Matthews v. Storgion , 174 F. App'x 980 ( 2006 )

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 06a0267n.06
Filed: April 17, 2006
Nos. 05-5219; 05-5220
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
LAMARQUIST MATTHEWS, et al., )
)
Plaintiffs-Appellees, )
)
v. )
)
STEPHANIE A. STORGION, M.D., et al., )
) ON APPEAL FROM THE UNITED
Defendants, ) STATES DISTRICT COURT FOR THE
) WESTERN DISTRICT OF TENNESSEE
STATE VOLUNTEER MUTUAL )
INSURANCE COMPANY, )
)
Defendant-Appellant [05-5219], )
)
TERESA J. SIGMON; SIGMON LAW FIRM, )
)
Defendants-Appellants [05-5220]. )
Before: CLAY and COOK, Circuit Judges; RICE, District Judge.*
COOK, Circuit Judge. This suit stems from a state-court medical-malpractice case brought
by the guardian of a minor, LaMarquist Matthews, against Dr. Stephanie Storgion, alleging injuries
from the negligent placement of a catheter. In the course of that litigation, Storgion’s attorney,
Teresa Sigmon, allegedly pressured one of Matthews’s expert witnesses to withdraw from testifying.
*
The Honorable Walter Herbert Rice, Judge of the United States District Court for the
Southern District of Ohio, sitting by designation.
Nos. 05-5219; 05-5220
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Matthews then brought this case against the doctor, the defense lawyer, her law firm, and the
malpractice carrier for: abuse of process, intentional interference with a business relationship,
inducement/procurement of a breach of contract, and coercion of a witness. The district court
dispensed with certain of the plaintiffs’ claims on summary judgment—the witness-coercion claim,
and all claims against the doctor—leaving for trial the remaining claims against the attorney and her
law firm, and those against the insurance carrier. Those parties obtained leave to file this
interlocutory appeal seeking review of the denial of summary judgment.
We determine that Tennessee law warranted the granting of summary judgment to the
insurance carrier; it cannot be held vicariously liable for the acts of the lawyers and the firm. We
further decide that summary judgment ought to have been granted to all defendants on the plaintiffs’
claims for abuse of process. We affirm the remainder of the district court’s decision.
I
The Appellants here include State Volunteer Mutual Insurance Company (SVMIC),
Storgion’s medical malpractice insurer, and the attorneys it retained to defend Dr. Storgion, Teresa
J. Sigmon and the Sigmon Law Firm. Appellees are Matthews, through his guardian, together with
the two law firms representing him.
In the underlying malpractice action, Matthews’s attorneys identified Dr. Walter Scott,
Ph.D., as an expert witness. While deposing Scott, Sigmon learned that he was an FDA employee
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and that the FDA prohibited him from testifying as an expert witness, absent special permission that
he had not yet obtained. Scott had, however, obtained approval from his supervisor and other FDA
managers to testify as a “fact witness” and to act as a consultant in the case.
Sigmon and the attorneys for the other malpractice defendants sought to exclude Scott’s
testimony on several grounds. First, they moved on the grounds that his lack of a medical license
rendered him incompetent to testify. The state court denied the motion. Next, they filed a motion
in limine, and the court deferred a ruling. Finally, they filed motion to exclude portions of Scott’s
proposed testimony, which the court granted.
Two years after Scott’s deposition, after the close of discovery and after the court ruled on
defendants’ various motions to exclude, Sigmon e-mailed Scott’s FDA supervisor, requesting a copy
of the FDA’s approval of Scott’s activities in the case and all other documents relating to Scott’s
employment. Over a four-month period, Sigmon initiated several more communications with the
FDA. Sigmon reported to SVMIC and Storgion via e-mail about one of these FDA communications.
Ostensibly at the FDA’s request, Sigmon also sent the FDA copies of Scott’s deposition and of
certain pleadings. After these communications between Sigmon and the FDA, Scott withdrew his
services by letter to Matthews’s attorney. Scott wrote that “Sigmon’s inquiry . . . apparently raised
the specter of the possible impression of wrong-doing on [Scott’s] part,” and that his division
director ordered him to cease contact with the attorneys. This suit followed.
