Batson v. Shiflett

ALPERT, Judge. Stemming from the publication of several leaflets distributed to local members of a national union, A. Spencer Shiflett, Jr. (“Shiflett”), appellee/plaintiff, sued the Industrial Union of Marine and Shipbuilding Workers of America (“National Union”) and Arthur E. Batson, Jr. (“Batson”), the National Union’s president, appellants/defendants, in the Circuit Court for Baltimore County for damages based on allegations of defamation, intentional infliction of emotional distress, and conspiracy. The National Union and Batson are appealing the favorable determination for Shiflett. We are asked to consider: I. Where an Administrative Law Judge of the National Labor Relations Board resolves a dispute properly before him on unfair labor practice charges, and where a union official reports to the union membership with respect to the fact findings of the Administrative Law Judge, does not the federal labor law preemption doctrine bar state court jurisdiction of a defamation and intentional infliction of emotional distress action based on allegations that statements accurately reporting the Administrative Law Judge’s conclusions were false and malicious?

II

Where an alleged defamatory publication is couched solely in conditional language and contains no allegations of fact, may such a publication afford the basis for a defamation claim?

III

May allegedly defamatory statements made by a national union president to members of a local union with respect to conduct of the local union’s president be deemed to constitute, in an[d] of themselves, such “ex ³⁴⁴ treme and outrageous conduct” as to support a claim of intentional infliction of emotional distress?

IV

Where the alleged victim of intentional infliction of emotional distress continues with his duties as local union president and suffers no symptoms allegedly related to the conduct said to constitute intentional infliction of emotional distress until the lapse of nine months subsequent to said conduct, may the emotional distress allegedly suffered be deemed “severe” as a matter of law? V. Particularly in the context of a trial concerning allegedly defamatory publications by a national union president with respect to a president of one of the national union’s local affiliates, did not the trial judge err in excluding relevant testimony offered by the national union and its president in defense?

VI

Under all of the evidence, is not judgment on a jury award in the total sum of $730,000.00 so excessive as to require the grant of a new trial? Facts and Proceedings The facts underlying this appeal arise from a dispute that began in 1984. Shiflett was then president of Local 33, a local component of the National Union, a body that represents the interests of shipyard workers. He was employed by Bethlehem Steel Corporation (“Bethlehem”), with which the National Union and Local 33 together maintained a collective bargaining agreement covering Bethlehem’s shipyard in Sparrows Point, Maryland.

This agreement was due to expire on August 14, 1984. In March of 1984, Local 33 and Bethlehem executed a new collective agreement. The National Union denied having any knowledge of the negotiations and denied authorizing Local 33 to negotiate the agreement. Bethlehem and Local 33 claimed that Bat-son and the National Union had authorized Local 33 to negotiate the agreement without involving the National Union.

Pursuant to the National Union’s attempt to nullify the agreement, Bethlehem and Local 33 filed unfair labor practice charges with the National Labor Relations Board ³⁴⁵ (“NLRB”) against the National Union. After the charges were heard by an administrative law judge, they were dismissed. Prior and subsequent to the administrative law judge’s decision, six flyers were mailed to Local 33 members and distributed at the shipyard by the National Union. These flyers accused Shiflett and James Harmon, Local 33’s representative to the National Union’s General Executive Board, of various instances of misconduct.

In Flyer 3, which was authored by Batson, Shiflett was accused of committing “crimes of conspiracy, perjury, falsification of records, illegal contract ratification and violation of both the National Constitution and By-laws of your Union.” Appellants describe this flyer as a report of the disposition of the case by Judge Evans, the administrative law judge, and claim that the accusations were justified by the decision. Another leaflet, Flyer 5, accused Shiflett of misuse of Local 33’s monies. The allegations included misuse of petty cash, receiving reimbursement for the same expenses twice, personal use of Local 33 monies, and misappropriating food donation funds. According to Shiflett, Batson and the National Union conducted several heavily attended meetings of the Local 33 membership in December, 1984, and January, 1985, at which Batson repeated the allegations of Flyer 5, called Shiflett a crook, and accused him of lying and committing perjury.

