Hogan v. Winder

• Decision Date: 05 August 2014
• Docket Number: No. 12–4167.,12–4167.
• Citation: 762 F.3d 1096
• Parties: Chris HOGAN, an individual, Plaintiff–Appellant, v. Michael K. WINDER, in his official capacity as Mayor of West Valley City, Utah, and in his individual capacity; West Valley City, Utah, a municipal corporation; Kevan Barney; The Summit Group; David Shaw, in his individual capacity; Kirton & McConkie, P.C.; Todd Marriott, in his individual capacity; Gary Jones, in his individual capacity; Kane Loader, in his individual capacity; Utah Telecommunications Open Infrastructure Agency; Deseret Digital Media, Inc.; Sean Buckley; Questex Media Group, LLC doing business as Fiercemarkets; Donald J. Rzeszut, and Does 1–100, Defendants–Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

762 F.3d 1096

Chris HOGAN, an individual, Plaintiff–Appellant,

v.Michael K. WINDER, in his official capacity as Mayor of West Valley City, Utah, and in his individual capacity; West Valley City, Utah, a municipal corporation; Kevan Barney; The Summit Group; David Shaw, in his individual capacity; Kirton & McConkie, P.C.; Todd Marriott, in his individual capacity; Gary Jones, in his individual capacity; Kane Loader, in his individual capacity; Utah Telecommunications Open Infrastructure Agency; Deseret Digital Media, Inc.; Sean Buckley; Questex Media Group, LLC doing business as Fiercemarkets; Donald J. Rzeszut, and Does 1–100, Defendants–Appellees.

No. 12–4167.

United States Court of Appeals, Tenth Circuit.

Aug. 5, 2014.

Steve S. Christensen (Craig L. Pankratz with him on the briefs) Christensen Corbett & Pankratz, PLLC, Salt Lake City, UT, for Appellant.

David L. Mortensen, Stoel Rives LLP, Salt Lake City, UT, for Appellee West Valley City, UT, and Jeffrey J. Hunt, Parr Brown Gee & Loveless, P.C., Salt Lake City, UT, for Appellee Deseret Digital Media, Inc. (David C. Reymann and Austin J. Riter, Parr Brown Gee & Loveless, P.C., Salt Lake City, UT, for Appellee Deseret Digital Media, Inc.; Monica S. Call, Stoel Rives LLP, Salt Lake City, UT, for Appellee West Valley City, UT; Erik A. Olson, Olson Law, P.C., Salt Lake City, UT, for Appellees Kirton & McConkie, P.C. and David Shaw; Michael P. O'Brien and Jesse Oakeson, Jones Waldo Holbrook & McDonough, Salt Lake City, UT, for Appellees Kevan Barney and The Summit Group; Steven W. Allred, Salt Lake City, UT, for Appellee Michael K. Winder; Kristin A. VanOrman and Jeremy G. Knight, Strong & Hanni, Salt Lake City, UT, for Appellees UTOPIA, Todd Marriott, Gary Jones and Kane Loader; Richard A. Van Wagoner and Melinda K. Bowen, Snow, Christensen & Martineau, Salt Lake City, UT, for Appellees FierceMarkets, also known as Questex Media Group, LLC and Sean Buckley; and J. Simón Cantarero, Pearson Butler Carson & Cook, PLLC, South Jordan, UT, for Appellee Donald J. Rzeszut, with them on the brief).

Before TYMKOVICH, BRORBY, and MURPHY, Circuit Judges.

TYMKOVICH, Circuit Judge.

Chris Hogan lost his job with the Utah Telecommunications Open Infrastructure Agency, or “UTOPIA,” a state agency charged with upgrading high-speed internet access. Claiming he was fired for revealing a conflict of interest in contract awards, he threatened to sue the agency for wrongful termination. Shortly after making this threat, he was subject to several unflattering media articles about his job performance and his termination dispute with the agency's leaders. Several of the stories claimed his threats to sue the agency amounted to extortion or blackmail. It turns out the first of these stories was written pseudonymously by Michael Winder, who was the mayor of West Valley City, where UTOPIA did much of its business.

Hogan sued UTOPIA, the mayor, the City, and a number of other persons he believes were involved in the publication of the articles. He claims the articles constitute defamation, false light invasion of privacy, intentional infliction of emotional distress, a deprivation of his constitutional rights in violation of 42 U.S.C. § 1983, and a civil conspiracy under 42 U.S.C. § 1985. He also sued UTOPIA for First Amendment violations, breach of contract, wrongful termination, and other violations of state law in a separate lawsuit. ¹

The district court dismissed all of the claims, and we AFFIRM. Largely because the articles' critical statements are explained by their context, we agree with the district court's conclusion that the articles were neither defamatory nor otherwise tortiously offensive. And we further agree that Hogan's federal law claims cannot go forward because he has insufficiently pleaded that the defendants' actions were exercises of their power under state law and that the defendants conspired to punish Hogan for bringing his claims to court.

