Karin Gray v. AT&T Corp. ( 2004 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 02-3436
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Karin Gray, *
*
Appellant, *
* Appeal from the United States
v. * District Court for the
* Western District of Missouri.
AT&T Corp., *
*
Appellee. *
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Submitted: September 11, 2003
Filed: February 3, 2004
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Before WOLLMAN, BOWMAN, and RILEY, Circuit Judges.
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RILEY, Circuit Judge.
Karin Gray (Gray) sued AT&T Corp. (AT&T) for making allegedly defamatory
statements regarding Gray’s termination. The district court1 granted summary
judgment to AT&T, concluding AT&T had not published the statements, and,
alternatively, if AT&T had published the statements, the publications were qualifiedly
privileged. The district court further determined Gray failed to demonstrate she
1
The Honorable Gary A. Fenner, United States District Judge for the Western
District of Missouri.
suffered any recoverable damages. Gray appeals. Because no publication of the
allegedly defamatory statements occurred, we affirm. We need not address the
district court’s alternative conclusions.
I. BACKGROUND
Gray worked for AT&T as a customer account representative. From September
13, 1995, to October 18, 1995, Gray missed work due to a non-work related injury.
Pursuant to AT&T’s policy, Gray submitted two “Provider’s Report of Non-Work
Related Illness or Injury” forms (Injury Forms) to have her absences certified. Due
to inconsistencies between the two Injury Forms, AT&T did not certify Gray’s
absences from October 9, 1995, to October 18, 1995.
Gray appealed AT&T’s decision not to certify her post-October 8, 1995,
absences. Pursuant to the appeal, AT&T contacted Dr. David Goldberg (Dr.
Goldberg), the provider listed on Gray’s Injury Forms. Dr. Goldberg informed AT&T
he did not possess any records indicating his office treated Gray in September or
October of 1995, and opined Gray had committed fraud. Consequently, AT&T
formed an investigation team. The investigation team included Paul Garrett (Garrett),
Gray’s immediate supervisor; Sherry Vawter (Vawter), an AT&T corporate security
manager; and Marlane Bartels (Bartels), an AT&T attendance manager.
On March 26, 1996, this team met with Gray to discuss her visits to Dr.
Goldberg’s office. After the meeting, Garrett and Vawter contacted Dr. Goldberg in
his St. Louis office. Dr. Goldberg reiterated (1) no records existed to substantiate
Gray’s alleged visits; (2) the absence of any medical records supported a presumption
the visits never occurred; and (3) Dr. Thomas Taylor (Dr. Taylor), the physician who
allegedly treated Gray, had no authority to sign disability inquiry forms. Dr.
Goldberg also informed Garrett and Vawter he would check for Gray’s records in
another file in his Kansas City, Missouri, office. After several unsuccessful followup
attempts, Garrett asked Gray to obtain her records from Dr. Goldberg. Instead of
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submitting records from Dr. Goldberg’s office, Gray submitted a letter from Dr.
Taylor, stating Gray visited Dr. Goldberg’s Kansas City office for treatment, and Dr.
Taylor treated Gray in Kansas City. Garrett informed Gray AT&T still needed
records to substantiate her visits. Gray did not produce any of the requested records.
After its investigation, AT&T terminated Gray as of April 4, 1996, for
falsifying corporate documents. Garrett communicated AT&T’s reasons for
termination to Gray; the investigation team members; Garrett’s supervisor, Claudia
McCarthy (McCarthy); and human resource manager, Dawn Stewart (Stewart).
Garrett recorded the basis for Gray’s termination in his notes and on two different
forms. Melody Gilliam Rudolph (Rudolph), an AT&T human resources clerk,
prepared a termination form, noting AT&T terminated Gray for “falsing [sic]
records.” Rudolph testified her supervisor, Stewart, most likely provided Rudolph
with the information for the termination form. Rudolph also prepared an “Employee
Change Notice Request” form, which contained the phrase “Dismissed–Misconduct.”
Following her termination, Gray filed a claim for unemployment benefits on April 8,
1996. On April 8 and April 17, 1996, AT&T forwarded via facsimile Gray’s
termination information to Gates McDonald & Co. (Gates McDonald), a company
AT&T regularly retained to process unemployment claims.2 The fax cover sheet
2
Pursuant to a local rule, the district court deemed AT&T’s Statement of
Uncontested Facts as admitted, because Gray did not specifically dispute any of
AT&T’s Statement of Uncontested Facts. AT&T’s Statement of Uncontested Facts
states Gray filed her unemployment benefits claim on April 8, 1996, and AT&T
provided Gates McDonald with Gray’s separation information on or about April 17,
1996. However, an AT&T “Termination of Employment” form addressed to Gates
McDonald, describing Gray’s separation as involuntary for the misconduct of
“Falsifing [sic] Records,” indicates it was faxed on April 8, 1996.