Batson and the vice-president of the National Union, Robert Pemberton, met with management officials of Bethlehem on December 4, 1984; Batson stated that Shiflett immediately would be removed from office for embezzlement and misappropriation of Local 33 monies. Shiflett claims that Bat-son’s allegations quickly spread throughout the shipyard, causing many Local 33 members to believe that Shiflett was a crook and a thief, and that he had been found guilty of the crimes alleged in Flyer 3. Batson and the National Union then called a special election of Local 33 officers because Harmon, the Local’s ³⁴⁶ Executive Secretary, had misused Local 33’s funds. This election was called before Shiflett’s term expired, and was held in August of 1985.

Shiflett ran for re-election, but lost — a loss that he attributes to the election being held in the midst of Batson’s and the National Union’s proliferation of false accusations against him. He claims that Local 33 members refused to accept his campaign literature, and called him a thief and a crook. Shiflett insists that the allegedly false accusations spread by appellants, which triggered negative reactions by Local 33 members, caused him to become extremely upset and nervous; he could not sleep and he became disheveled in his appearance. Finding it extremely difficult to work, at times he would turn his car around and return home.

He became a heavy drinker, used drugs, and eventually, by order of his doctor, required in-patient hospitalization for depression and alcohol abuse. He then received mental health counseling and medication. He claims to have lost control of his life; this claim was supported by the testimony of his doctor, Burton D’Lugoff, Assistant Professor of Medicine and Psychiatry at the Johns Hopkins Medical School. After losing the election for the presidency of Local 33, Shiflett accepted a management position with Bethlehem, which he claims constituted a $17,000 drop in salary from $45,000 to $28,000.

He was laid off in January, 1989. Eventually, he resigned from Bethlehem because of his discomfort there. He then worked several odd jobs, and was employed in a North Carolina pizza shop at the time of trial. On August 1, 1985, Shiflett filed a complaint and demand for jury trial in the Circuit Court for Baltimore County against the National Union, Batson, and Robert Pemberton 1 ,alleging counts of defamation, intentional infliction of emotional distress, and conspiracy.

The case was tried before a jury (the Honorable John F. Fader, II, presiding), ³⁴⁷ and lasted for twelve days. Appellants unsuccessfully moved for judgment at the close of Shiflett’s case and again at the close of their own case. Prior to submission to the jury, the court dismissed the conspiracy count and two of the libel counts. After the jury considered the remaining six defamation counts and the count for intentional infliction of emotional distress, it returned a special verdict in favor of Shiflett for defamation and intentional infliction of emotional distress.

It awarded compensatory damages of $610,000, and $70,000 in punitive damages against National Union, and $50,000 in punitive damages against Batson. On February 28, 1990, judgments were entered in the above amounts. Appellants subsequently filed a Motion for Judgment Notwithstanding the Verdict or, in the Alternative, for a New Trial. The motion was denied.

This appeal then followed. The Law I. Appellants contend that the doctrine of federal labor law preemption bars state court jurisdiction over this defamation action. The crux of appellants’ argument is that federal labor law policy has been violated “by permitting the state court jury in this case to reconsider and redetermine factual disputes resolved by the NLRB with respect to the allegations of Flyer No. 3,” which accused Shiflett of “conspiracy, perjury, falsification of records, [and] illegal contract ratification.” To support their contention, appellants cite a number of Supreme Court and federal cases that have addressed the issue of federal labor law preemption. These decisions, however, do not compel us to conclude that National Labor Relations Act (“NLRA”) policy preempted the subject action.

