Mott v. Anheuser-Busch, Inc.

• Decision Date: 29 December 1995
• Docket Number: No. 90-CV-1047.,90-CV-1047.
• Citation: 910 F. Supp. 868
• Parties: Lyndi W. MOTT, Plaintiff, v. ANHEUSER-BUSCH, INCORPORATED and Walter A. Suhre, Jr., Defendants.
• Court: U.S. District Court — Northern District of New York

910 F. Supp. 868

Lyndi W. MOTT, Plaintiff, v. ANHEUSER-BUSCH, INCORPORATED and Walter A. Suhre, Jr., Defendants.

No. 90-CV-1047.

United States District Court, N.D. New York.

December 29, 1995.

D'Arrigo Law Offices, Liverpool, New York, for Plaintiff; Mario D'Arrigo, of counsel.

Gibson, Dunn & Crutcher, New York City, for Defendants; Robert D. Sack, Mary P. Donlevy, of counsel.

Hancock & Estabrook, Syracuse, New York, for Defendants; Walter L. Meagher, Jr., of counsel.

MEMORANDUM-DECISION AND ORDER

MUNSON, Senior District Judge.

This is a suit for defamation and wrongful termination arising out of plaintiff's former employment as the supervisor of a wastewater treatment laboratory located at Anheuser-Busch's brewery in Baldwinsville, New York ("treatment plant" or "plant"). Plaintiff's claims for relief stem from the circumstances attendant to Anheuser-Busch's public announcements that three of its employees (one of whom, though remaining unnamed in the announcements, was plaintiff) had engaged in illegal conduct at the treatment plant, that the employees' activity had been undertaken without the knowledge of other corporate officials, and that the employees had been terminated following an internal investigation. Presently before the court is defendants' motion for summary judgment on all counts. Defendants argue first that plaintiff's wrongful termination claims should be dismissed because plaintiff was terminable at-will, and second that plaintiff's defamation claims should be dismissed because plaintiff cannot establish that defendants' actions in conducting and reporting the results of its internal investigation were grossly irresponsible. The court heard oral argument in Syracuse, New York on May 12, 1995.

BACKGROUND

On February 6, 1989, the Syracuse Post-Standard reported claims by a former Anheuser-Busch employee that other employees at the Baldwinsville treatment plant were falsifying reports to the New York State Department of Environmental Conservation ("DEC"). See Exhibit ("Exh.") C, attached to Meagher Affidavit, Document ("Doc.") 31. In response to this allegation Anheuser-Busch, through its General Counsel Walter Suhre, initiated an internal investigation. The investigation revealed that plant supervisory employees had engaged in an ongoing program of taking and reporting misrepresentative samples of the plant's effluent, resulting in false reports to the DEC that the treatment plant was in compliance with its State wastewater permit.

The investigation specifically found that personnel were guilty of: (i) pre-testing plant effluent for phosphorous to see if results of a sample taken at that time would meet State standards, while refraining from sampling when they knew the samples would show impermissibly high phosphorus levels; (ii) treating the wastewater with alum, a phosphorus-reducing chemical, immediately before and in conjunction with taking samples for purposes of reporting phosphorus content to the State, thereby artificially reducing the phosphorus values reported; (iii) taking required samples immediately after "alum-dosing" on consecutive Saturdays and Sundays, using the Saturday result as the sample for the preceding week and the Sunday result as the sample for the following week, thereby giving a deliberately false view of the general phosphorus levels of the effluent; and (iv) using hoses to bypass part of the wastewater treatment system.

The Anheuser-Busch investigation concluded that four treatment plant officials knew about, were responsible for, or participated in these activities: the Manager of Environmental Operations, Richard Moore; his subordinate, the manager of the wastewater treatment plant, Robert Cordell; a laboratory supervisor, plaintiff Lyndi Mott; and her predecessor, Ann Marie Meehan. As a result, Moore and Cordell were terminated, plaintiff resigned, and Meehan was reprimanded.

The results of the investigation were summarized in a 56-page report submitted by Anheuser-Busch to the DEC in April, 1989. In connection with these events, the State brought civil charges against Anheuser-Busch for violations of its State Pollutant Discharge Elimination System ("SPDES") permits. In September, 1989, Anheuser-Busch settled these charges by signing, together with the DEC and the New York Attorney General, an order on consent that included paying a $925,000 penalty to the State. See Order on Consent, Exh. G, attached to Meagher Affidavit, Doc. 31. Later, on September 13, 1989, Anheuser-Busch pleaded guilty to three misdemeanor counts for violation of the SPDES permits, and consented to an additional fine of $75,000. See Transcript of Sentencing, Exh. H, attached to Meagher Affidavit, Doc. 31. As part of the plea agreement Anheuser-Busch and all its officers and employees other than Moore, Cordell, and plaintiff were released from further civil or criminal exposure. Id. The State's criminal investigation for environmental and related violations remained open as to Moore, Cordell, and plaintiff. Id.

