Smith v. Charter Communications ( 2023 )

05/23/2023
OP 22-0023
Case Number: OP 22-0023
IN THE SUPREME COURT OF THE STATE OF MONTANA
2023 MT 92CHARLES DANIEL SMITH,
Plaintiff and Appellant,
v.
CHARTER COMMUNICATIONS, INC.,
Defendant and Appellee.
ORIGINAL PROCEEDING: Certified Question, United States Court of Appeals for
the Ninth Circuit, Cause No. 21-35149
Honorable Susan P. Graber and Daniel P. Collins,
Circuit Judges, Honorable Jennifer Choe-Groves, Judge
for the United States Court of International Trade
COUNSEL OF RECORD:
For Appellant:
Eric E. Holm (argued), Holm Law Firm, PLLC, Billings, Montana
For Appellee:
Joshua B. Kirkpatrick (argued), Michelle L. Gomez, David C.
Gartenberg, Littler Mendelson, PC, Denver, Colorado
For Amicus Montana Trial Lawyers Association:
Justin P. Stalpes (argued), Beck Amsden & Stalpes, PLLC, Bozeman,
Montana
Argued: September 23, 2022
Submitted: October 11, 2022
Decided: May 23, 2023
Filed:
__________________________________________
Clerk
Justice James Jeremiah Shea delivered the Opinion of the Court.
¶1 The United States Court of Appeals for the Ninth Circuit has submitted the
following state law question to the Court:
Whether, in an action for wrongful discharge pursuant to Montana Code Annotated
section 39-2-904, an employer may defend a termination solely for the reasons given
in a discharge letter, as the court held in Galbreath v. Golden Sunlight Mines, Inc.,
890 P.2d 382 (Mont. 1995), or whether the 1999 statutory amendments have
superseded the Galbreath rule.
¶2 We accepted certification by order dated January 25, 2022. For the reasons
discussed below, our answer is: No—the holding in Galbreath v. Golden Sunlight Mines,
270 Mont. 19, 890 P.2d 382, has not been superseded by the 1999 statutory amendments
because our holding in Galbreath was not predicated upon the subsequently amended
statutes. Although Galbreath referenced Swanson v. St. John's Lutheran Hosp., 182 Mont.
414, 597 P.2d 702 (1979), which relied on § 39-2-801, MCA, in its holding, the Galbreath
holding is predicated on the Montana Rules of Evidence. Specifically, we held in
Galbreath that “[a]ny collateral reasons suggested by the evidence, other than the sole
reason stated in the discharge letter, were irrelevant, and therefore, inadmissible. Rule 402,
M.R.Evid.” Galbreath, 270 Mont. at 19, 890 P.2d at 385. In more recent cases, we have
clarified the Galbreath Rule to note that, while “generally in wrongful discharge cases,
reasons for discharge other than those set forth in a discharge letter are irrelevant, and thus
inadmissible . . . evidence offered to substantiate the reasons already given in the
termination letter is admissible.” McConkey v. Flathead Elec. Coop., 2005 MT 334, ¶ 29,
330 Mont. 48, 125 P.3d 1121 (internal quotations and citations omitted).
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FACTUAL AND PROCEDURAL BACKGROUND
¶3 In accordance with M. R. App. P. 15(6)(a)(ii), the Ninth Circuit provided the
relevant factual and procedural background to the certified question in its certification
order, which we restate here.
¶4 In 2013, Charles Smith began working for Charter Communications, Inc. (Charter).
In 2016, he became the Vice President of the Mountain States management area, which
required traveling and managing employees at about 50 sites throughout Montana,
Wyoming, and parts of Colorado. Although the parties dispute the full extent of the job’s
travel requirement, it is undisputed that it required at least quarterly travel to these sites.
On January 29, 2018, Charter fired Smith and issued a corrective action report which listed
two reasons for his termination, only one of which is relevant here: “In December 2017,
[Smith] failed to fulfill the 50% travel requirement to [his] management area.” Smith filed
a wrongful discharge action in state court, which Charter removed to federal court, alleging
Charter fired him without good cause in violation of Montana’s Wrongful Discharge from
Employment Act (WDEA), § 39-2-904(1)(b), MCA.
