Duffy v. Leading Edge Products, Inc.

Decision Date13 February 1995
Docket NumberNo. 93-2850,93-2850
Citation44 F.3d 308
Parties67 Fair Empl.Prac.Cas. (BNA) 97, 66 Empl. Prac. Dec. P 43,441, 10 IER Cases 491, 23 Media L. Rep. 1455 Jeffrey M. DUFFY, Plaintiff-Appellant, v. LEADING EDGE PRODUCTS, INC., Defendant-Appellee.
CourtU.S. Court of Appeals — Fifth Circuit

Gregg Gerlach, L.G. Clinton, Jr., L.G. Clinton Jr., & Assn., Houston, TX, for appellant.

Kathleen H. Graham, William C. Book, Tekell, Book, Matthews & Limmer, Houston, TX, for appellee.

Appeal from the United States District Court for the Southern District of Texas.

Before GARWOOD, JOLLY and STEWART, Circuit Judges.

GARWOOD, Circuit Judge:

In this Texas law diversity action for defamation, plaintiff-appellant Jeffrey Duffy (Duffy) alleges that his former employer, defendant-appellee Leading Edge Products, Inc. (Leading Edge), made false allegations of sexual harassment against him which he was as a practical matter compelled to republish to prospective employers. He challenges the district court's order granting Leading Edge's motion for summary judgment. We conclude that Duffy failed to present sufficient evidence of actual malice to overcome Leading Edge's qualified privilege and therefore affirm.

Facts and Proceedings Below

On April 13, 1992, Duffy was fired by Leading Edge for, he was told, sexually harassing two female co-workers. The allegations arose out of two separate incidents. Although there are some discrepancies in the details of these encounters, neither party disputes the basic facts, or that the events actually occurred.

The first incident occurred in September 1991, when Duffy and Leading Edge employee Linda Morse (Morse) were working together at a convention in Dallas, Texas. When the convention ended, Duffy and Morse celebrated at the hotel bar; both eventually became intoxicated. At the end of the evening, Morse followed Duffy to his room to get some aspirin. There, Duffy and Morse kissed briefly but stopped after Morse insisted that she did not feel right about what they were doing. Duffy agreed, and Morse left. She did not tell anyone else about the incident until some months later, when she revealed to Leading Edge manager Margaret Cardamone (Cardamone) that Duffy had "made a pass" at her.

The second incident occurred in the early hours of April 6, 1992. Duffy and other Leading Edge employees, including Jill DiVirgillio (DiVirgillio), were participating in a trade show in Chicago. Earlier in the evening, following a company-sponsored happy hour, Duffy had accompanied DiVirgillio to her hotel room while she dropped off some sodas. Duffy and DiVirgillio had then returned to the hotel lounge but did not see each other for the rest of the evening. Some time around midnight, after DiVirgillio had returned to her room for the evening, Duffy knocked on her door. He told DiVirgillio that he had lost his room key and thought he might have dropped it when he was in the room earlier. DiVirgillio let him in to search for the key. While searching around the bed (on which DiVirgillio was sitting), Duffy made some movement towards DiVirgillio. Duffy says he put his hands on top of hers; DiVirgillio describes him as lunging towards her as if to get on top of her. DiVirgillio said "no," and Duffy then left the room.

DiVirgillio reported this incident to Cardamone on April 6. Cardamone relayed the story, and the incident involving Morse, to Leading Edge's president, Al Agbay (Agbay). On April 9, Agbay contacted Leading Edge's manager of human resources, Linda DiStefano (DiStefano). Agbay indicated that he wanted Duffy terminated because what he had done was "almost as bad as date rape." He told DiStefano to investigate the incidents.

DiStefano conducted her investigation on Friday, April 10. She spoke to DiVirgillio, Morse, Cardamone, and Duffy by phone concerning the incidents. DiStefano reported that both DiVirgillio and Morse were "visibly upset" when discussing these incidents, that neither woman seemed to be deceiving her, and that neither had any motive to fabricate a story simply to get Duffy in trouble. DiStefano also called the hotel where Duffy and DiVirgillio had stayed in Chicago and asked about the procedure for issuing new room keys. Although Duffy had told DiStefano that he was issued a new key at the front desk after being unable to find his key in DiVirgillio's room, the hotel informed her that no new room keys had been issued on April 5 or 6. 1 DiStefano concluded that "a pattern of sexual advancement appears evident with Jeff" and recommended that he "be terminated immediately for sexual harrassment [sic]." Duffy was fired on April 13, 1992.