II
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A. Jurisdiction
As a threshold matter, Appellants contend that Appellees’ claims fail the $75,000 amount-in-
controversy requirement for this court’s exercise of diversity jurisdiction. This court “should
consider the amount alleged in a complaint and should not dismiss a complaint for lack of subject
matter jurisdiction unless it appears to a legal certainty that the plaintiff in good faith cannot claim
the jurisdictional amount.” Massachusetts Cas. Ins. Co. v. Harmon, 88 F.3d 415, 416 (6th Cir.
1996) (quotation omitted) (setting out the standard for district courts); see also Kovacs v. Chesley,
406 F.3d 393 (6th Cir. 2005) (finding jurisdiction in the absence of a legal certainty that the
plaintiff’s claim did not meet the jurisdictional amount). Appellees alleged “damages in excess of
$75,000.00” for, among other things, sums paid to Scott for his services, for the time and expense
involved in procuring replacement consultants/witnesses, and for punitive damages or statutory
treble damages under TENN. CODE ANN. § 47-50-109 (2004). Nothing indicates that Appellees
could not in good faith claim the jurisdictional amount at the time they filed their complaint. See
Kovacs, 406 F.3d 395-96 (noting that events occurring after filing do not oust jurisdiction). This
court being unconvinced to a “legal certainty that the claim is really for less than the jurisdictional
amount,” we reach the merits of this suit. St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S.
283, 289 (1938).
B. The Merits
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In considering an interlocutory appeal from the denial of summary judgment, this court
reviews de novo the district court’s denial if the decision turns on purely legal grounds, and for
abuse of discretion if the presence of a genuine issue of material fact prompted the denial. Black v.
Roadway Express, Inc., 297 F.3d 445, 448 (6th Cir. 2002). A district court necessarily abuses its
discretion, however, where it commits an error of law. See Koon v. United States, 518 U.S. 81, 100
(1996) (“A district court by definition abuses its discretion when it makes an error of law.”);
Southward v. South Cent. Ready Mix Supply Corp., 7 F.3d 487, 492 (6th Cir. 1993). As always, the
court construes the evidence, and draws all reasonable inferences therefrom, in the light most
favorable to the nonmoving party. Fed. Ins. Co. v. Hartford Steam Boiler Inspection & Ins. Co., 415
F.3d 487, 493 (6th Cir. 2005).
1. Immunity
Appellants argue on appeal that absolute and qualified immunity shield them from liability
for Appellees’ claims. Appellants, however, neglected to advance these contentions before the
district court and, absent any “exceptional circumstances,” we will not “consider an issue not passed
on below.” St. Marys Foundry, Inc. v. Employers Ins. of Wausau, 332 F.3d 989, 995-96 (6th Cir.
2003) (quotation omitted). We find no exceptional circumstances here.
2. Vicarious Liability
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SVMIC argues that it cannot be held vicariously liable for Sigmon’s conduct. The parties
agree on the pertinent facts—Sigmon informed SVMIC via email that she contacted the FDA in
regard to Scott, and Sigmon later sent SVMIC billing statements reflecting her FDA contacts.
SVMIC contends that silence following after-the-fact notice is inadequate to impose vicarious
liability under Tennessee law. The district court, relying on Givens v. Mullikin, 75 S.W.3d 383
(Tenn. 2002), found a genuine issue of material fact as to whether “SVMIC’s inaction in light of [its]
direct knowledge [of Sigmon’s conduct] infers [sic] that SVMIC at least in part knowingly
authorized Sigmon’s actions.” SVMIC’s conduct, however, falls short of the vicarious-liability test
the Tennessee Supreme Court announced in Givens.
The Givens court held that insurers may be vicariously liable for acts or omissions of an
attorney hired to represent an insured where the insurer exercised “invidious” actual control by
“direct[ing], command[ing], or knowingly authoriz[ing]” the acts or omissions. Id. at 395; see also
id. at 399 (“[S]ome exercise of actual control, whether it be through direction or knowing
authorization, must be alleged before a complaint can be held to properly state such a claim.”). To
recover against an insurer for an attorney’s conduct, “a plaintiff must show that the attorney’s
tortious actions were taken partly at the insurer’s direction or with its knowing authorization.” Id.
at 396. The court explained that “cases in which an insurer may be held liable under an agency
theory will be rare indeed.” Id. at 395.