We hold that federal preemption principles do not deprive Maryland courts of jurisdiction over the case sub judice. ³⁴⁸ Since the 1950’s, the Supreme Court has stressed the primary role to be played by the NLRB in labor dispute resolution. An early decision in this vein was Garner v. Teamsters Union, 346 U.S. 485 , 74 S.Ct. 161 , 98 L.Ed. 228 (1953), in which the Court held that peaceful picketing by members of a trucking union fell within the jurisdiction of the NLRB to prevent unfair labor practices, thus precluding an injunction by a state court. Id. at 487, 74 S.Ct. at 163 . The Court noted that the NLRB had been vested with its powers because Congress evidently considered that centralized administration of specially designed procedures was necessary to obtain uniform application of its substantive rules and to avoid those diversities and conflicts likely to result from a variety of local procedures and attitudes toward labor controversies.

Id. at 490 , 74 S.Ct. at 166 . This reasoning was reiterated in San Diego Unions v. Garmon, 359 U.S. 236, 242-43 , 79 S.Ct. 773, 778 , 3 L.Ed.2d 775 (1959). The Court explained: [t]he governing consideration is that to allow the States to control activities that are potentially subject to federal regulation involves too great a danger of conflict with national labor policy. Id. at 246 , 79 S.Ct. at 780 .

The Garmon Court also created two exceptions to the preemptive power of the NLRB. The Court emphasized that state power to regulate is not barred where the activity regulated was a merely peripheral concern of the Labor Management Relations Act ... [o]r where the regulated conduct touched interests so deeply rooted in local feeling and responsibility that, in the absence of compelling congressional direction, we could not infer that Congress had deprived the States of the power to act. Id. at 243-44 , 79 S.Ct. at 779 . In Linn v. United Plant Guard Workers of America, 383 U.S. 53 , 86 S.Ct. 657 , 15 L.Ed.2d 582 (1966), the Court ³⁴⁹ addressed a question that had “been a recurring one in state and federal tribunals [ ], involving the extent to which the National Labor Relations Act, as amended, supersedes state law with respect to libels published during labor disputes.” Id. at 57 , 86 S.Ct. at 660 .

The Court held that “where either party to a labor dispute circulates false and defamatory statements during a union organizing campaign, the court does have jurisdiction to apply state remedies if the complainant pleads and proves that the statements were made with malice and injured him.” Id. at 55 , 86 S.Ct. at 659 . In so holding, the Court found that both of the exceptions carved out of the preemption doctrine by Garmon were met. Id. at 61-62, 86 S.Ct. at 662 . The Court noted that it believed that states have an overriding interest in protecting their residents from malicious libels.

Id. at 61 , 86 S.Ct. at 662 . Furthermore, it acknowledged that while the NLRB can redress the issuance of defamatory statements made during an election by setting aside that election, it “can award no damages, impose no penalty, or give any other relief to the defamed individual.” Id. at 63 , 86 S.Ct. at 663 . And, “[t]he injury that the statement might cause to an individual’s reputation — whether he be an employer or union official — has no relevance to the Board’s function.” Id. The Court therefore found that preemption was inapplicable in that case, because only state remedies could “compensate the victim and enable him to vindicate his reputation.” Id. at 63-64 , 86 S.Ct. at 663 .

Notwithstanding the Court’s decision in Linn , appellants urge us to reverse the circuit court’s decision to submit the defamation and intentional infliction of emotional distress claims to the jury. Appellants insist that the jury erroneously considered important issues of facts which had already been determined by the NLRB in the underlying unfair labor practices case. They contend that the jury “verdict could destroy an industrial trade union having its roots in earlier times in American labor history.” Furthermore, they argue that the Court in Linn warned that the exercise of state jurisdiction over malicious libel actions ³⁵⁰ stemming from labor disputes would be subject to future reconsideration because of the “propensity of juries to award excessive damages for defamation.” Linn, 383 U.S. at 64 , 86 S.Ct. at 663 . Appellants have quoted the Court out of context.

