Farmer v. Lowe's Companies, Inc.
| Decision Date | 12 December 2001 |
| Docket Number | No. CIV. 5:00CV81.,CIV. 5:00CV81. |
| Citation | 188 F.Supp.2d 612 |
| Court | U.S. District Court — Western District of North Carolina |
| Parties | Carol A. FARMER, Plaintiff, v. LOWE'S COMPANIES, INC.; and Robert L. Tillman, Defendants. |
J. Griffin Morgan, Elliott, Pishko, Gelbin & Morgan, Winston-Salem, NC, Judith P. Vladeck, Vladeck, Waldman, Elias & Engelhard, P.C., New York City, for plaintiff.
Norwood Robinson, Michael L. Robinson, John N. Taylor, Jr., Robinson & Lawing, L.L.P., Winston-Salem, NC, for defendants.
THIS MATTER is before the Court on Plaintiff's timely objections to the to the Memorandum and Recommendation of United States Magistrate Judge H. Brent McKnight. Pursuant to standing orders of designation and 28 U.S.C. § 636, this Court referred the parties' motions to the Magistrate Judge for a recommendation as to the disposition of Plaintiff's motion to amend and Defendants' motion to dismiss for failure to state a claim. The Magistrate Judge entered a detailed recommendation that the Defendants' motion should be granted in part and denied in part and that the Plaintiff's motion should be denied.
For the reasons stated below, the Court overrules the Plaintiff's objections in part and sustains them in part, orders the Defendants' motion granted in part and denied in part, and orders the Plaintiff's motion to amend granted.
The district court conducts a de novo review of those portions of a Magistrate Judge's Memorandum and Recommendation to which specific objections are filed. See 28 U.S.C. § 636(b). The Plaintiff has filed specific objections to the Recommendations that her claim for libel per se should be dismissed for failure to state a claim, that the claim for libel per quod be dismissed without prejudice for lack of subject matter jurisdiction, and her motion for leave to amend the complaint should be denied.
Defendants moved for dismissal of all of Plaintiff's claims pursuant to Rule 12(b)(6) for failure to state a claim. In ruling on a motion to dismiss for failure to state a claim, the Court must Flood v. New Hanover County, 125 F.3d 249, 251 (4th Cir. 1997); Shepard's, Motions in Federal Court, § 5.124, at 367 (2d ed.1991). "To survive a motion under Fed.R.Civ.P. 12(b)(6), a complaint need only outline a recognized legal or equitable claim which sufficiently pinpoints the time, place, and circumstances of the alleged occurrence and which, if proven, will justify some form of relief." Id., § 5.123, at 366. If "relief could be granted under any set of facts that could be proved consistent with the allegations," the motion must be denied. Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984).
At the time this suit was filed, Plaintiff Carol Farmer was a Director on the Board of Defendant Lowe's Companies, Inc. (Lowe's), a position she had held since 1994. Defendant Robert Tillman (Tillman) is President, Chief Executive Officer (CEO), and Chairman of the Board of Directors of Defendant Lowe's. Plaintiff received remuneration of approximately $50,000 per annum for her services as a Director. In addition to her work on the Board of Lowe's, Plaintiff serves on several other corporate Boards of Directors and operates her own business as a consultant to various companies. Throughout her service as a Director, Plaintiff complained about what she perceived as the under representation of women and minorities in the employment of Lowe's. She specifically alleges that in 1997 the Board began to study the issue of the under representation of minorities in the company and that she worked to increase the participation of minorities in the company, including through service on the Board. As the March 2000 shareholder's meeting approached, Tillman informed Plaintiff that it was the unanimous decision of the remaining Board members that she not be re-nominated to the Board on the slate proposed by the current Board. At the March 2000 meeting of the Governance Committee of the Board, on which Plaintiff served, she opposed the proposed slate of Directors, which did not include herself, on the grounds that it did not include a woman or racial minority. The proposed slate passed. In several communications from Lowe's regarding the April Shareholder's meeting,1 the company reported that it was reducing the size of the Board to "reflect the retirement of Carol A. Farmer ... as [a] Class II Director[]." The Board's slate of proposed Directors was elected by the shareholders at their meeting on May 26, 2000. Plaintiff alleges that Tillman was responsible for the publication of these documents in his positions as President, CEO, and Chairman. Plaintiff alleges that publication of these statements has injured her reputation and has affected, or will affect, her business.