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We find SVMIC’s inaction following after-the-fact notice of Sigmon’s conduct inadequate
to constitute “actual control” under Givens. An insurer’s exercise of actual control “seeks, either
directly or indirectly, to affect the attorney’s independent professional judgment, to interfere with
the attorney’s unqualified duty of loyalty to the insured, or to present a reasonable possibility of
advancing an interest that would differ from that of the insured.” Id. at 394 (quotation omitted).
Sigmon exercised independent professional judgment in contacting the FDA, and her judgment
could not have been affected by SVMIC’s receipt of after-the-fact notice. See id. at 395-96 (“We
do not hold today . . . that an insurer may be held liable for any acts or omissions resulting solely
from the exercise of [the] attorney’s independent professional judgment.”). Although the district
court found an issue of fact as to whether “SVMIC’s inaction . . . knowingly authorized” Sigmon’s
conduct, the Givens court, in discussing “knowing authorization” as a component of “actual
control,” contemplated an active role in the attorney’s conduct, certainly more than SVMIC’s
entirely passive conduct presented here. We therefore hold that the district court committed an error
of law in denying summary judgment to SVMIC.
3. Wrongdoer by Ratification
Appellees proffer “wrongdoer by ratification” as an alternate theory under which to hold
SVMIC vicariously liable for Sigmon’s conduct. To this end, Appellees rely on the 1955 Tennessee
Supreme Court case of Howard v. Haven, 281 S.W.2d 480 (Tenn. 1955), superceded in part by
statute as recognized in Cole v. Arnold, 545 S.W.2d 95 (Tenn. 1977). A theory of wrongdoer by
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ratification may remain viable in some contexts, but Givens expressly limited insurers’ vicarious
liability for an attorney’s conduct to those situations in which the insurer exercises some form of
actual control over the attorney’s actions. Givens, 75 S.W.3d at 396. Appellees maintain that the
ratification theory presented in Howard must be applicable in the insurance context because Givens
cited Howard. But Givens cited Howard only for the proposition that, after Givens, an attorney
remains subject to “direct liability for his or her own conduct.” Id. at 398 n.8.
4. Abuse of Process
Appellees alleged abuse of process as Count I of their Complaint. Tennessee recognizes two
elements to an abuse-of-process claim: (1) the existence of an ulterior motive; and (2) an act in the
use of process other than such as would be proper in the regular prosecution of the charge. Givens,
75 S.W.3d 383, 400 (Tenn. 2002). Appellants argued in the district court that Appellees could prove
neither element. First, Appellants contended that Appellees could not show Sigmon’s malevolence
and therefore could not satisfy the first element of the claim. Additionally, Appellants argued that
Appellees pointed to no “process” Sigmon used in her activities. The district court identified a
genuine issue of fact as to the first element—Sigmon’s intent—without addressing the second.
Appellees claim that Sigmon’s “asserting her position as a lawyer, sending [copies of]
depositions and pleadings to Scott’s supervisor, and . . . threat[ening to] pursu[e] further ‘action’ if
she did not get what she wanted” constitute utilization of process. Tennessee, however, subscribes
to a narrower definition of process. Tennessee courts have defined process as “that ‘which emanates
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from or rests upon court authority, and which constitutes a direction or demand that the person to
whom it is addressed perform or refrain from doing some prescribed act.’” Bell v. Icard, Merrill,
Cullis, Timm, Furen and Ginsburg, P.A., No. 03A01-9707-CV-00292, 1998 WL 24414, at *2 (Tenn.
Ct. App. Jan. 20, 1998) (quoting 1 AM. JUR. 2D Abuse of Process § 2 (1994)). Abuse of process
“refer[s] to the use of a writ, order, or command of the Court in the course of a judicial proceeding.”
Merritt-Chapman & Scott Corp. v. Elgin Coal, Inc., 358 F. Supp. 17, 21 (E.D. Tenn. 1972).
Because Appellees point to nothing in Sigmon’s conduct that “emanate[d] from or rest[ed] upon
court authority,” Bell, 1998 WL 24414, at *2, the district court erred in denying Appellees summary
judgment on this claim.
