Torain v. Clear Channel Broadcasting, Inc.

• Decision Date: 01 September 2009
• Docket Number: No. 06 Civ. 7012(PKL).,06 Civ. 7012(PKL).
• Citation: 651 F.Supp.2d 125
• Parties: Troi TORAIN, Plaintiff, v. CLEAR CHANNEL BROADCASTING, INC., Defendant. Clear Channel Broadcasting, Inc., Counter-Claimant, v. Troi Torain, Counter-Defendant.
• Court: U.S. District Court — Southern District of New York

651 F.Supp.2d 125

Troi TORAIN, Plaintiff, v. CLEAR CHANNEL BROADCASTING, INC., Defendant.

Clear Channel Broadcasting, Inc., Counter-Claimant, v. Troi Torain, Counter-Defendant.

No. 06 Civ. 7012(PKL).

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

September 1, 2009.

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Cinque & Cinque, P.C., James P. Cinque, Esq., New York, NY, for Troi Torain.

Wilson Sonsini Goodrich & Rosati, Marina C. Tsatalis, Esq., Amy K. Todd, Esq., Erin W. Doyle, Esq., New York, NY, for Clear Channel Broadcasting, Inc.

OPINION AND ORDER

LEISURE, District Judge.

In this diversity case, plaintiff Troi Torain ("Torain") brings suit against Clear Channel Broadcasting, Inc. ("Clear Channel") for breach of contract, breach of implied covenant of good faith and fair dealing, and violations of New York Labor Law. Clear Channel asserts counterclaims against Torain, alleging breach of contract and contractual indemnification. Currently pending before the Court is (i) Clear Channel's motion for summary judgment seeking dismissal of Torain's complaint; (ii) Clear Channel's motion for summary judgment on its contractual indemnity claim; and (iii) Torain's motion for summary judgment seeking dismissal of Clear Channel's contractual indemnity claim. For the reasons set forth below, Clear Channel's motion for summary judgment on plaintiff's complaint is GRANTED, and the parties' motions for summary judgment on Clear Channel's contractual indemnity claim are DENIED.

BACKGROUND

I. Torain's Employment and Termination with Clear Channel

Torain is a radio host/personality, professionally known as "Star." (Decl. of Troi Torain in Opp'n to Clear Channel's Mots. For Summary Judgment, sworn to on Nov. 2, 2007, ("Torain Decl.") ¶ 1.) The parties agree that Torain was considered an edgy and provocative on-air radio personality when he was hired by Clear Channel to host his morning show "Star & Buc Wild" on Clear Channel's radio stations. (Id. ¶ 2; Def.'s Mem. 3.)¹ In connection with Torain's employment with Clear Channel, on or about March 25, 2004, Torain and Clear Channel entered into a written contract (the "Employment Agreement" or the "contract").²

Pursuant to the Employment Agreement, Torain was to be employed by Clear channel from March 29, 2004 to March 28, 2007. (Employment Agreement § 3.) However, Torain's employment with Clear Channel ended on May 10, 2006 when Clear Channel terminated Torain for his on-air statements about Raashaun Casey, his wife, Gia Casey, and their four year-old daughter. (See Todd Decl. Ex. E.) Raashaun Casey was also a radio personality, with a radio show broadcasted on another radio station opposite Torain's program. (See Def.'s Mem. 1 n. 2; Aff. of Gia Casey in Support of Def. Clear Channel Broadcasting Inc.'s Mots. For Summary Judgment, sworn to on Sept. 27, 2007 ("Casey Aff.") ¶¶ 3-5.) The Court deems it unnecessary to detail all of the comments Torain made about the Caseys during the relevant time period. It suffices to say that Torain made sexually explicit comments and racial slurs regarding Mr. and Mrs. Casey, as well as on-air comments concerning sexual relations with the Caseys' daughter, who was four years old at the time. The parties do not dispute the substance of Torain's comments about the Caseys and their daughter. Rather, the parties primarily dispute whether such statements rise to the level of a terminable offense under the cause provisions in the Employment Agreement. The parties also disagree as to which provisions in the Employment Agreement this Court can consider in determining whether Torain's termination violated the Employment Agreement. While Clear Channel contends that it had grounds to terminate Torain under numerous provisions of the Employment Agreement (see Def.'s Mem. 5-6), plaintiff and plaintiff's manager, Wyatt Cheek, aver that the parties' negotiations and pre-contract discussions make clear that many of the provisions Clear Channel now relies upon were inapplicable to on-air statements. (See Decl. of Wyatt Cheek in Opp'n to Clear Channel's Mots, for Summary Judgment, sworn to on Nov. 2, 2007 ("Cheek Decl.") ¶¶ 7-11, 24-28; Torain Decl. ¶¶ 6-7, 13.). Plaintiff also contends that Clear Channel did not have grounds to terminate Torain for cause based upon the pre-contract statements of John Hogan, Clear Channel's CEO, to Congress as to Clear Channel's indecency policies and procedures. (See Cheek Decl. ¶¶ 10-12, 14; Torain Decl. ¶¶ 10-13.)