¶5 The District Court granted Charter’s motion for summary judgment. It found there
was a genuine issue of material fact as to whether a 50% travel requirement existed in 2017,
but this dispute was “immaterial” because the undisputed evidence established that [Smith]
“had failed to meet even [the] quarterly travel requirement.” The District Court concluded
that the failure to comply with the quarterly requirement “substantiated” the letter’s 50%
travel requirement, and therefore the quarterly travel requirement could be considered.
Smith appealed to the Ninth Circuit, arguing that the Galbreath Rule prohibited the District
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Court from considering termination reasons which were not specifically referenced in the
discharge letter. In response, Charter argued that the Galbreath Rule had been superseded
because the Rule relied on § 39-2-801, MCA, which was amended in 1999 to allow
employers to use reasons other than the reason provided in the discharge letter to defend
against a wrongful discharge action.
¶6 The Ninth Circuit was unable to determine whether to apply the Galbreath Rule or
whether the Galbreath Rule was superseded by the 1999 statutory amendments. It
concluded, “In sum, if the sole question is whether [Charter] has ‘good cause,’ then the
district court properly granted summary judgment to Charter. But if the Galbreath [R]ule
remains good law, then genuine issues of material fact remain, and accordingly, the district
court erred by granting summary judgment to [Charter].” The Ninth Circuit certified a
version of that question to this Court.
STANDARDS OF REVIEW
¶7 “M. R. App. P. 15(3) permits this Court to answer a question of law certified to it
by another qualifying court. Our review of the certified question is purely an interpretation
of the law as applied to the agreed upon facts underlying the action.” Murray v. BEJ
Minerals, LLC., 2020 MT 131, ¶ 11, 400 Mont. 135, 464 P.3d 80 (internal quotations and
citations omitted). The scope of our review is limited to the certified question. See
Frontline Processing Corp. v. Am. Econ. Ins. Co., 2006 MT 344, ¶ 31, 335 Mont. 192, 149
P.3d 906.
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DISCUSSION
Whether, in an action for wrongful discharge pursuant to Montana Code Annotated section
39-2-904, an employer may defend a termination solely for the reasons given in a discharge
letter, as the court held in Galbreath v. Golden Sunlight Mines, Inc., 890 P.2d 382 (Mont.
1995), or whether the 1999 statutory amendments have superseded the Galbreath rule.
¶8 The WDEA provides that a discharge is wrongful if it was not for good cause.
Section 39-2-904(1)(b), MCA. “Good cause” means any reasonable job-related grounds
for an employee’s dismissal based on certain factors, including the employee’s failure to
satisfactorily perform job duties, the employee’s material or repeated violation of an
employer’s written policies, or other legitimate business reasons. Section 39-2-903(5),
MCA. In a wrongful discharge action, the Galbreath Rule prohibits courts from admitting
or considering evidence that is collateral or irrelevant to the reason for the employee’s
termination the employer provided in a termination or discharge letter. Galbreath v.
Golden Sunlight Mines, 270 Mont. 19, 890 P.2d 382 (1995).
¶9 Charter argues that the Galbreath Rule has been superseded because it relied on
Swanson, which relied on § 39-2-801, MCA. Section 39-2-801, MCA, was amended in
1999. Charter argues that the amendment to § 39-2-801, MCA, has abrogated Swanson
and, in turn, the Galbreath Rule.
¶10 This Court decided Swanson in 1979. Swanson was predicated on § 39-2-801,
MCA, Montana’s version of a commonly enacted “service letter statute.” Swanson, 182
Mont. at 422, 597 P.2d at 706. In Swanson, St. John’s Lutheran Hospital terminated
Marjorie Swanson, who then requested a written reason for her termination. Swanson, 182
Mont. at 419, 597 P.2d at 705. Swanson’s termination letter stated that she was terminated
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for her “untimely refusal to perform customary and needed services.” Swanson, 182 Mont.
at 419, 597 P.2d at 705. Swanson filed a wrongful discharge action and the district court
found, based on numerous pieces of evidence not included or referenced in her discharge
letter, that Swanson was an employee of questionable value, and Swanson appealed this
finding. Swanson, 182 Mont. at 420-22, 597 P.2d at 706.