5. Intentional Interference with a Business Relationship
Count II of Appellees’ Complaint alleges intentional interference with a business
relationship. This tort requires (1) an existing business relationship with specific third parties or a
prospective relationship with an identifiable class of third parties; (2) the defendant’s knowledge of
that relationship; (3) the defendant’s intent to cause the breach or termination of the relationship;
(4) the defendant’s improper motive or improper means; and (5) damages. Trau-Med of Am., Inc.
v. Allstate Ins. Co., 71 S.W.3d 691, 701 (Tenn. 2002). Appellants proffer three reasons the district
court erred in denying summary judgment on this claim. First, they contend that no valid business
relationship existed between Appellees and Dr. Scott. Second, they argue that Appellees have failed
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to demonstrate that Sigmon’s conduct proximately caused Scott’s withdrawal. Finally, they claim
that Appellees failed to allege recoverable damages from Sigmon’s actions.
a. Validity of the Business Relationship
Appellants first argue that no valid business relationship existed because FDA rules and
Tennessee Regulations rendered illegal any business relationship between Appellees and Scott.
Appellants’ arguments regarding the invalidity of the business relationship fall short.
As the district court discussed, some question remains as to the nature of Appellees’
relationship with Scott (e.g., whether Scott was to be a fact witness, an expert witness, or merely a
consulting expert). The FDA cleared Scott to work in some capacity with Appellees; he obtained
three approvals from his supervisors. Scott did not obtain approval to testify as an “expert witness,”
although FDA regulations permit such approval in rare cases. Appellants argue that any business
relationship must have been illegal because Scott could not legally testify as a fact witness or as an
expert witness.
First, Appellants point to Tennessee Supreme Court Rule 8, Ethical Consideration 7-28, for
the proposition that “[a] lawyer should not pay or agree to pay a non-expert witness an amount in
excess of reimbursement for expenses and financial loss incident to being a witness.” Appellants
claim this renders any fact-witness contract void. But Appellees refer to Scott only as an “expert”
witness and consultant.
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Appellants then point to a federal regulation they contend prohibits Scott’s involvement as
an expert witness. They cite to 21 CFR § 20.1(a), which forbids FDA employees, “except as
authorized by the Commissioner,” from providing “any testimony . . . with respect to any
information acquired in the discharge of [their] official duties.” As the district court pointed out,
however, Scott obtained three separate authorizations for his work with Appellees—two for
consulting work and one for testimony as a “witness of fact.” Although labeling his role as “witness
of fact,” Scott delineated the bounds of his testimony in his request for approval: “to provide factual
data about a device type (e.g. how it operates, what it is designed to do)” where the “litigants include
patients, doctors and a hospital.” Scott’s departmental “Integrity Officer” approved the request after
noting, “Federal Law only prohibits [this type of testimony] in matters before the federal
government (18 U.S.C. 203 and 205). Since the government is not involved I see no impediment
to your participation . . . .” Thus it appears that Scott obtained specific FDA authorization for his
intended testimony, and it is not clear that a court’s or party’s characterization of Scott as an “expert
witness” would control the FDA’s internal approval procedures.1 Even assuming, however, Scott’s
inability to testify as planned, Appellants have not demonstrated—in fact, do not even
argue—Scott’s consulting arrangement with the Appellees to be illegal or invalid.
1
We note that the FDA regulation cited by Appellees prohibits, absent permission, testimony
“pertaining to any function of the Food and Drug Administration or with respect to any information
acquired in the discharge of his official duties.” Thus the testimony that Scott could have provided
under a valid business relationship would be limited to (1) the specific testimony for which he had
FDA permission, or (2) other testimony pertaining neither to FDA functions nor information
acquired as a result of Scott’s official duties.
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b. Proximate Cause
Appellants next contend that Appellees failed to show that Sigmon’s actions proximately
caused Scott’s withdrawal. The Tennessee Supreme Court defines proximate cause as “a limit on
the causal chain, such that, even though the plaintiff’s injury would not have happened but for the
defendant’s [actions], defendants will not be held liable for injuries that were not substantially
caused by their conduct or were not reasonably foreseeable results of their conduct.” Hale v.
Ostrow, 166 S.W.3d 713, 719 (Tenn. 2005). “Thus, proximate cause, or legal cause, concerns a
determination of whether legal liability should be imposed where cause in fact has been established.”
Id. (quotation omitted).
As the district court found, Sigmon “sent repeated letters and e-mails” to FDA personnel and
“apparently suggested to [the FDA] in some manner that Dr. Scott had acted in violation of FDA
policy.” A reasonable person would foresee that such actions could result in Scott withdrawing his
services.
Appellants argue that Sigmon’s contacts with the FDA, alerting the agency to “facts that Dr.
