Simpson v. Oil Transfer Corporation

• Decision Date: 13 January 1948
• Citation: 75 F. Supp. 819
• Parties: SIMPSON v. OIL TRANSFER CORPORATION.
• Court: U.S. District Court — Northern District of New York

75 F. Supp. 819

SIMPSON v. OIL TRANSFER CORPORATION.

District Court, N. D. New York.

January 13, 1948.

Spira & Hershkowitz, of Schenectady (L. W. Spirs, of Schenectady, of counsel), for plaintiff.

Maynard & O'Connor, of Schenectady (G. W. O'Connor, of Schenectady, of counsel), for defendant.

Nathaniel L. Goldstein, Atty. Gen., of N. Y., for Francis R. Curran, of Poughkeepsie, amicus curiæ.

BRENNAN, District Judge.

Defendant moves to dismiss the complaint herein under the provisions of Federal Rules of Civil Procedure, rule 12(b) (6), 28 U.S.C.A. following section 723c. The basis of the motion is that the complaint fails to state a claim upon which relief can be granted.

The action originated in the Supreme Court of the State of New York and was removed to this Court because of the diversity of citizenship of the parties involved. It is an action in tort, based upon defamations alleged to have been spoken and written by the defendant of and concerning the plaintiff. The facts as they appear upon this motion may be concisely stated as follows.

Plaintiff was employed by the defendant as a master mariner from about July 1, 1945, through October 23, 1945, when such employment was terminated at the instance of the defendant. A letter was given to plaintiff by the defendant at or about that time, the contents of which is not set forth in the complaint, but which apparently failed to recommend the plaintiff for efficiency of service, and merely stated that he was employed as above set forth, or "put in his time" during that period. Later the plaintiff made application for unemployment insurance benefits claimed to be due him under the laws of the State of New York, and defendant was requested in writing by the representatives of the Labor Department to advise in some detail as to the reason for the termination of the employment as above stated. The defendant replied to such request in three separate letters. Certain statements taken from the letters are set forth in paragraphs "Twenty-Fifth" and "Twenty-Sixth" of the complaint. They are as follows: "employee was not working to its satisfaction and was disobeying orders," "that a discrepancy in the vessel's expense was found," "the employer suffered a loss which it was willing to forget," "we also found a discrepancy in his vessel expense account which money is furnished for vessel and food."

The complaint alleges that the quotations taken from the letters sent by the defendant to the Labor Department were false and libelous and tended to injure the plaintiff in his profession.

The importance of this motion arises out of the fact that, as alleged in the complaint, the parties hereto are subject to certain provisions of the Labor Law of the State of New York, Consol.Laws, c. 31, which provides in Section 537 that information acquired from employers or employees shall be for the exclusive use and information of the Commissioner in the discharge of his duties, and shall not be open to the public nor used in any court in any action or proceeding pending therein, unless the Commissioner is a party to such action. It further provides that any officer or employee of the state who, without the authority of the Commissioner or the requirement of law, shall disclose such information shall be guilty of a misdemeanor. Section 592(2) provides in substance that where an employee has lost his employment through misconduct, his unemployment benefit rights shall be suspended for a period of seven weeks.

The Industrial Commissioner has been given the power to make rules and regulations in the administration of the law. He has provided in Regulation No. 28 that every employer shall upon request submit to the office of the division of placement and unemployment insurance, where a claim for benefits is filed by an employee, a statement giving the date of and reasons for his separation from service; such information to be furnished within four days of the receipt by the employer of a request therefor. The Penal Law of the State of New York, Consol.Laws, c. 40, § 1275, provides that any person who violates any of the regulations of the Industrial Commissioner or fails to comply therewith shall be guilty of a misdemeanor, and subject to punishment.

Here an employee is discharged. He makes application for benefits. In order to act upon the application, information is requested from his former employer. The employer under the compulsion of law complies with the request.

The real question here is the determination of the sufficiency of a cause of action based upon a writing filed with a state administrative agency in pursuance to statute where it is provided by law that such writing is secret, and shall not be used in any court. The determination of the question is of vital interest to the State of New York, and the Attorney General has filed a brief upon this motion. In fact, it is important throughout the United States, since most of the states have similar unemployment insurance laws and similar regulations affecting the administration thereof.

The defendant urges that the writings referred to in the complaint are absolutely privileged, and that to hold otherwise would be to subject it to criminal proceedings in the state courts, or to expose it to a civil action in the event that the information furnished reflected upon the character or ability of the employee. The State of New York takes a similar position. The plaintiff claims that if a privilege exists at all, it is limited in its nature, and that actual malice would destroy the privilege.

This motion must be decided in accordance with the laws of the State of New York.

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