The Court acknowledged this “propensity of juries,” and therefore limited the availability of state libel remedies in union cases to those instances in which malice can be shown. Id. at 64-65 , 86 S.Ct. at 663-64 . The tone of the Court’s decision demonstrates that the Court was confident about its decision, as it stated, “[w]e believe that under the rules laid down here [malicious libel] can be appropriately redressed without curtailment of state libel remedies beyond the actual needs of national labor policy.” Id. at 67 , 86 S.Ct. at 665 . We therefore reject appellants’ implication that the Linn Court indicated a hesitancy toward state jurisdiction of labor-related libel disputes which would warrant a finding of preemption here.

Our decision that there is no federal preemption here accords with existing Maryland law. In Pemberton v. Bethlehem Steel Corp., 66 Md.App. 133 , 502 A.2d 1101 (1986), Judge Alan M. Wilner (now Chief Judge), for this court, thoroughly reviewed the doctrine of federal labor law premption, as established by the Supreme Court through cases such as those enumerated above. Pemberton involved the business agent of Local 24, a member unit of the National Union, who brought action in the Circuit Court for Baltimore City against Bethlehem Steel and some of its agents and employees for intentional infliction of emotional distress, invasion of privacy, and conspiracy. Id. at 141 , 502 A.2d 1101 .

Pemberton charged that the defendants had mailed to a number of union members documents relating to his prior criminal conviction, had placed him under surveillance, and had sent reports to his wife concerning his infidelity. Id. Pemberton claimed that these actions were in retaliation for a grievance he had successfully brought against Bethlehem Steel for violating the collective bargaining agreement between it and Local 24. Id. at 143 , 502 A.2d 1101 .

The circuit court dismissed Pemberton’s case ³⁵¹ against Bethlehem Steel for lack of subject matter jurisdiction based on the court’s conclusion that defendants’ alleged conduct “would, at least arguably, constitute a violation of either § 7 or § 8 of the National Labor Relations (NLRA, 29 U.S.C. § 157 , 158), and thus fall within the preemptive and exclusive jurisdiction of the [NLRB].” Id. at 143-44, 502 A.2d 1101 . On appeal, we reversed. We began our analysis in Pemberton with a discussion of the relevant NLRA provisions. Section 7 of the NLRA ( 29 U.S.C. § 157 ) guarantees to employees the right to form, join, or assist labor organizations and to bargain collectively through representatives of their own choosing.

Section 8 of the Act ( 29 U.S.C. § 158 ) makes it an unfair labor practice for an employer to interfere with employees in the exercise of their rights under § 7 or to dominate or interfere with the administration of a labor organization. Id. at 145, 502 A.2d 1101 . We recognized that the retaliation for filing a grievance that Pemberton was claiming would arguably constitute a section 8 violation, see id., and quoted Garmon for its preemption rule that “[w]hen an activity is arguably subject to § 7 or § 8 of the Act, the states as well as the federal courts must defer to the exclusive competence of the [NLRB] if the danger of state interference with national policy is to be averted.” Garmon, 359 U.S. at 245 , 79 S.Ct. at 780 (emphasis added). After reiterating the two exceptions to the Garmon rule — for matters of “peripheral concern to the NLRB and for matters “deeply rooted in local feeling” — we applied these to the case before us, involving “tort claims based on State law that arise from conduct arguably prohibited under NLRA, § 8.” Pemberton, 66 Md.App. at 148-49 , 502 A.2d 1101 .

We first noted that these exceptions had been applied in Linn, 383 U.S. at 55 , 86 S.Ct. at 659 , and Farmer v. Carpenters, 430 U.S. 290, 302 , 97 S.Ct. 1056, 1064 , 51 L.Ed.2d 338 (1977), which held that actions for libel and intentional infliction of emotional distress, respectively, stemming from conduct “arguably subject” to the NLRB, ³⁵² did not fall under the NLRB’s exclusive jurisdiction. See Pemberton, 66 Md.App. at 149-51 , 502 A.2d 1101 . We next applied Sears, Roebuck & Co. v. Carpenters ’ standard for arguably prohibited conduct: “namely whether the controversy presented to the Circuit Court ‘is identical to ... that which could have been, but was not, presented to the Labor Board.’ ” Id. at 155 , 502 A.2d 1101 (quoting Sears, 436 U.S. 180, 197 , 98 S.Ct. 1745, 1757 , 56 L.Ed.2d 209 (1978)). We acknowledged that although Pemberton was alleging conduct which arguably would have constituted an unfair labor practice, the matter did not end there, and it was necessary to decide whether there was “something in or arising from the conduct that would be of merely ‘peripheral’ concern to the NLRB but of significant interest to the State.” Id.