Scott himself should have disclosed to his superiors,” only prompted the FDA to enforce its own
regulations, so that Sigmon’s conduct cannot be considered the proximate cause of Scott’s
withdrawal. It remains unclear, however, whether the FDA’s prohibition of Scott’s involvement
resulted from its enforcement of its own regulations or instead merely from the FDA’s exercise of
an abundance of caution in response to an aggressive attorney. As discussed above, Appellants have
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pointed to no FDA regulation that would prohibit Scott from acting as a consultant, nor is it clear
that any FDA regulation absolutely barred Scott’s proposed testimony.
c. Damages
Appellants’ final argument with respect to the interference claim is that Appellees suffered
no recoverable damages. Because the district court found a genuine issue of material fact as to
damages, this court reviews for an abuse of discretion. Assuming Appellants correctly categorize
some of Appellees’ alleged damages as overly-speculative, Appellants nonetheless fail to explain
why Appellees, if they succeed on the merits, would not be entitled to compensation for sums
already paid to Scott or for the time, effort, and expense required to procure a replacement
consultant/witness. Nothing demonstrates that the district court abused its discretion in finding an
issue of fact here.
6. Procurement of Breach
A claimant for inducement and procurement of breach of contract must show: (1) a legal
contract; (2) the defendant’s knowledge of the existence of the contract; (3) the defendant’s
intention to induce its breach; (4) the defendant’s malicious intent; (5) a breach of the contract; (6)
proximate cause of the breach; and (7) resultant damages. B&L Corp. v. Thomas & Thorngren, Inc.,
162 S.W.3d 189, 218 (Tenn. Ct. App. 2004).
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Appellants advance arguments against this claim identical to those advanced against
intentional interference with a business relationship—the absence of a valid contract,2 of proximate
cause, and of damages—all addressed above in the context of intentional interference with a
business relationship.
The single unique argument Appellants advance for this cause of action is that no contract
existed for lack of mutual assent. Because the district court found a genuine issue of fact, we review
for abuse of discretion. Appellants correctly note that Scott and Appellees characterized Scott’s
testimonial role differently. Scott announced that he intended to testify only as a fact witness, while
Appellees proffered Scott as an “expert” witness. It is clear, however, that both parties expected
Scott to render consultation services, and that Scott sought and obtained permission from his
supervisors to testify, even generally describing the content of his expected testimony. Thus, the
parties’ differing characterizations of this one aspect of their alleged agreement is not necessarily
determinative, and the district court did not abuse its discretion in finding a material issue of fact as
to mutual assent.
III
2
As with Appellees’ claim for intentional interference with a business relationship, see supra
n.1, the testimony that Scott could have provided under a valid contract would be limited to (1) the
specific testimony for which he had FDA permission, or (2) other testimony pertaining neither to
FDA functions nor information acquired as a result of Scott’s official duties.
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We conclude that the district court erred under Tennessee law in denying summary judgment
in favor of SVMIC and in favor of all defendants on the abuse-of-process claim. We therefore
reverse the district court’s denial of summary judgment in those respects. We affirm the remainder
of the district court’s judgment.
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CLAY, Circuit Judge, concurring in part and dissenting in part. I concur in Section II,
parts 2 and 3 of this opinion denying vicarious liability to the insurer, State Volunteer Mutual
Insurance Company (“SVMIC”), and I also concur in part 4, and the finding that the district court
erred in not granting Defendants’ motion for summary judgment on the abuse of process claim. I
dissent as to the remaining parts regarding the interference with a business relationship, and
procurement of a breach of contract claims, and would grant Defendants’ motion for summary
judgment as to all claims.
As a preliminary matter, this action should be dismissed for lack of jurisdiction. As noted
by the majority, Plaintiffs brought this suit in federal court pursuant to diversity jurisdiction, which
requires that the parties be citizens of different states and that the amount in controversy exceed
$75,000. The majority correctly states that the sum claimed by the plaintiff controls if the claim is
apparently made in good faith, and the case cannot be dismissed for not meeting the “amount in
controversy requirement” unless it appears “to a legal certainty that the claim is really for less than
the jurisdictional amount.” Rosen v. Chrysler Corp., 205 F.3d 918, 921 (6th Cir. 2000). The
majority incorrectly concludes, however, that “nothing indicates that [Plaintiffs] could not in good
faith claim the jurisdictional amount at the time they filed their complaint” and that we should,
therefore reach the merits of the case. To the contrary, it appears to a legal certainty that the claim
really is for less than the jurisdictional amount and that Plaintiffs cannot in good faith claim that the
jurisdictional amount has been met. A plaintiff’s “good faith in choosing the federal forum is open
to challenge not only by resort to the face of his complaint, but by the facts disclosed at trial, and
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if from either source it is clear that his claim never could have amounted to the sum necessary to
give jurisdiction there is no injustice in dismissing the suit.” Gafford v. General Elec. Co., 997 F.2d
150, 157 (6th Cir. 1993). “Indeed, this is the court’s duty under the [Judiciary] Act of 1875.” Id.