¶11 This Court explained that when an employee requests a termination letter from her
employer, this letter is colloquially referred to as a “service letter.” Swanson, 182 Mont.
at 422, 597 P.2d at 706-07. Typically, service letter statutes require the employer to
provide a full, succinct, and complete reason for the employee’s discharge in the letter.
Swanson, 182 Mont. at 422, 597 P.2d at 706. This letter becomes part of the
employer-employee contract and, before 1999, precluded a court from admitting or
considering evidence of other termination reasons beyond what was provided in the letter.
Swanson, 182 Mont. at 422, 597 P.2d at 706-07. In 1999, the Montana Legislature
amended § 39-2-801, MCA, to allow an employer to introduce other reasons for an
employee’s termination besides the reason in the service letter. Section 39-2-801(3), MCA.
¶12 While Swanson’s holding was predicated on § 39-2-801, MCA, the Galbreath
holding was predicated on the Montana Rules of Evidence. Galbreath, 270 Mont. at 19,
890 P.2d at 385. Shortly after returning to work from an injury, Bruce Galbreath, a Golden
Sunlight Mines (GSM) employee, alleged GSM fired him without good cause in violation
of the WDEA. Galbreath, 270 Mont. at 19, 890 P.2d at 384. In Galbreath’s termination
letter, GSM stated that he was discharged for “failure to provide specific documentation
explaining his absence from work.” Galbreath, 270 Mont. at 19, 890 P.2d at 384. During
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trial, the district court admitted evidence suggesting that Galbreath was discharged for
reasons other than the reason GSM provided in his termination letter, including that
Galbreath had been working full-time at his restaurant during his absence from work and
that his injury was not severe enough to prevent him from working at GSM. Galbreath
270 Mont. at 19, 890 P.2d at 385. Galbreath argued that the district court erroneously
admitted this evidence. This Court agreed, holding that the evidence was irrelevant and
inadmissible because it did not support the reasons stated in his discharge letter. Galbreath,
270 Mont. at 19, 890 P.2d at 385 (citing M. R. Evid. 402).
¶13 The reasoning underlying the Galbreath Rule is the application of the Montana
Rules of Evidence. Rule 402 states that “all relevant evidence is admissible, except as
otherwise provided by constitution, statute, these rules, or other rules applicable in the
courts of this state. Evidence which is not relevant is not admissible.” Relevant evidence
is “evidence having any tendency to make the existence of any fact that is of consequence
to the determination of the action more probable or less probable than it would be without
the evidence.” M. R. Evid. 401. In wrongful discharge cases, this Court has determined
that the proffered reason an employer provides in a termination letter is the “fact of
consequence” as to whether the employee was wrongfully discharged. Galbreath, 270
Mont. at 19, 890 P.2d at 385; M. R. Evid. 402. Evidence which does not tend to make the
existence of this proffered reason more or less probable is collateral or irrelevant.
Galbreath, 270 Mont. at 19, 890 P.2d at 385; M. R. Evid. 402.
¶14 GSM terminated Galbreath for not providing the proper documentation explaining
his absence. Galbreath, 270 Mont. at 19, 890 P.2d at 384. Other evidence, such as whether
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he was working at his restaurant during his absence, did not tend to make the fact of
consequence—that he did not provide proper documentation—more or less probable.
Galbreath, 270 Mont. at 19, 890 P.2d at 385. Relying upon Rule 402, this Court held that
“[a]ny collateral reasons suggested by the evidence, other than the sole reason stated in the
discharge letter, were irrelevant, and therefore, inadmissible.” Galbreath, 270 Mont. at 19,
890 P.2d at 385.
¶15 Subsequent case law addressing the application of the Galbreath Rule similarly
reflects analyses grounded in Rules 401 and 402. In Jarvenpaa v. Glacier Elec. Coop.,
1998 MT 306, 292 Mont. 118, 970 P.2d 84, this Court relied on these evidentiary rules to
conclude that the Galbreath Rule did not preclude the introduction of evidence the district
court admitted because it was relevant to the discharge reason provided in the termination
letter. Jarvenpaa, 1998 MT 306, 292 Mont. 118, 970 P.2d 84.