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accompanying the information and prepared by Rudolph stated “Karin Gray–
Dismissed Falsifing [sic] Documents.”3
Gray filed a defamation suit against AT&T, contending AT&T defamed her by
publishing statements that she committed disability fraud. The district court granted
summary judgment in AT&T’s favor, concluding (1) AT&T had not published the
allegedly defamatory statements; (2) if AT&T had published the allegedly defamatory
statements, the communications were qualifiedly privileged; and (3) Gray failed to
present evidence of actual damages. Gray contends otherwise.
II. DISCUSSION
“We review the district court’s grant of summary judgment de novo.”
Interstate Cleaning Corp. v. Commercial Underwriters Ins. Co., 325 F.3d 1024, 1027
(8th Cir. 2003). “We will affirm a district court’s grant of summary judgment ‘if the
pleadings, depositions, answers to interrogatories, and admissions on file, together
with affidavits . . .’ demonstrate that no genuine issue of material fact exists and the
moving party is entitled to judgment as a matter of law.” Id. (quoting Fed. R. Civ. P.
56(c)). “As we exercise our power under diversity jurisdiction, we must interpret the
forum state’s law.” Id. Under Missouri law, to establish a prima facie case for
defamation, a claimant must establish six elements: “1) publication, 2) of a
defamatory statement, 3) that identifies the [claimant], 4) that is false, 5) that is
published with the requisite degree of fault, and 6) damages the [claimant’s]
reputation.” Overcast v. Billings Mut. Ins. Co., 11 S.W.3d 62, 70 (Mo. 2000) (en
banc).
3
Right after termination, Gray told other people, including eighteen family
members, two friends, and her boyfriend at the time, about her termination, and the
reasons therefore.
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Under Missouri law, a person publishes a defamatory statement by
communicating the defamatory matter to a third person. Rice v. Hodapp, 919 S.W.2d
240, 243 (Mo. 1996) (en banc). “However, ‘communications between officers of the
same corporation in the due and regular course of the corporate business, or between
different offices of the same corporation are not publications to third persons.’” Id.
(quoting Hellesen v. Knaus Truck Lines, Inc., 370 S.W.2d 341, 344 (Mo. 1963)).
“The rule rests on the premise that a corporation can only communicate through its
employees [with] the writings prepared in the ordinary course of business and
distributed within the corporate structure.” Lovelace v. Long John Silver’s, Inc., 841
S.W.2d 682, 684 (Mo. Ct. App. 1992). These intra-corporate communications made
in the regular course of business do not constitute publications, because the
communications are made within the corporation itself and not to a third party. Id.
at 685. Missouri courts have broadly interpreted the intra-corporate immunity rule.
See Blake v. May Dep’t Stores Co., 882 S.W.2d 688, 691 (Mo. Ct. App. 1994)
(extending the rule to a department manager with no authority to terminate, discipline
or promote); Lovelace, 841 S.W.2d at 685 (concluding three employees’ statements
to a supervisor alleging another employee made unwanted sexual advances toward
the employees fell within the intra-corporate immunity rule).
Gray contends the intra-corporate immunity rule does not apply to Vawter,
Bartels, Stewart, and Rudolph.4 We disagree. Vawter, Bartels, and Stewart were
AT&T managers, and Vawter and Bartels were part of the team investigating Gray’s
conduct, indicating Vawter and Bartels had supervisory responsibilities. Vawter and
Bartels were informed of the basis for Gray’s termination during a team meeting,
which occurred in the regular course of AT&T’s business.
4
Earlier Gray included McCarthy as one of the recipients of a “publication.”
McCarthy enjoys intra-corporate immunity because Garrett was Gray’s supervisor
and McCarthy was Garrett’s supervisor. See Blake, 882 S.W.2d at 691 (concluding
a department manager’s dissemination of an allegedly defamatory statement to the
Director of Associate Relations enjoyed intra-corporate immunity).