Section 6 of the Employment Agreement governs the circumstances under which the Employment Agreement, and thus Torain's employment, could be terminated. Pursuant to the contract, if Torain was terminated without cause, Clear Channel would be obligated to pay Torain's salary and benefits through the date of termination, plus "an amount equal to the remainder of [Torain's] base salary ... through and including March 28, 2007 ... only if [Torain] agrees to and signs a general release prepared by [Clear Channel]." (Employment Agreement § 6(e).) However, if the termination was with cause, Torain is only entitled to unpaid earned base salary and any benefits earned through the termination date. (Id. § 6(d).)

Section 6(c) of the Employment Agreement defines the circumstances that can constitute a for cause termination. The provisions of Section 6(c) relevant to this dispute include:

(i) failure, neglect, refusal, or nonperformance, at any time, of [Torain's] duties or obligations set forth in this Agreement or a breach by [Torain] (confirmed in writing) of this Agreement, as determined by the Company in its sole discretion;

(iii) willful misconduct, or violation of any Company policy provided that [Torain] had prior written notice (made known to [Torain] on the Clear Channel Resource Center Website or otherwise);

(iv) an act(s) or failures to act which in any manner threatens the qualification of [Clear Channel] or its affiliates to maintain a broadcast license issued by the FCC, or which results in a violation of any rule or regulation of the Federal Communications Commissions including but not limited to any utterance on the air that is obscene, indecent, or profane as determined and acknowledged in writing by [Clear Channel] or a court, upon review of a ruling from the FCC;

(v) making disparaging oral or written statements regarding [Clear Channel] or any affiliated company and including, without limitation, its or their officers, shareholders or management team, clients, sponsors or advertisers, or [Torain] acting in a tortious manner toward another employee, listener, client, sponsor or advertiser;

(vii) any conduct, on or off duty, which in the opinion of [Clear Channel] reflects unfavorably upon [Clear Channel] (including any radio or television broadcasting station owned or operated by [Clear Channel], its parent or subsidiary corporations or their advertisers) provided [Torain] is aware of such affiliation, brings [Torain] into disrepute or causes scandal or discredits [Clear Channel];

(Id. § 6(c).)

Also relevant to the instant dispute is Section 7(b) of the Employment Agreement, which provides:

[i]f [Clear Channel] has reason to believe [Torain] uttered obscene, indecent, or profane program content on the air in violation of any law or FCC regulation or rule (e.g., without limitation, through an FCC Notice of Apparent Liability or otherwise), the Company shall, at its sole discretion, suspend [Torain] while reviewing the program in question.... [Clear Channel] may, at its sole discretion, terminate [Torain] for cause as set forth in Section 6 if the program content was obscene, indecent, profane or otherwise in violation of the law, FCC regulations, or Company's policy or directives, as determined by (i) the Company, or (ii) a court upon review of a ruling from the FCC. The Company's policies or directives will be communicated to [Torain] in writing, through training, or on the Clear Channel Resource Center website.

(Id. § 7(b).) In connection with the contractual provisions related to the Federal Communications Commission ("FCC"), it is undisputed that the FCC issued a letter dated April 13, 2007 advising Clear Channel that the FCC was investigating Torain's May 2006 on-air comments. (Pl.'s Counter 56.1 ¶ XX; Def.'s Reply 56.1 ¶ XX.) The parties also agree that the FCC had not issued a Notice of Apparent Liability, nor did any court issue an opinion that Torain violated an FCC rule or regulation. (Id. ¶¶ YY, ZZ.) In fact, it is now clear that the time has expired for the FCC to issue a Notice of Apparent Liability. (See Letter from James P. Cinque, Esq. to Hon. Peter K. Leisure, dated August, 3, 2009, ("Cinque Letter"), Docket No. 97.)³

It is undisputed that, in addition to the Employment Agreement, Torain was aware of, and received training concerning, Clear Channel's Responsible Broadcasting Initiative ("RBI"). (Def.'s 56.1 ¶¶ 11-15; Pl.'s Counter 56.1 ¶¶ 11-15; see also Torain Decl. Ex. C.)⁴ Clear Channel's RBI explains what is considered "indecent" material by the FCC, and that "indecent" material can only be broadcast between 10 p.m. and 6 a.m.—the Safe Harbor period. (Torain Decl. Ex. C. at 2; Def.'s 56.1 ¶ 13.) In particular, the RBI defines indecency as including "[l]anguage and material that, in context, depicts or describes, in terms patently offensive as measured by contemporary community standards for the broadcast medium, sexual or excretory organs or activities." (Torain Decl. Ex. C. at 2; Def.'s 56.1 ¶ 14.) The RBI guides employees to seek guidance and clarification "over what seems to be `gray areas'." (Torain Decl. Ex. C. at 5; see also Def.'s 56.1 ¶ 15.) Finally, according to the RBI, an employee will not necessarily be immediately terminated after the FCC issues a Notice of Apparent Liability. (Torain Decl. Ex. C. at 5.) Rather, after receiving a Notice of Apparent Liability, Clear Channel would take the...