¶16 In Jarvenpaa, Glacier Electric Cooperative (“Glacier”) terminated Donald
Jarvenpaa and provided a termination letter which indicated that Jarvenpaa “detrimentally
affected the morale and the operations of the workplace, and that he had problems
exercising his duties as a supervisor.” Jarvenpaa, ¶¶ 7, 40. Jarvenpaa filed a wrongful
discharge action. Jarvenpaa, ¶ 8. During trial, the district court admitted testimony that
employee moral improved after Jarvenpaa left and the managers who filled Jarvenpaa’s
position handled the workload better than Jarvenpaa. Jarvenpaa, ¶ 38. Jarvenpaa
appealed, contending that the district court erroneously admitted this evidence. Jarvenpaa,
¶¶ 10-11. The Court held that the Galbreath Rule did not apply as “Glacier did not offer
evidence to present collateral reasons for Jarvenpaa’s discharge.” Jarvenpaa, ¶ 41. Rather,
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the Court agreed with the district court’s determination that pursuant to Rule 402, the
“proffered evidence was relevant and admissible because it tended to prove the truth of the
allegations Glacier made in its letter and whether Jarvenpaa was terminated for good
cause.” Jarvenpaa, ¶ 40.
¶17 In Bean v. Mont. Bd. of Labor Appeals, 1998 MT 222, 290 Mont. 496, 965 P.2d 256and McGillen v. Plum Creek Timber Co., 1998 MT 193, 290 Mont. 264, 964 P.2d 18, this
Court’s determination as to whether or not the Galbreath Rule applied to evidence offered
by the employer in WDEA cases reflected similar analyses of Rules 401 and 402. Bean,
¶ 18 (holding that the Galbreath Rule applied because “evidence of incidents of
misconduct allegedly committed by Bean other than that described in the March 18, 1993
Incident Report was irrelevant, and therefore, improperly admitted into evidence”);
McGillen, ¶ 45 (holding that the Galbreath Rule did not apply because “Any testimony
offered with respect to McGillen being disciplined for sleeping on the job was relevant
and, therefore admissible, to tell the jury a possible motive for McGillen placing the ad in
the first place”).
¶18 In the most recent case to address this issue, we reiterated that the Galbreath Rule
did not apply to evidence offered by the employer in a WDEA case because, pursuant to
Rules 401 and 402, the evidence was relevant to determine whether the existence of the
discharge reason in the termination letter was more or less probable. McConkey v.
Flathead Elec. Coop., 2005 MT 334, 330 Mont. 48, 125 P.3d 1121. We stated:
“[G]enerally . . . reasons for discharge other than those set forth in a discharge letter are
irrelevant, and thus inadmissible. We later distinguished Galbreath in Jarvenpaa holding
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that unlike collateral issues, such as those offered in Galbreath, evidence offered to
‘substantiate the reasons [] already given in [the termination] letter’ are admissible.”
McConkey, ¶ 29 (internal citations omitted) (citing Jarvenpaa, ¶ 41).
¶19 Unlike this Court’s holding in Swanson, the Galbreath Rule is not predicated on
§ 39-2-801, MCA. The Galbreath Rule, as consistently applied by this Court, reflects
analyses and applications of the Montana Rules of Evidence. The Rule excludes irrelevant
evidence that does not tend to make the existence of the discharge reason in the termination
letter more or less probable; conversely, the Rule does not exclude evidence that is relevant
to support the stated reason for discharge in the termination letter. Galbreath, 270 Mont.
at 19, 890 P.2d at 385. The 1999 statutory amendments have not superseded the Galbreath
Rule.
¶20 Charter argues that if the Galbreath Rule remains good law then employers who
voluntarily provide a termination letter would be limited in the evidence they may present
as compared to employers who decline to give a letter at the time of termination or await
an employee demand under § 39-2-801, MCA. But all employers are bound by the
Montana Rules of Evidence, irrespective of whether or not a discharge letter is provided.
The Galbreath Rule requires courts to exclude collateral or irrelevant evidence,1
Galbreath, 270 Mont. at 19, 890 P.2d at 385 (emphasis added), but it does not restrict
1
The Ninth Circuit stated that “an employer may not introduce evidence unrelated to the reasons
given in a discharge letter.” Whether or not there is a distinction between “unrelated” evidence
and “collateral or irrelevant” evidence, we point out for the sake of clarity that we have not
previously used the term “unrelated” in our application of the Galbreath Rule.
