R. H. Bouligny, Inc. v. United Steelworkers of America, AFL-CIO, AFL-CIO

• Decision Date: 03 May 1967
• Docket Number: No. 285,AFL-CIO,285
• Citation: 270 N.C. 160,154 S.E.2d 344
• Parties: , 65 L.R.R.M. (BNA) 2886 R. H. BOULIGNY, INC., a corporation, v. UNITED STEELWORKERS OF AMERICA,, an unincorporated association.
• Court: North Carolina Supreme Court

Page 344

154 S.E.2d 344

270 N.C. 160, 65 L.R.R.M. (BNA) 2886

R. H. BOULIGNY, INC., a corporation, v. UNITED STEELWORKERS OF AMERICA, AFL-CIO, an unincorporated association.

No. 285.

Supreme Court of North Carolina.

May 3, 1967.

Cooper, Mitch, Johnston & Crawford, Birmingham, Ala., and James B. Ledford, Charlotte, for defendant appellant.

Grier, Parker, Poe & Thompson by Joe W. Grier, Jr., and Gaston H. Gage, Charlotte, for plaintiff appellee.

LAKE, Justice.

This action was instituted 29 May 1963. Thereupon, the defendant filed a petition for its removal to the United States District Court upon the ground of diversity of citizenship and also upon the ground that the subject matter of the action arises under the laws of the United States. The plaintiff moved to remand. The District Court denied the motion. The Court of Appeals reversed, saying, 'Having found no diversity, we also think that no federal question jurisdiction exists.' R. H. Bouligny, Inc., v. United Steel Workers of America, 4 Cir., 336 F.2d 160. On certiorari, the Supreme Court of the United States affirmed, 382 U.S. 145, 86 S.Ct. 272, 15 L.Ed.2d 217, and the action was remanded to the Superior Court of Mecklenburg County. Thereupon, the defendant filed its answer, the plaintiff filed its motions and demurrers and the superior court entered the order which gives rise to the questions now before us, four years having thus been consumed without any determination as to whether the alleged statements were made or, if so, were true or false, malicious or in good faith, or whether the plaintiff was damaged thereby.

For the purpose of determining the validity of the order from which this appeal is taken, we assume that the allegations of fact in the complaint, as distinguished from conclusions of law, are true. We also assume that the affirmative allegations of fact in the several further answers, as distinguished from conclusions of law and from denials of facts alleged in the complaint, are true. Wachovia Bank & Trust Co. v. Currin, 244 N.C. 102, 92 S.E.2d 658. The questions for us are whether, on these assumptions, the allegations struck from the further answers constitute, or are germane to, a valid and sufficient defense to the cause of action, if any, alleged in the complaint. In search of the solution to those questions, we turn first to the law of this State and then to the Constitution and laws of the United States to ascertain what, if any, effect they have upon the law of North Carolina otherwise applicable.

An unincorporated labor union may be sued in the courts of this State as a legal entity separate and apart from its members. G.S. § 1--69.1; G.S. § 1--97(6); Gainey v. Local 71, International Brotherhood of Teamsters, Chauffeurs, etc., 252 N.C. 256, 113 S.E.2d 594; Martin v. Local 71 International Brotherhood of Teamsters, Chauffeurs, etc., 248 N.C. 409, 103 S.E.2d 462; J. A. Jones Construction Co. v. Local Union 755 of the International Brotherhood of Electrical Workers, 246 N.C. 481, 98 S.E.2d 852; Stafford v. Wood, 234 N.C. 622, 68 S.E.2d 268. As such, it may be held liable in damages for torts committed by its employees or agents acting in the course of their employment. See Overnite Transportation Co. v. International Brotherhood of Teamsters, Chauffeurs, etc., 257 N.C. 18, 31, 125 S.E.2d 277, cert. den., 371 U.S. 862, 83 S.Ct. 120, 9 L.Ed.2d 100.

The right of a private business corporation to sue for damages for slander or libel does not appear to have been determined by this Court. It has, however, been considered in other jurisdictions and the right of the corporation to sue appears well settled. 33 AM JUR, Libel and Slander, § 193; 53 C.J.S., Libel and Slander, § 146; Annot. 86 A.L.R. 442; Annot. 52 A.L.R. 1199; Restatement of the Law, Torts, § 561. Obviously, a corporation may not suffer mental anguish or an injury to personal reputation. It may, however, be injured in its credit, in its business good will, or in its relations with its employees. When so injured, its corporate nature is not a bar to its recovery of damages from the wrongdoer.

