I. K. v. Banana Republic, LLC
| Decision Date | 26 January 2022 |
| Docket Number | A173330 (Control), A174072 |
| Citation | 317 Or.App. 249,505 P.3d 1078 |
| Parties | I. K., an individual proceeding under a fictitious name, Plaintiff-Appellant, v. BANANA REPUBLIC, LLC, dba Banana Republic #1557, a foreign limited liability corporation; and Teri Turner, an individual, Defendants-Respondents, and Johnny Tuck Chee Chan, an individual, Defendant. C. K., an individual proceeding under a fictitious name, Plaintiff-Appellant, v. Banana Republic, LLC, dba Banana Republic #1557, a foreign limited liability company, Defendant-Respondent, and Teri Turner, an individual et al, Defendants. |
| Court | Oregon Court of Appeals |
Barbara C. Long argued the cause for appellant I. K. Also on the briefs was Vogt & Long PC.
Rebecca Cambreleng argued the cause for appellant C. K. Also on the briefs was Crispin Marton Cambreleng.
John A. Berg, Portland, argued the cause for respondents. Also on the brief were Heather N. St. Clair and Littler Mendelson, P.C.
Ashley L. Vaughn filed the brief amicus curiae for Oregon Trial Lawyers Association.
Before Kamins, Presiding Judge, and Lagesen, Chief Judge, and Landau, Senior Judge.
In these consolidated cases, plaintiffs allege that they suffered serious emotional trauma from having been video recorded at work while using a private employee restroom. The recording was done by a fellow employee whom plaintiffs allege their employer and one of its managers should have known would do such things had they not been negligent in their hiring and retention practices. The trial courts in both cases dismissed the complaints under ORCP 21 A(8) for failure to state a claim. The courts reasoned that, under Oregon law, there can be no recovery for negligent infliction of emotional distress in the absence of physical impact or the violation of a legally protected right independent of the interest in being free from another's negligence, and here the complaints pleaded neither physical impact nor the violation of a cognizable legally protected right.
We conclude that the trial courts erred. Accepting the allegations of the complaints as true, defendants’ negligence resulted in a violation of plaintiffs’ legally protected interest in their privacy—specifically an employee's right not to be video recorded while using what is supposed to be a private employee restroom. We therefore reverse and remand.
On review of a decision to dismiss under ORCP 21 A(8), we accept as true the facts alleged in the complaint and draw all reasonable inferences from those allegations in plaintiffs’ favor. McLaughlin v. Wilson , 365 Or. 535, 537, 449 P.3d 492 (2019).
Defendant Johnny Tuck Chee Chan was a licensed pharmacist who worked at a Kaiser Permanente pharmacy. During his employment there, he secretly video recorded other employees using the store's restroom. In November 2017, Kaiser discovered Chan's secret recording and fired him. Police commenced an investigation of Chan, as did the Oregon Board of Pharmacy.
In the meantime, in May 2018, defendant Banana Republic's general manager, Teri Turner, hired Chan to work as a sales associate at its Cascade Station store. Chan once again secretly placed a camera in the store's employee restroom and recorded employees in a state of undress while using the restroom.
In November 2018, after a year-long investigation, police arrested Chan in connection with his recording of more than 50 people at the Kaiser pharmacy restroom. A few weeks later, Chan was charged with recording 27 Banana Republic employees as well.
Plaintiff I. K., an 18-year-old Banana Republic employee working at the Cascade Station store, was among those whom Chan secretly recorded. When she learned that Chan had secretly recorded her using the restroom, she experienced significant mental and emotional pain and suffering. Plaintiff C. K., another Banana Republic employee, learned that she, too, had been recorded while using the restroom and experienced significant mental and emotional pain and suffering.
In addition to suing Chan, I. K. initiated an action for negligence against Banana Republic and Turner. She alleged that defendants were negligent in hiring and retaining Chan because they should have known that he had been fired from Kaiser for secretly recording employees using the restroom. C. K. initiated a separate action against defendants for negligent hiring and retention on the same grounds, also alleging that she suffered significant mental and emotional pain and suffering.