It would not be an injustice to dismiss this suit where it appears to a legal certainty that
Plaintiffs cannot meet the jurisdictional amount. In the complaint, Plaintiffs claim damages for the
loss of “the use and benefit of significant amounts of time, effort, money and other professional
resources associated with the prior business relationship with Dr. Scott,” and Plaintiffs further claim
that they incurred additional expenses in their efforts to seek another expert to replace Scott. (J.A.
at 23-24.) Plaintiffs allege damages in excess of $75,000 on all their individual tort claims, treble
damages on the inducement to breach of contract and intentional interference with a business
relationship and coercion of witness claims, and also seek punitive damages. Despite these
contentions, however, Plaintiffs have not provided this Court or the district court with any starting
point for estimating damages for the purpose of establishing jurisdiction. All we know is that
Plaintiffs paid Scott $25 per hour for his clerical services and $175 per hour for his “opinions.” As
of 2000, Scott estimated that his fees totaled approximately $4000. We do not know how many
hours Plaintiffs claim Scott worked in total or how much they had to pay the new expert, nor how
much time and money was expended procuring the new expert. It seems clear, however, that at a
rate of $175 per hour, even with treble damages, Plaintiffs still could not make a good faith claim
of $75,000 in damages as a result of the loss of Scott as a witness. Consequently, we should refrain
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from reaching the merits of this cause of action and dismiss as a result of Plaintiffs’ inability to meet
the “amount in controversy” requirement of § 1332.
Although I conclude that jurisdiction is lacking, we could, in the alternative, reach the merits
and reverse the district court’s denial of Defendants’ motion for summary judgment as to all claims
and dismiss the action for failure to state a claim upon which relief could be granted. It does not
appear that Defendants Teresa Sigmon and the Sigmon law firm have done anything wrong, and it
is extremely troubling that Plaintiffs are being permitted to utilize these tort claims to punish an
attorney who did nothing more than to zealously represent her client and investigate and litigate her
case in an appropriate manner.
It was Defendant Teresa Sigmon’s right and duty to ascertain the capacity in which Scott
would be testifying and his appropriateness as a witness. The Tennessee Rules of Professional
Conduct state that “[a] lawyer shall act with reasonable diligence and promptness in representing
a client.” Tenn. Sup. Ct. Rule 8, Canon 1.3 (2005). The comments to this rule provide that:
A lawyer shall pursue a matter on behalf of a client despite opposition, obstruction,
or personal inconvenience to the lawyer and may take whatever lawful and ethical
measures are required to vindicate a client’s cause or endeavor. A lawyer should act
with commitment and dedication to the interests of the client and with zeal in
advocacy upon the client’s behalf.
Id. The record reveals that Sigmon’s actions were nothing more than those of an attorney properly
and zealously representing her client.
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Plaintiffs initially identified Scott as an expert witness. After Defendants challenged Scott’s
suitability as an expert, the trial court ruled that Scott could not testify as to the applicable standard
of care. Defendants subsequently deposed Scott, at which time Scott revealed that he was employed
by the FDA and was testifying as a fact witness, not an expert witness, and that the FDA in fact
prohibited him from testifying as an expert witness. Scott also testified during the deposition that
his supervisor at the FDA, Cornelia Rooks, was aware of his participation in the trial as a
“consultant and witness of fact.” (J.A. at 129.) Scott further stated that he was uncertain whether
or not he would be testifying at trial, but that the FDA had not yet approved him testifying and he
did not know the FDA’s policy on whether he would be permitted to testify. As noted above, Scott
claimed that at a rate of $25 per hour for clerical work and $175 per hour for opinion testimony, he
had been paid approximately $4000 as of July for his services. After the deposition, Defendants
again sought to exclude Scott, but Plaintiffs claimed that Scott would be testifying only as a fact
witness and would not testify as to the acceptable professional standard of care for physicians. The
state court denied Defendants’ motion.