Furthermore, Plaintiff asserts that in 1994 and in 1997 the Board of Lowe's adopted a "sense of the Board" guideline for corporate governance which set out a retirement age for members of the Board. The guideline set the age for all future Board members at 70, no later joining director would be allowed to begin a new term on the Board after his 70th birthday. Anyone on the Board at the time the guideline was passed could remain and begin a new term after their 70th birthday, but these Director were expected to voluntarily resign on or before December 31 of the year in which they reached their 72nd birthday, regardless of completion of their term. No Director, other than Plaintiff, has been removed from the Board or asked not to seek another term except for those who reached the retirement ages set out in the "sense of the Board" guideline. Plaintiff alleges that she was not re-nominated to the Board as a result of her complaints about the numbers of minorities employed by Lowe's.
In response to Defendants' motion to dismiss the complaint, Plaintiff filed a motion to amend in the hopes of curing some of the pleading defects asserted in Defendants' motion. Once a responsive pleading has been filed, as is the case here, a party may only amend his pleading by leave of court, or with the consent of the other parties. Fed.R.Civ.P. 15(a). Such leave, however, "shall be freely given when justice so requires." Id. The Magistrate Judge recommended denial of the motion to amend the complaint on the grounds that even the amended complaint would not overcome the strictures of Rule 12(b)(6). Since futility is the only reason this Court can see to deny Plaintiff's motion to amend, the undersigned will consider the proposed amended complaint for disposition of this motion. Rather than edit the proposed amended complaint based on the Court's partial granting of the Defendants motion to dismiss, the Court will grant the motion to amend in full while dismissing the first and second causes of action for libel as discussed below.
The first cause of action in Plaintiff's complaint alleges libel per se. The Plaintiff asserts that the statement that she, "retire[d] ... as [a] Class II Director[]," is libelous. To qualify as libelous per se under North Carolina law, an allegedly defamatory statement must meet certain well established criteria. The North Carolina courts have "defined libel per se as a publication which, when considered alone without explanatory circumstances: (1) charges that a person has committed an infamous crime; (2) charges a person with having an infectious disease; (3) tends to impeach a person in that person's trade or profession; or (4) otherwise tends to subject one to ridicule, contempt or disgrace." Aycock v. Padgett, 134 N.C.App. 164, 166, 516 S.E.2d 907, 909 (1999); Gaunt v. Pittaway, 135 N.C.App. 442, 448, 520 S.E.2d 603, 607-08 (1999), cert. denied, 353 N.C. 371, 547 S.E.2d 810 (2001). Whether a publication is one of the type that properly may be deemed libelous per se is a question of law to be decided initially by the trial court. See, Renwick v. News & Observer, 310 N.C. 312, 317-18, 312 S.E.2d 405, 409 (1984) (quoting Flake v. Greensboro News Co., 212 N.C. 780, 786, 195 S.E. 55, 60 (1938)); Sasser v. Rouse, 35 N.C. 142, 143 (1851). Plaintiff asserts that the statement tends to impeach her in her trade or profession. Statements alleged to impeach a person in their trade or profession must meet two additional criteria. They "(1) must touch the plaintiff in [her] special trade or occupation, and (2) must contain an imputation necessarily hurtful in its effect on [her] business." Market America, Inc. v. Christman-Orth, 135 N.C.App. 143, 151, 520 S.E.2d 570, 577 (1999) (citations omitted) (emphasis added); Badame v. Lampke, 242 N.C. 755, 757, 89 S.E.2d 466, 468 (1955). Furthermore, the allegedly defamatory document must "be defamatory on its face within the four corners thereof." Flake, 212 N.C. at 786, 195 S.E. at 60. In other words, "defamatory words to be libelous per se must be susceptible of but one meaning and of such nature that the court can presume as a matter of law that they tend to disgrace and degrade the party or hold [her] up to public hatred, contempt, or ridicule, or cause [her] to be shunned and avoided." Id. The statement that Plaintiff had retired from the Board of Directors does not fit those requirements. This statement, without explanation, is not defamatory. It does not hold Plaintiff up to public hatred, contempt or ridicule or cause her to be shunned or avoided. The Court finds, therefore, as a matter of law, that the statement that Plaintiff had retired from her position on the board of directors is not libelous per se.
Plaintiff contends...
To continue reading
Request your trial
-
Jackson v. Wilmington Hous. Auth.
...as libelous per se, "an allegedly defamatory statement must meet certain well-established criteria." Farmer v. Lowe's Companies, Inc., 188 F. Supp. 2d 612, 615-16 (W.D.N.C. 2001). North Carolina courts have "defined libel per se as a publication which, when considered alone without explanat......