In both cases, defendants moved to dismiss the negligent hiring and retention claims under ORCP 21 A(8) for failure to state a claim. They argued that Oregon law does not recognize a claim for negligent infliction of emotional distress in the absence of allegations of physical impact or an applicable exception to the physical impact requirement. In neither complaint, they argued, is there an allegation of physical impact. Moreover, defendants argued, no exception to the physical impact rule applies. Plaintiffs argued that, in fact, their cases are subject to a recognized exception to that general rule. In this case, they argued, invasion of privacy is a crime, and the persons in charge of the premises where plaintiffs worked were responsible—apart from the duty to avoid foreseeable risks of harm—for protecting against such crimes. In both cases, the trial courts agreed with defendants and entered a limited judgment dismissing the claim.
On appeal, plaintiffs argue that the trial courts erred in dismissing their claims for emotional distress caused by defendants’ negligent hiring and retention. According to plaintiffs, even if a person has not been physically harmed, that person may recover damages for emotional distress when the defendant's conduct violates an independent legally protected interest. Plaintiffs acknowledge that, to date, the Oregon appellate courts have not directly ruled on the question whether there is such an independent interest in the circumstances of these cases. Plaintiffs nevertheless contend that we "should recognize a legally protected interest in being free from the serious emotional distress caused by negligent invasions of the right not to be secretly video recorded while using a private restroom at work." They argue that such an interest is inherent in case law recognizing a common-law right to privacy as well as statutes making it a crime to video record a person in a state of undress in any place where the person has a reasonable expectation of privacy and authorizing a civil action for damages for the same conduct. They further contend that, because there are few places where a person has a greater expectation of privacy than a restroom, the violation of that privacy warrants protection from any emotional distress that results.
Defendants argue that the trial court did not err in dismissing plaintiffs’ claims. They do not contest that negligent hiring and supervision may give rise to a claim for damages generally. They assert only that such negligent hiring and supervision does not, as a matter of law, give rise to a claim for damages for emotional distress.
In reviewing the trial courts’ decision to dismiss plaintiffs’ claims, our task is to determine whether, viewing the allegations of the complaint in the light most favorable to plaintiffs, they have failed to state a claim as a matter of law. Hernandez v. Catholic Health Initiatives , 311 Or. App. 70, 72, 490 P.3d 166 (2021).
Under Oregon law, a plaintiff who has suffered emotional distress as a result of a defendant's negligence ordinarily may not recover damages for such emotional harm in the absence of some sort of physical impact. Norwest v. Presbyterian Intercommunity Hosp ., 293 Or. 543, 558-61, 652 P.2d 318 (1982). There is an exception to that general rule when the defendant violated a "legally protected interest" independent of the plaintiff's interest in being free from negligent conduct. Id . at 559, 652 P.2d 318. If a plaintiff establishes a negligence claim based on the violation of such an independent legally protected interest, "then, generally speaking, the pain for which recovery is allowed includes virtually any form of conscious suffering, both emotional and physical" that foreseeably resulted from the violation. Tomlinson v. Metropolitan Pediatrics, LLC , 362 Or. 431, 452, 412 P.3d 133 (2018) (internal quotation marks omitted).1
In Philibert v. Kluser , 360 Or. 698, 385 P.3d 1038 (2016), the Supreme Court set out the framework for determining the existence of a "legally protected interest," the violation of which may support a claim for negligent infliction of emotional distress. The court said that a "legally protected interest" is "an independent basis of liability separate from the general duty to avoid foreseeable risk of harm." Id . at 704, 385 P.3d 1038. The court added that not just any legally protected interest will suffice to support a claim for negligent infliction of emotional distress. The interest must be "of sufficient importance as a matter of public policy to merit protection from emotional impact." Philibert , 360 Or. at 705, 385 P.3d 1038. As an example, the court explained that, while the law recognizes a right of privacy, the invasion of that right will not always support a claim for emotional distress, "because the nature and context of the invasion influences the extent to which privacy is legally protected and can be the basis for a successful emotional distress claim." id . In addition, the court explained, the emotional distress must have been a foreseeable result of violation of the legally protected interest. Id .
The analysis of a claim for negligent infliction of emotional distress thus proceeds in three steps: First, we must determine whether the complaint alleges the violation of a legally protected interest. Second, we must determine whether such interest is of sufficient importance as a matter of public policy to merit protection from...
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