In August 2002, as trial approached, Defendant Sigmon contacted Cornelia Rooks at the
FDA via email, and requested information regarding whether Scott had been granted permission to
testify in the underlying suit, along with copies of Scott’s employment information and the FDA’s
policies regarding the participation of FDA employees in litigation. The matter was referred to the
Ann Smith from the department of regulatory affairs, who according to Defendant Sigmon, seemed
incredulous about the fact that Scott was being paid for his participation in the suit. Smith requested
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information regarding the type of opinions that Scott was offering and evidence that Scott had been
paid. There were a few more communications between Sigmon and the FDA in which Sigmon
repeated her information requests. Ultimately, after being made aware of the circumstances by
Sigmon’s inquiries, the FDA forced Scott to withdraw his participation in the lawsuit, with the
admonition that as an employee, Scott should not give “‘testimony’ in outside legal contests that
may involve the FDA.” (J.A. at 198.) Internal agency emails reveal that the FDA was troubled by
the fact that Scott had been paid for his participation in the trial, and with Scott’s actual role in the
case.
Sigmon, in contacting the FDA regarding Scott’s authorization to testify as an expert, did
nothing more than fulfill her obligation to represent her client. Once it became apparent to Sigmon
that Scott may have been acting outside of his capacity as an FDA employee, it was Sigmon’s duty
to do everything legally and ethically permissible to discover whether Scott was exceeding his
authorization from the FDA. It should be remembered that Scott had testified that he was complying
with FDA guidelines regarding witness testimony by FDA employees. It was also Sigmon’s duty
to determine what guidelines the FDA had established for its employees who might be witnesses in
order to determine whether such guidelines or instructions might affect Scott’s testimony. In other
words, the information being sought by Sigmon was extremely relevant to Scott’s credibility as a
witness.
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There is absolutely no rule in the Tennessee Rules of Conduct or anywhere else that
prohibited Sigmon from contacting Scott’s employer under these circumstances. It seems that
Sigmon’s inquiry into whether Scott was exceeding his authority proved justifiable inasmuch as the
FDA did in fact pull Scott from the case, apparently because it was troubled by the fact that Scott
was being paid and because his role in the trial was potentially violative of government guidelines.
Sigmon merely pursued information which was critical to her trial preparation. The fact that the
FDA ultimately determined that Scott’s participation in the trial was contrary to its policies was a
fact that likely rendered Scott impeachable as a witness – further confirmation that Sigmon was
justified in pursuing the matter on behalf of her client.
In preparation of her case for trial, Sigmon pursued a legitimate course of action after having
received conflicting information regarding whether Scott would testify as a fact witness or an expert
witness. Again, if Scott was operating outside the permissible bounds of his authority from the
FDA, and getting paid when he should not have, then this raised a credibility issue that Sigmon
would have been allowed to go into at trial, and she was therefore permitted to investigate the
matter. The fact that the state court had ruled that Scott could testify did not moot the issue where
it was still not clear whether the FDA had actually agreed to permit Scott to testify, or whether
Scott’s testimony would actually constitute expert testimony.
Plaintiffs represented to the state court that Scott was a fact witness, not an expert, but
represented to the district court and this Court that Defendants interfered with their business
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Matthews, et al. v. Storgion, et al.
relationship with Scott or sought to induce a breach of contract by depriving them of a retained
expert witness. These are wholly inconsistent positions, and Plaintiffs should not be permitted to
bring suit in tort against opposing counsel for trying to ascertain the status of a witness about which
Plaintiffs themselves have been vague and contradictory. If, as Plaintiffs claim, Scott was only a
fact witness, then Scott should not have been paid for his services. If Scott was a mere consultant,
then perhaps Scott should not have been deposed or allowed to testify as a witness since presumably
his only role would have been to assist Plaintiffs’ attorneys in the preparation of their case. It would
appear that Plaintiffs themselves were the source of the confusion regarding Scott’s role in the case,
which should preclude them from being allowed to sue Defendants in federal court for these torts.