We concluded that there was. [W]e do not see that the Board would have any statutory concern as to whether, as an ancillary matter, [the subject] conduct [ ] was sufficiently egregious and damaging to appellant personally to constitute the torts of intentional infliction of emotional distress or invasion of privacy. The same evidence that might justify the NLRB in finding an unfair labor practice might not suffice to establish either one or both of those torts. Id. [66 Md.App.] at 156, 502 A.2d 1101 . Having found that the conduct complained of amounted to more than just an unfair labor practice, we concluded that “State action to redress it is not pre-empted.” Id.

Appellants apparently reject the importance of Pemberton . They cite it in a footnote, reminding us that “[t]his Court is, of course, familiar with how the preemption doctrine may affect state court jurisdiction of common law tort actions arising in the context of disputes governed by the federal labor laws.” The connotation is that it is irrelevant here. We disagree. In the instant case, we must determine whether federal preemption applies when an agency hearing is followed by a state tort action involving some of the same facts.

Such was not the case in Pemberton . Nevertheless, its legal principles are equally applicable here. ³⁵³ Appellants largely rely on Hasten v. Phillips Petroleum Co., 640 F.2d 274 (10th Cir.1981) and General Motors Corp. v. Mendicki, 367 F.2d 66 (10th Cir.1966), to bolster their argument that a preemption holding is required because federal preemption has been applied to deprive state courts of jurisdiction over defamation actions. In Hasten , the Tenth Circuit reiterated the three factors focused upon by the Supreme Court in deciding federal labor law questions: (1) whether there exists a potential for direct conflict between federal labor law and policy and the state or federal cause of action; (2) whether there is a state interest which is ‘deeply rooted in local feeling and responsibility’; and (3) whether adjudication of the federal or state cause of action interferes with the effective administration of national labor policy by deciding issues which are identical to those underlying the labor dispute. Id. at 277 .

Although appellants insist that application of these factors mandates a finding of preemption, we disagree. In Hasten , the court applied Mendicki , in which it had held that an unqualified privilege attached to statements made by the representatives of employer and employee at conferences and collective bargaining sessions convened to adjust employee grievances. Mendicki, 367 F.2d at 70 . The Mendicki Court had cited Linn for the proposition that it was the Congressional intent that full, frank, uninhibited, robust, and wide-open debate between the representatives of the employer and employee in such conferences and bargaining sessions should be encouraged.

Id. at 71 . The Hasten court determined that the reasoning stated in Mendicki , namely “that damage suits predicated on statements made in the grievance procedures would tend to interfere with frank and strong statements of positions in such proceedings ... [was a] rule [which] should logically include the discharge letter required by the [collective bargaining] agreement as well.” Hasten, 640 F.2d at 279 . ³⁵⁴ Upon “considering the factors identified by the Supreme Court,” the court stated that [w]e remain persuaded that federal labor law and policy require the absolute privilege rule as to communications made within the context of proceedings provided for by the collective bargaining agreement and its provisions for a grievance machinery. Id. at 278 . The court then specifically noted that although the Supreme Court has allowed the maintenance of a state court action when it is unnecessary to resolve the merits of the underlying dispute, see Farmer, 430 U.S. at 304 , 97 S.Ct. at 1065 , the instant libel action would “clearly call for adjudication of the merits of the allegations of