Desai v. Charter Commc'ns, LLC, Civil Action No. 3:14-cv-459-DJH

• Decision Date: 29 March 2019
• Docket Number: Civil Action No. 3:14-cv-459-DJH
• Citation: 381 F.Supp.3d 774
• Parties: Kruti DESAI et al., Plaintiffs, v. CHARTER COMMUNICATIONS, LLC, Defendant.
• Court: U.S. District Court — Western District of Kentucky

381 F.Supp.3d 774

Kruti DESAI et al., Plaintiffs,

v.CHARTER COMMUNICATIONS, LLC, Defendant.

Civil Action No. 3:14-cv-459-DJH

United States District Court, W.D. Kentucky, Louisville Division.

Signed March 29, 2019

Thomas E. Carroll, Lance W. Turner, Carroll & Turner, PSC, Monticello, KY, for Plaintiffs.

Culver V. Halliday, Stephen P. McCallister, Stoll Keenon Ogden PLLC, Louisville, KY, John C. O'Quinn, Kasdin M. Mitchell, Patrick F. Philbin, Tracie L. Bryant, Kirkland & Ellis LLP, Washington, DC, Laura M. Jordan, R. Nelson Williams, Thompson Coburn LLP, St. Louis, MO, Kasdin Miller, for Defendant.

MEMORANDUM OPINION AND ORDER

David J. Hale, Judge

Plaintiffs Kruti Desai, Melanie Fink, Belinda Gale Parkerson, Jeremy Parkerson, Daniel Popp, and Carolyn Vincent alleged that their former employer, Charter Communications, LLC, falsely accused them of theft after their employment was terminated. (Docket No. 7) Following a weeklong trial, a jury agreed, finding Charter liable for defamation per se. (D.N. 168) Charter has moved for judgment as a matter of law or a new trial. (D.N. 183) In the alternative, it seeks reduction of the damage award. For the reasons explained below, the Court will reduce the punitive damages and deny Charter's motion in all other respects.

I. BACKGROUND

The Court previously summarized the facts of this case as follows:

Plaintiffs worked at Charter's call center in Louisville, Kentucky, in various capacities. Each was given a Hewlett-Packard (HP) computer printer by Linda Showalter, an administrative assistant at Charter. Plaintiffs maintain that they believed Showalter's distribution of printers was authorized by management. Charter, however, considered Plaintiffs' acceptance of the printers to be a violation of its policy against removing company property without authorization, and it terminated most of the employees involved.

Approximately one month after Plaintiffs were fired, Charter Human Resources Manager Rodger Simms gave a PowerPoint presentation during a Charter leadership conference. On a slide with the heading "Leadership and Judgment," Simms referred to " ‘Operation ...’ Green-light, Buzz-kill, Printer-gate." He encouraged employees to "[a]ct with Integrity and Character." The notes for Simms's oral presentation accompanying the slide state: "Let's get the elephant in the room out in the open, how many of you have heard of ... Operation codes for things that weren't right! All examples of poor judgment. Not bad people, people we know and love but they made the wrong choices." Simms emphasized the importance of "integrity," "character," and having "the courage to do the right thing." He also warned that "[k]nowing something isn't right and allowing it to continue is the same as you doing it!" "Green-light" referred to an incident in which a Charter employee used a company credit card for personal benefit and was terminated as a result. "Buzz-kill" involved the sale of illegal drugs on Charter property by Charter employees; those employees were also terminated.

Plaintiffs sued Charter for defamation on the ground that "Charter made false statements alleging misconduct on the part of the Plaintiffs relating to the ... distribution of Hewlett-Packard ink jet printers, including but not limited to the [PowerPoint] presentation." They contend that the use of the term "Printer-gate," particularly in conjunction with references to employee theft and drug-dealing, implied that their actions were criminal.

(D.N. 129, PageID # 2710-11 (internal citations and footnote omitted))

The case was tried solely on a theory of defamation per se. At the close of Plaintiffs' case, Charter moved for judgment as a matter of law, arguing that "Printer-gate" could not constitute defamation per se because it had no "objectively understood definition" (D.N. 148-1, PageID # 3243) and was not defamatory on its face (id. , PageID # 3243-45); that Plaintiffs had no proof of damages to support a claim of defamation per quod (id. , PageID # 3245-47); and that any inference arising from "Printer-gate" was true because the term referred to "an incident involving the unauthorized removal of company printers from Charter's premises." (Id. , PageID # 3248; see id. , PageID # 3247) The Court denied that motion and later granted Plaintiffs' motion for judgment as a matter of law on Charter's truth defense, concluding that there was insufficient evidence from which a reasonable jury could find that Plaintiffs' actions constituted criminal theft. (D.N. 175, PageID # 4091-92) The jury ultimately found Charter liable, awarding each plaintiff $ 350,000 in compensatory damages and $ 1 million in punitive damages. (D.N. 168) The Court entered judgment for Plaintiffs in accordance with the jury's verdict (D.N. 179), and Charter timely sought relief under Rules 50 and 59 of the Federal Rules of Civil Procedure. (D.N. 183)