Furthermore, it is an abuse of the adversary system to pursue these types of claims against
opposing counsel for actions legitimately undertaken by them in furtherance of the litigation, and
these claims should all have been dismissed on summary judgment. The majority argues that
Defendants’ actions technically meet the elements of the torts of intentional interference with a
business relationship and inducement and procurement of breach of contract; however, even if
Plaintiffs’ claims technically fit within the legal framework of these torts, that does not mean that
these are not frivolous and improper claims. These claims arose out of actions that were legitimately
undertaken by counsel in the course of litigation, not as a result of business dealings, and are not the
proper subject for a lawsuit in this context.3 Plaintiffs employed Scott as a fact witness or consultant
3
Other jurisdictions within this Circuit have in fact held that attorneys are immune from
liability to other persons for conduct that arises from acts performed during representation of their
clients. See, e.g., Dowling v. Select Portfolio Servicing, Inc., Slip Copy, 2006 WL 571895, *8
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Nos. 05-5219; 05-5220
Matthews, et al. v. Storgion, et al.
or expert, depending on which of Plaintiffs contentions one believes. Plaintiffs did not have a
business relationship with Scott in the traditional sense of the word, and Defendants did not interfere
with a business relationship or procure a breach of contract. Defendant Sigmon was merely
investigating a witness for the opposing side in preparation for trial. Sigmon was concerned with
the potential impact of Scott’s testimony on her client’s case and she acted within the bounds of
professional responsibility in investigating whether he had permission from the FDA to testify, and
in what capacity.
In concluding that Plaintiffs should survive summary judgment on the intentional
interference with a business relationship claim, the majority relies upon the holding in Trau-Med
of America, INC., v. Allstate Insurance Co., 71 S.W. 3d. 691, 701 (Tenn. 2002), in which the
Tennessee Supreme Court held that Trau-Med had in fact stated a claim for tortious interference
with a business relationship against defendant Allstate, whom plaintiffs were seeking to hold
vicariously liable in tort. What the majority fails to note, however, is that Trau-Med involved an
actual claim that plaintiff’s business interests had been affected as a result of Allstate’s interference.
Specifically, Trau-Med claimed that Allstate “ interfered with six specific actions filed in the Circuit
Court of Shelby County by making false statements about the propriety of Trau-Med's business and
by threatening to protract the litigation process” and as a result of this conduct, “‘[p]laintiff-
(S.D.Ohio) (“Under Ohio law, attorneys enjoy immunity from liability to third persons arising from
acts performed in good faith on behalf of, and with the knowledge of, their clients.”).
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Nos. 05-5219; 05-5220
Matthews, et al. v. Storgion, et al.
attorneys, claimants, and others, . . . because of fear of litigation and other reasons, [have been
induced] not to refer persons and to discontinue use of plaintiff's clinic’ . . . [and] this improper
interference with its existing business relationships resulted in substantial economic harm to Trau-
Med.” Id. at 701-02.
In contrast, Plaintiffs here do not allege economic harm to an actual business interest.
Plaintiffs’ only claim is that as a result of Defendants’ actions, they lost and had to replace a key
witness. That is not the type of business relationship contemplated by the Tennessee Supreme
Court to sustain a claim of intentional interference with a business relationship. The Trau-Med
court, in expressly adopting the tort of intentional interference with a business contract, provided
guidance as to its potential uses by referring to § 766B comment c of the Restatement (Second) of
Torts, which provides:
The relations protected against intentional interference by the rule stated in this
Section include any prospective contractual relations, except those leading to
contracts to marry, if the potential contract would be of pecuniary value to the
plaintiff. Included are interferences with the prospect of obtaining employment or
employees, the opportunity of selling or buying land or chattels or services, and any
other relations leading to potentially profitable contracts. Interference with the
exercise by a third party of an option to renew or extend a contract with the plaintiff
is also included. Also included is interference with a continuing business or other
customary relationship not amounting to a formal contract.
Trau-Med, 71 S.W.3d at 701 (emphasis in original). Nothing in the language of the Restatement
cited above would lead to the conclusion that this tort should be applied to the situation at hand, and
I would, as a consequence, have granted Defendants’ motion for summary judgment.
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Nos. 05-5219; 05-5220
Matthews, et al. v. Storgion, et al.
In conclusion, Plaintiffs’ claims should be dismissed for not meeting the jurisdictional
amount, or in the alternative, for failing to state a claim upon which relief can be granted.
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