Duffy filed suit against Leading Edge on the theory of compelled self-publication defamation. 2 He claims that Leading Edge should be accountable for damages because it was reasonably foreseeable that he would as a practical matter be required to tell prospective employers of the allegedly defamatory reason for his termination. 3 Although he agrees with Leading Edge that it had a qualified privilege to make the statements, which would extend to his republication of them, he contends that Leading Edge lost that privilege because it acted with malice. He attributes malice to Leading Edge on three bases: 1) that DiStefano's investigation was "completely inadequate and reckless"; 2) that DiStefano's investigation was a mere pretext for the decision to fire Duffy; and 3) that Leading Edge, which did not have a sexual harassment policy until after Duffy was terminated, failed to make an adequate determination of what conduct constituted sexual harassment before applying that label to Duffy's conduct. The district court, however, determined that Leading Edge was protected both by its qualified privilege and by the absolute defense of truth. 4 It therefore granted summary judgment for Leading Edge. Duffy now appeals that order.

I. Standard of Review

We review a grant of summary judgment de novo, using the same standards as the district court. Hansen v. Continental Insurance Co., 940 F.2d 971, 975 (5th Cir.1991). Summary judgment is appropriate when the record reflects that "there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). The moving party bears the initial burden of showing that there is no genuine issue for trial; it may do so by pointing out " 'the absence of evidence supporting the nonmoving party's case.' " Skotak v. Tenneco Resins, Inc., 953 F.2d 909, 913 (5th Cir.), cert. denied, --- U.S. ----, 113 S.Ct. 98, 121 L.Ed.2d 59 (1992) (citation omitted). If the moving party meets this burden, the nonmoving party who will have the burden of proof at trial must come forward with summary judgment evidence establishing the existence of a genuine issue; that evidence must be such that if introduced at trial it would suffice to prevent a directed verdict against the nonmovant. Celotex Corp. v. Catrett, 477 U.S. 317, 321, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). Although we consider the evidence in the light most favorable to the nonmoving party, Lavespere v. Niagara Machine & Tool Works, Inc., 910 F.2d 167, 178 (5th Cir.1990), cert. denied, --- U.S. ----, 114 S.Ct. 171, 126 L.Ed.2d 131 (1993), conclusory allegations unsupported by concrete and particular facts will not prevent an award of summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986).

II. Qualified Privilege

Under Texas law, "[a] communication on a subject in which the author or the public has an interest, or with respect to which the author has a duty to perform to another owing a corresponding duty, may constitute a qualified or conditional privilege." Marathon Oil Co. v. Salazar, 682 S.W.2d 624, 630 (Tex.App.--Houston [1st Dist.] 1984, writ ref'd n.r.e.). References and accusations made by an employer about an employee to one with a common interest clearly come within this doctrine. See Pioneer Concrete of Texas, Inc. v. Allen, 858 S.W.2d 47, 49 (Tex.App.--Houston [14th Dist.] 1993, writ denied); Schauer v. Memorial Care Systems, 856 S.W.2d 437, 449 (Tex.App.--Houston [1st Dist.] 1993, no writ). The interest giving rise to the privilege may be that of the publisher of the statement, the recipient, or a third person. Pioneer Concrete, 858 S.W.2d at 50.

Neither party disputes that Leading Edge had a qualified privilege to make the allegedly defamatory statement regarding Duffy, a privilege that would extend to any republication by him. 5 The question is whether Leading Edge acted with malice, thereby losing its qualified privilege.

III. Malice
A. Definition of Malice

Our first task is to determine what definition of malice the Texas courts would apply in this case. Under the common law definition, "[m]alice has been defined as ill will, bad or evil motive, or such gross indifference or reckless disregard of the rights of others as to amount to a willful or wanton act." Marathon Oil Co., 682 S.W.2d at 631. "Actual malice," a term of art developed in New York Times v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964), and its progeny, is somewhat different:

"Actual malice is not ill will; it is the making of a statement with knowledge that it is false, or with reckless disregard of whether it is true. 'Reckless disregard' is defined as a high degree of awareness of probable falsity, for proof of which the plaintiff must present 'sufficient evidence to permit the conclusion that the defendant in fact entertained serious doubts as to the truth of his publication.' An error in judgment is not enough." Carr v. Brasher, 776 S.W.2d 567, 571 (Tex.1989) (citations omitted).

This is a higher standard than common law malice; only clear and convincing proof will support recovery. Howell v. Hecht, 821 S.W.2d 627, 630 (Tex.App.--Dallas 1991, writ denied). Negligence, lack of investigation, or failure to act as a reasonably...

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