II. ANALYSIS

Charter renews its Rule 50 motion for judgment as a matter of law on the issue of whether the term "Printer-gate" can constitute defamation per se. (D.N. 183-1, PageID # 4372-86; see D.N. 148) It further argues that it is entitled to a new trial on the grounds that it should have been allowed to present the defenses of truth and qualified privilege; that James Eversole's testimony was admitted in error; and that the jury was required to find malice by clear and convincing evidence in order to award punitive damages. (See D.N. 183-1, PageID # 4386-4404)

Because this is a diversity case, Kentucky law governs the Court's Rule 50 analysis. See Lindenberg v. Jackson Nat'l Life Ins. Co. , 912 F.3d 348, 360 (6th Cir. 2018) ("In this Circuit, a federal court sitting in diversity must apply the standard for judgments as a matter of law of the state whose substantive law governs." (quoting DXS, Inc. v. Siemens Med. Sys., Inc. , 100 F.3d 462, 468 (6th Cir. 1996) )).

Under Kentucky law, "a motion for a directed verdict ... should be granted only if there is a complete absence of proof on a material issue in the action, or if no disputed issue of fact exists upon which reasonable minds could differ. In deciding such a question, every favorable inference which may reasonably be drawn from the evidence should be accorded the party against whom the motion is made."

Ventas, Inc. v. HCP, Inc. , 647 F.3d 291, 314 (6th Cir. 2011) (quoting Morales v. Am. Honda Motor Co. , 151 F.3d 500, 506 (6th Cir. 1998) ); see also Toler v. Süd-Chemie, Inc. , 458 S.W.3d 276, 285 (Ky. 2014) (citations omitted).

There is likewise a high bar for relief under Rule 59 :

[the Sixth Circuit] ha[s] interpreted Rule 59 to mean that "a new trial is warranted when a jury has reached a ‘seriously erroneous result’ as evidenced by: (1) the verdict being against the weight of the evidence; (2) the damages being excessive; or (3) the trial being unfair to the moving party in some fashion, i.e., the proceedings being influenced by prejudice or bias."

Mosby-Meachem v. Memphis Light, Gas & Water Div. , 883 F.3d 595, 606 (6th Cir. 2018) (quoting Holmes v. City of Massillon, Ohio , 78 F.3d 1041, 1045-46 (6th Cir. 1996) ). Charter has not demonstrated that either remedy is warranted here.

A. Defamation Per Se

As it has on numerous prior occasions, Charter argues that the term "Printer-gate" cannot constitute defamation per se. Charter first asserts that there was no evidence to support a finding that Simms's presentation imputed criminal conduct to Plaintiffs. (D.N. 183-1, PageID # 4372-76) It further contends that the Court, not the jury, should have determined whether defamation per se occurred. (Id. , PageID # 4376-86) Neither argument is persuasive.

1. Sufficiency of the Evidence

According to Charter, "on the evidence presented at trial, no reasonable jury could have concluded that the use of the term ‘Printer-gate’ suggested that the Plaintiffs had engaged in theft." (Id. , PageID # 4372) But that was not the issue before the jury; the Court had already found, as a matter of law, that the term was "capable of bearing a defamatory meaning." (D.N. 129, PageID # 2717 (quoting Yancey v. Hamilton , 786 S.W.2d 854, 858-59 (Ky. 1989) ); see id. , PageID # 2718 ("Construing the[ ] facts in the light most favorable to Plaintiffs, Simms's reference to ‘Printer-gate’ imputed criminal conduct—theft—to Plaintiffs.")) The jury was tasked with deciding whether the "Printer-gate" reference "was reasonably understood by persons who heard it as accusing the plaintiffs of criminal theft."¹ (D.N. 167, PageID # 3519)

Charter observes that "multiple witnesses who attended the presentation testified that they did not understand the term to suggest anything criminal at all." (D.N. 183-1, PageID # 4373) It cites the testimony of current Charter employees Mike Barnard, Sandi Streicher, and Theo Carney defining "Printer-gate" as they understood it. (Id. ) Charter acknowledges, however, that two witnesses who attended the meeting—Samantha Little and James Eversole—testified that they understood the term to imply that Plaintiffs had stolen from the company. (Id. , PageID # 4373-74) Contrary to Charter's representation, Little did not merely "testif[y] vaguely that the term ‘insinuates that some type of illegal activity had been performed’ " (id. , PageID # 4374); she also testified that she interpreted it as referring to theft.² (D.N. 172, PageID # 3661-62) And Eversole, in addition to his statement that the presentation "kind of compar[ed] [Plaintiffs] to gambling and murder"³ (id. , PageID # 3677), stated that

the message that was given during the summit didn't really filter into the conversations that were afterward. Those particular conversations were like, oh, well, that was the time that we fired a bunch of people because they stole equipment. Like don't do it, like don't take anything from the company.

(Id. , PageID # 3677-78 (emphasis added)) Thus, both Little and Eversole provided testimony supporting the jury's verdict.⁴

Charter next asserts that Little's testimony cannot support...