I. Background

Beginning in 2008, Hogan worked for UTOPIA as a consultant under the terms of a professional services agreement. In the spring of 2011, Hogan began to suspect that UTOPIA's executive director unfairly favored a bid for a contract from the company where the director's brother worked. Hogan expressed his suspicions to UTOPIA's plant manager, who oversaw the contractor selection process. The plant manager discussed Hogan's suspicions with the executive director, who shortly afterwards terminated Hogan's employment.²

The day after Hogan's termination, Michael Winder contacted Hogan to request a meeting. Winder is the mayor of West Valley City, where UTOPIA had substantial operations. At his meeting with Winder, Hogan came to suspect that Winder was aligned with UTOPIA because Winder asked Hogan to turn over his UTOPIA cell phone. When Hogan hesitated, Winder indicated that UTOPIA's executive director had asked him to collect it. Later, UTOPIA's executive director sent a text to Hogan's wife's cell phone, a number that Hogan had disclosed only to Winder.

Hogan then hired an attorney, who sent UTOPIA a draft complaint, alleging wrongful discharge and several contract claims, along with a letter indicating that Hogan would be amenable to settling the dispute. Three days later, Hogan's attorney sent another letter suggesting that, since Hogan realized the “public scrutiny” and press coverage that would result if he filed his lawsuit could destroy UTOPIA, he would be willing to resolve the dispute if UTOPIA met four demands: that UTOPIA replace its executive director; that Hogan be allowed to participate in the search for a new executive director; that Hogan be able to “present a success plan for himself so there is a smooth transition”; and that UTOPIA pay him $219,000 in expectation damages, punitive damages, costs, and attorney's fees.App. 308.

UTOPIA's counsel responded to this letter, suggesting that Hogan's proposed course of action, “at least as he frames the matter and perceives UTOPIA's interests and vulnerabilities, go [sic] by the names of ‘blackmail’ and ‘extortion.’ ” App. 316.

Hogan's attorney's response further detailed “the already precarious public opinion of UTOPIA” and the likelihood that this “lawsuit will destroy any faith that the public has in UTOPIA,” thereby preventing it from receiving needed public bonds. App. 332.

Shortly thereafter, each party filed a lawsuit. UTOPIA filed a request in state court for a preliminary injunction to prevent Hogan from disclosing information he had learned during his employment. At UTOPIA's urging, the state court sealed the case record. Hogan then filed suit in federal court. The Salt Lake Tribune wrote an article about the suit, and UTOPIA moved to seal the record in the federal case as well.

The state court took action first, denying UTOPIA's request for an injunction after conducting an evidentiary hearing. It reserved the issue of whether to unseal the record. The next day, however, UTOPIA voluntarily dismissed the case, its motion to seal the state court record, and its motion to seal the federal court record.

Five days later, on May 1, 2011, local media outlet KSL published an online article entitled “Former UTOPIA contractor accused of extortion.” In full, the article read,

Chris Hogan, a Colorado man retained by UTOPIA as a contractor to provide consulting services, is being accused of extortion in court documents that were unsealed in Utah's 3rd District Court on Wednesday. Utah Telecommunications Open Infrastructure Agency, or UTOPIA, is a fiber optic deployer run by a consortium of 16 Utah cities to provide high-speed broadband to their communities, and Hogan provided marketing consulting for the past three years.

Hogan's contract was not renewed last month by UTOPIA due to “performance issues,” according to UTOPIA board chairman and Midvale City Manager Kane Loader. On March 21 and 24, days after being informed that the contract was not going to be renewed, Hogan's attorney, Steve S. Christensen, sent written notices to UTOPIA threatening to file a lawsuit and noting that Hogan would bring unfavorable public scrutiny to UTOPIA unless specific demands of Hogan's were met. Such publicity, according to Christensen, would “threaten to destroy the work of UTOPIA.”

Hogan's financial demands totaled $219,000, including punitive damages and legal fees; but he also made the unusual request of demanding that UTOPIA executive director Todd Marriott be terminated, that Hogan be allowed to participate in the search and training of a new executive director, and that Hogan be free to establish his own succession plan for a “smooth transition” with the organization. “This offer will remain open until April 4, 2011,” concluded Christensen.

“What Mr. Hogan attempts in proposing this extravagant course go by the names of ‘blackmail’ and ‘extortion,’ ” replied UTOPIA attorney David Shaw in an April 4 reply, unsealed Wednesday. UTOPIA also responded by filing a suit against Hogan in Utah's 3rd District Court to ensure that he would abide by the confidentiality clause of his contract. Hogan responded Tuesday by filing a lawsuit in U.S. District Court in Utah. This suit accuses Marriott of favoring a neighbor for a potential employment position, favoring a company that employed Marriott's brother for a bid, and other complaints of mismanagement.

“Any allegations of impropriety by UTOPIA and its management in this suit are without merit, and we stand by UTOPIA CEO Todd Marriott and his team,” responded Loader in a statement from UTOPIA's board Wednesday. “The management team at UTOPIA is sound and continues to grow and operate our award-winning fiber optic network,” he said.

“It is a very sad situation,” noted one UTOPIA vendor. “Chris Hogan was a great talent, but in recent months exhibited erratic behavior that ultimately brought him down.”

The lawsuit was filed weeks, or perhaps a couple months, before UTOPIA is expected to receive a $20 million round of...