On September 14, 1989, Anheuser-Busch officials held a press conference at which defendant Suhre issued a news release. Suhre read aloud, in pertinent part, as follows:

Anheuser-Busch, Inc. has agreed to pay $75,000 in fines and $925,000 in civil penalties to settle issues with the State of New York relating to the operations of the company's Baldwinsville brewery wastewater treatment facility.

These issues center around actions by three employees at the treatment plant, undertaken without the knowledge of their supervisors and contrary to company policies. The company immediately began an internal investigation after learning of possible problems through a newspaper account, which was based on allegations made by a former employee at the wastewater treatment plant.

....

The company has taken steps to correct the problems and ensure that they will not occur again. Two of the employees were dismissed and the third resigned. Anheuser-Busch voluntarily supplied the New York Department of Environmental Conservation with a full report of the company's investigation.

Although the company did not have prior knowledge of the actions of these three individuals, it is legally responsible for the on-the-job activities of its employees. Therefore, Anheuser-Busch agreed to the present settlement.

News Release, Exh. J attached to Meagher Affidavit, Doc. 31. The news release was initially drafted by Anheuser Busch's public relations firm. It was revised and redrafted several times by various employees of Anheuser-Busch, including Suhre.

In response to questions at the press conference, Suhre is alleged to have stated that:

Nobody in St. Louis knew that that plant was not being operated the way it was supposed to;

Our investigation left no stone unturned and nobody above Moore could have known what was going on;

We are convinced without question that knowledge of what went on, and participation of what went on was limited to senior management at the wastewater treatment plant.

These statements were allegedly published in various media. See Amended Complaint, Doc. 7, at 10-11.

On September 17, 1989, the Syracuse Herald-American published an editorial entitled "Pollution Problems; Brewery Tries to Shift Blame," which accused Anheuser-Busch of engaging in a deliberate cover-up at the treatment plant by "shifting the blame onto its former workers to distance its good name from the whole affair." See Defendants' ("Def.") Memorandum ("Mem.") of Law in Support of Their Motion for Summary Judgment, Doc. 30, at 21. In response to this editorial, defendant Suhre, on behalf of Anheuser-Busch, submitted to the Herald-American a letter to the editor that had been initially drafted by Anheuser-Busch's public relations firm. The letter, published on September 24, 1989, contained statements that Senior Anheuser-Busch management had no prior knowledge of wrongdoing at the Baldwinsville plant and that the violations had been committed by three plant employees who were terminated following the internal investigation. Letter to the Editor, Exhs. 262 and 338, attached to Mott Affidavit, Doc. 41. Again, plaintiff was not named in any of the statements.

On October 15, 1989, the Herald-American published an article relating to the settlement between Anheuser-Busch and the DEC. The newspaper stated that senior executives of Anheuser-Busch knew of the illegal dumping into the Seneca River. The article quoted defendant Suhre as stating that "nobody in St. Louis knew that that plant was not being operated the way it was supposed to." The article contrasted Suhre's comment with the prosecutor's contention that "the knowledge of the hose connection was at the highest levels both at the brewery and in St. Louis." Article, Exh. K, attached to Meagher Affidavit, Doc. 31.

On October 16, 1989, the St. Louis Post-Dispatch reported the claims contained in the Herald-American article of the previous day. The Post-Dispatch article quoted defendant Suhre as stating in response to the accusations that "we're denying senior officials knew that that system in New York was being operated other than in accordance with a permit or law." Suhre was further quoted as stating that "we were duped by a scheme that was fraudulent and clandestine." See Amended Complaint, Doc. 7, at 16-17. The article reported that although Suhre admitted that one or more environmental engineers in St. Louis "may have known" about the hoses, he claimed that "they clearly did not know the effect of the use of the hoses." Def.'s Mem. of Law, Doc. 30, at 23. Moreover, he stated that "senior management did not know." According to Suhre, "no one in St. Louis knew" about two other related violations at the plant. See Amended Complaint, Doc. 7, at 16-17.

DISCUSSION

A. Summary Judgment Standards

The principles this court must apply in analyzing the current motion for summary judgment are well established. Under Rule 56(c) of the Federal Rules of...