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courts from considering evidence that supports or substantiates the reason in the discharge
letter by making its existence more probable than not, see M. R. Evid. 401 and 402.
¶21 Our case law reflects the wide range of evidence courts have admitted because it
makes the existence of the reason provided in the discharge letter more or less probable.
We have not applied the Galbreath Rule so strictly as to unfairly exclude evidence an
employer offers which may substantiate the termination reason in the discharge letter.
McGillen, ¶ 45; McConkey, ¶ 30.
¶22 In McGillen, Plum Creek Timber (“Plum Creek”) terminated Jerry McGillen
because he placed an ad in a newspaper falsely stating that his supervisor’s truck was for
sale. McGillen, ¶¶ 7-10. According to McGillen’s termination letter, Plum Creek
terminated him because the false ad was harassment and against company policy.
McGillen, ¶ 11. McGillen filed a WDEA action, and Plum Creek sought to introduce
evidence that McGillen’s supervisor—the target of the fictitious ad—had disciplined
McGillen for sleeping on the job prior to the placement of the ad. McGillen, ¶¶ 12, 41.
McGillen moved to exclude references to any other reasons for his discharge which were
not contained in the termination letter, including any testimony involving his discipline for
sleeping on the job. McGillen, ¶ 41. Plum Creek responded that evidence of the sleeping
incident was necessary for the jury to put the stated reason for the discharge in context.
McGillen, ¶ 41. Relying on Galbreath, the district court held:
The stated reason for the discharge was harassment in violation of the law
and company policy. Clearly, under Galbreath v. Golden Sunlight Mines,
270 Mont. 19, 890 P.2d 382 (1995), [Plum Creek] cannot offer evidence
suggesting that [McGillen] was discharged for other reasons. However,
reference to the incident in which [McGillen] was apparently disciplined for
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sleeping on the job, which apparently immediately preceded the placing of
the ad for which he was discharged, is necessary for the jury to assess the
stated reason for the discharge.
McGillen, ¶ 41. We affirmed the district court’s ruling, holding that the district court
“properly limited testimony regarding the reasons for McGillen's discharge to those stated
in the discharge letter. Any testimony offered with respect to McGillen being disciplined
for sleeping on the job was relevant and, therefore, admissible, to tell the jury a possible
motive for McGillen placing the ad in the first place.” McGillen, ¶ 45.
¶23 Likewise, in McConkey we upheld the district court’s consideration of evidence
which supported the specific proffered reason in the termination letter. McConkey, ¶ 30.
In McConkey, Flathead Electric Cooperative (FEC) terminated Warren McConkey because
it determined McConkey’s recommendations for negotiating new power supply contracts
caused substantial rate increases to the company’s members, thereby negatively impacting
FEC’s finances. McConkey, ¶¶ 10, 30. McConkey filed a WDEA claim, and in addition
to evidence reflecting substantial rate increases, the district court considered evidence of
FEC’s negative financial situation including the company’s debt to equity ratio, the
increased power supply costs, and the necessity to retain bankruptcy counsel to conclude
that FEC fired McConkey with good cause. McConkey, ¶¶ 17, 27. On appeal, we held that
the evidence could be considered because it generally “substantiate[d] the negative
financial impact, referenced in the termination letter, that FEC suffered as a result of
McConkey’s activities.” McConkey, ¶ 30.
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CONCLUSION
¶24 Because the Galbreath Rule is an evidentiary rule predicated on the Montana Rules
of Evidence, it has not been superseded by the 1999 statutory amendments. However,
while the Galbreath Rule precludes admitting irrelevant evidence of collateral reasons for
discharge other than the sole reason stated in the discharge letter, evidence offered to
substantiate the reasons already given in the discharge letter is admissible.
/S/ JAMES JEREMIAH SHEA
We Concur:
/S/ MIKE McGRATH
/S/ DIRK M. SANDEFUR
/S/ LAURIE McKINNON
/S/ INGRID GUSTAFSON
/S/ BETH BAKER
/S/ JIM RICE
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