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Rudolph’s supervisor, Stewart, also enjoys intra-corporate immunity. Stewart,
as human resources manager, received and passed on the information to Rudolph in
the ordinary course of business. As a human resources clerk, Rudolph must complete
certain paperwork upon an employee’s termination. Rudolph was required to state
the basis for the termination in the paperwork. Therefore, Stewart’s and Rudolph’s
communications were made within the scope of their duties at AT&T.5
Gray principally contends publication occurred when her file was transferred
to Gates McDonald. This communication apparently occurred after Gray filed an
unemployment benefits claim. See supra note 2. AT&T forwarded the reason for
Gray’s termination to Gates McDonald to process Gray’s claim. Gates McDonald
had a contractual duty to process and respond to Gray’s unemployment claim,
necessitating AT&T’s disclosure of the grounds for Gray’s termination.
For many years, the law of libel and slander has recognized a general
exemption to the publication rule for corporate communications to necessary third
parties authorized to act on behalf of the corporation. See Thornton v. Holdenville
Gen. Hosp., 36 P.3d 456, 460-61 (Okla. Civ. App. 2001) (finding no publication of
a hospital employee’s negative statements to employees of an outside, unrelated
company contractually responsible for physician staffing of the hospital’s emergency
room). “For a corporation . . . acting through one of its agents or representatives, to
send a libelous communication to another of its agents or representatives, cannot be
a publication of the libel on the part of the corporation. It is but communicating with
itself.” Id. at 461 (citing Magnolia Petroleum Co. v. Davidson, 148 P.2d 468, 471
(Okla. 1944) (quoting Prins v. Holland-North Am. Mortgage Co., 181 P. 680 (Wash.
5
To the extent Gray contends AT&T’s placement of Garrett’s notes or other
forms in the corporate files or computer system constituted publication, Gray’s
argument is foreclosed. See Washington v. Thomas, 778 S.W.2d 792, 796 (Mo. Ct.
App. 1989) (noting that placing a copy of a letter containing an allegedly defamatory
statement “in the corporation’s files does not constitute publication”).
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1919)). At least one court has applied a “need to know” concept to the intra-
corporate immunity rule. In Woods v. Helmi, 758 S.W.2d 219 (Tenn. Ct. App. 1988),
the plaintiff contended a publication occurred when defamatory reasons for her
termination were “published” by her employer, the Regional Medical Center (Center),
in a report to two physician employees of a separate entity which provided necessary
physician services for patients at the Center. In holding no publication occurred, the
Tennessee Court of Appeals reasoned:
While many of the cases denying the existence of a publication
speak in terms of corporations communicating to or with itself, it seems
to this Court that more essential to the issue is the concept of “need to
know,” with the communication flowing through the proper chain of
command, particularly in employee performance reviews or disciplinary
action. . . .
...
. . . In the case at bar . . . the memorandum in question was
disseminated between employees of two different corporate entities. . . .
...
. . . It was both a practical and legal necessity that they not only
report any questionable practices . . . but be advised about same as well.
. . . The performance of employees such as [the plaintiff] would
need to be under observation at all times, and any real or suspected
deviation from the appropriate standard of care should necessarily be
documented and reported to those in authority. This proper exchange
of information should not be inhibited by the technical nicety that a
person or persons who were in the “need to know” channel were
employed by different corporate entities. The responsibilities and duties
of the particular parties involved take precedent over the corporate
entity that pays them their salaries.
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Id. at 223-24 (emphasis added). The Missouri Court of Appeals cited Woods and its
reasoning in Washington, but distinguished the facts in Washington from Woods.
Washington, 778 S.W.2d at 797-98. The reasoning and logic of Thornton and Woods
are sound and consistent with business relationships today. Corporations, particularly
small businesses, often rely on outside companies to perform many of their
complicated regulatory compliance duties, imposed by a host of laws and regulations.
We believe Missouri would apply a similar “need to know” concept for
communications between the separate corporations under the facts of Gray’s claim.6
III. CONCLUSION
AT&T’s communications of allegedly defamatory statements occurred in the
regular course of its business, among persons having a need to know in order to
perform their employment duties. No publication, as recognized by Missouri law,
occurred. We affirm for the reasons stated.
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6
The record clearly demonstrates AT&T did not communicate the allegedly
defamatory statements with reckless disregard for the truth or falsity of the
statements. AT&T conducted a reasonable investigation into Gray’s conduct, and
AT&T’s dissemination of information did not exceed the exigencies of the situation.
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