne and Ford, as originally charged in their state court suit, had defamed them. The district court, on the day that the trial was scheduled to begin, ordered plaintiffs to amend their complaint to include the defamation claims and allowed the parties additional limited discovery on these claims. Plaintiffs voluntarily dismissed their Title VII claims prior to the commencement of trial. After a continuance for further discovery purposes and a trial, the jury returned verdicts for both plaintiffs and awarded damages in the total amount of $875,000. The district court entered judgment against Wayne, but dismissed defendant Ford by directed verdict from the action based on a finding of qualified privilege and/or immunity. Wayne appeals the jury verdict against it and plaintiffs cross-appeal the district court's dismissal of Ford.

II.

Defendants argue that there was procedural error to their detriment in allowing the defamation claim to be pursued together with the discrimination claim. A last minute amendment was permitted in this regard because the claim arose out of the same conduct and circumstances as the Sec. 1983 claim and the Elliott-Larsen Act claim. The defamation claim itself has long been known to the defendants, and a prior pendant claim is permitted where there is an underlying and substantial federal cause of action involved. We find no reversible error therefore in the action of the district court to permit plaintiffs' pursuit of their defamation/libel claim at the same time and in the same forum with their discrimination causes of action.

Defendant's counsel in proceedings before Judge Gilmore on August 19, 1986, following pretrial, stated that "at the final pretrial, ... the Court indicated that she [plaintiffs' counsel] should not be pursuing both [the state and federal defamation claims] at the same time, at the final pre-trial, it was agreed that she would pursue her libel and slander claim here and not pursue it in State Court." Joint Appendix 186 (emphasis added). If it were indeed "agreed" that plaintiffs would dismiss the state claims and pursue those claims instead in this action in federal court, it is difficult to understand defendant's claim of prejudicial error in permitting plaintiffs to proceed on this basis.

III.

We next consider claims made against the individual defendant, Juanita Ford, Secretary of Wayne's Board of Trustees.

A. Defamation/Libel

The district court dismissed defendant Juanita Ford from this lawsuit, apparently on the grounds that she enjoyed a privilege to make communications on a matter of public concern, with respect to what she at least arguably perceived as potential civil rights violations at Wayne. Plaintiffs argue that the dismissal was erroneous because, although the existence of privilege is a matter of law, abuse of privilege is a question for the jury. Plaintiffs claim that under the holding of Rouch v. Enquirer & News of Battle Creek, 427 Mich. 157, 398 N.W.2d 245 (1986), they needed only to raise a triable question as to whether Ford was negligent (in contrast to proving her actions malicious) in publishing the allegedly defamatory letter in order to get the defamation claim before the jury.

In Rouch the Michigan Supreme Court replaced the common-law public interest privilege in defamation cases with the standard established in Gertz v. Robert Welch, Inc., 418 U.S. 323, 94 S.Ct. 2997, 41 L.Ed.2d 789 (1974): a communication is not privileged when its subject involves a private person in the context of a matter of public interest if the private-person plaintiff can show that the communication was false and was negligently published. Therefore, the plaintiff need not show malice on the publisher's part in such a circumstance in order to impose liability. Rouch, 427 Mich. at 200-06, 398 N.W.2d at 264-67. Although Rouch did not so hold expressly, the Michigan Court of Appeals has interpreted the decision as applying only to private-person plaintiffs. Deitz v. Wometco West Michigan TV, 160 Mich.App. 367, 407 N.W.2d 649, 653 (1987). Whether or not plaintiffs are private persons under Rouch is a question that must be decided before the principles of that case come into play. See Bichler v. Union Bank & Trust Co. of Grand Rapids, 745 F.2d 1006 (6th Cir.1984) (applying Michigan law).

Without deciding that complex question, we believe, however, that under the circumstances of this case, even if plaintiffs are required to prove actual malice or reckless disregard for the truth as to defendant Ford, it was error for the court to dismiss Ford based on her claim of privilege. "Actual malice is defined as knowledge that the published statement was false or as reckless disregard as to whether the statement was false or not." Grebner v. Runyon, 132 Mich.App. 327, 347 N.W.2d 741, 744 (1984). Furthermore, "reckless disregard" requires a finding that "the publisher in fact entertained...