The complaint alleges that the statements alleged to have been published by the defendant 'injured the good name and reputation' of the plaintiff, and 'injured the relations between the plaintiff and its employees' in the total amount of $100,000. At the trial of the action, the plaintiff will have the burden of proving both the nature and the extent of its injuries. For the purposes of this appeal, it is sufficient to note that it has alleged injuries which a corporation is capable of sustaining.

The complaint alleges the defendant published statements asserting that 'the plaintiff's representative' did certain things. Of course, a corporation may not maintain an action for damages for libel or slander of its stockholders, officers, employees or representatives. 53 C.J.S., Libel and Slander, § 146; Annot., 52 A.L.R. 1199. However, the fair interpretation of the complaint is that the statements alleged to have been published by the defendant were such, in words and context, that the reader would impute to the plaintiff the alleged conduct of its representative, and thus the plaintiff's own reputation and relations with its employees were damaged. The burden will rest upon the plaintiff at the trial of the action to prove that it, as distinguished from its representative, was libeled by the publications of which it complains.

In Kindley v. Privette, 241 N.C. 140, 84 S.E.2d 660, Bobbitt, J., speaking for the Court, said:

"The publication of any libel is actionable per se, that is irrespective of whether any special harm has been caused to the plaintiff's reputation or otherwise. Such a publication is itself an injury * * * and therefore a sufficient ground for recovery of at least nominal damages.' Restatement of the Law, Torts, sec. 569.

'The phrase 'libelous per se,' used extensively, has been criticized as inexact. * * * While this phrase appears in our decisions, the words are used in the sense of actionable per se. Flake v. Greensboro News Co., 212 N.C. 780, 195 S.E. 55.'

In Flake v. Greensboro News Co., supra, Barnhill, J., later C.J., speaking for the Court, said:

'Libels may be divided into three classes: (1) Publications which are obviously defamatory and which are termed libels per se; (2) publications which are susceptible of two reasonable interpretations, one of which is defamatory and the other is not, and (3) publications which are not obviously defamatory, but which become so when considered in connection with innuendo, colloquium and explanatory circumstances. This type of libel is termed libel per quod.

'When an unauthorized publication is libelous per se, malice and damage are presumed from the fact of publication and no proof is required as to any resulting injury. The law presumes that general damages actually, proximately and necessarily result from an unauthorized publication which is libelous per se and they are not required to be proved by evidence since they arise by inference of law, and are allowed Whenever the immediate tendency of the publication is to impair plaintiff's reputation, although no actual pecuniary loss has in fact resulted.' (Emphasis supplied.)

It is to be remembered that the above cases dealt with libel of an individual. A false statement concerning a corporation, which is, by its very nature, incapable of mental suffering or loss of social relationships, is not actionable unless 'the immediate tendency of the publication is to impair plaintiff's reputation' in its business relationships, or actual pecuniary loss is alleged and proved. Here, the natural and immediate tendency of the alleged statements, if in fact made, would be to cause actual damage to the relationship between the plaintiff and its employees, an important asset of any business corporation. Thus, nothing else appearing, the statements, if in fact published and false, would be actionable per se.

In Jones v. Hester, 262 N.C. 487, 137 S.E.2d 846, the jury found that the defendant had published the libelous statement in question and had done so with actual malice. It awarded $1.00 in actual damages and $1.00 in punitive damages. In sustaining the denial of a motion to set aside the verdict on the issues as to actual and punitive damages, this Court said:

'The verdict on Issue No. 1 (publication of the libel) entitled the plaintiff to nominal damages. Any further compensatory damages (other than nominal) could be awarded only upon the basis of proof, by the greater weight of the evidence. The answer to Issue No. 2 (malice) permitted the jury to award punitive damages in its discretion, not as a matter of right, but as punishment for intentional wrongdoing.'

Thus, even though the alleged statements were published by the defendant, were not privileged, were false and had a natural and immediate tendency to impair the plaintiff's reputation in the areas of its customer or employee relations, the plaintiff can recover, under the law of this State, as compensatory damages, only a nominal amount in absence of proof of both the fact and the extent of damages actually suffered by it as the result of the publications. It can recover punitive damages only if it proves that the publications were made with actual malice, Roth v. Greensboro News Co., 217 N.C. 13, 6 S.E.2d 882, and, even in that event, the amount awarded may not be excessively disproportionate to the circumstances. Cotton v. Fisheries Products Co., 181 N.C. 151, 106 S.E. 487.

A libelous statement, otherwise actionable, may be not so for the reason that the circumstances under which the statement was published confer upon the publisher a privilege to publish it. 'The great underlying principle of the doctrine of privileged communications rests in public policy.' Alexander v. Vann, 180 N.C. 187, 104 S.E. 360. The basis of privilege is the public interest in the free expression and communication of ideas....