Miller v. Fairchild Industries, Inc.

BLOOM, Judge. The dispute that resulted in this appeal, after seven years of spirited litigation, began with an announcement by appellee Fairchild Industries, Inc. (Fairchild), in August 1983, that it intended to close its main plant in Hagerstown, Maryland, thereby putting about 2,800 employees out of work. Three of those employees began the litigation by filing in the Circuit Court for Washington County a complaint against Fairchild and its chief executive officer, appellee Edward G. Uhl, asserting claims for fraud, intentional misrepresentation, and negligent misrepresentation. The complaint was amended to add a claim for abusive discharge; two new parties were substituted for two of the original plaintiffs, continuing the action with the three plaintiffs who are the appellants herein; appellants’ motion for class certification was denied; and the court ruled ³²⁹ that limitations prevented appellants from amending to add 272 more plaintiffs.

Ultimately, all claims were disposed of in favor of appellees, either by dismissal or summary judgment, and this appeal followed. Facts We shall briefly summarize the pertinent facts as gleaned from the pleadings below. At its plant in Hagerstown, Maryland, Fairchild manufactured aircraft, principally the Air Force A-10, and aircraft parts, including sections of the Boeing 757. In 1981, Uhl allegedly advised employees that Fairchild had transferred certain aircraft production work from the Hagerstown plant to another plant where workers “had better attitudes,” allegedly referring to some Hagerstown employees’ vocal opposition to Fairchild’s dumping of toxic wastes in and around its plant.

On 2 September 1982, a Washington County Grand Jury indicted Fairchild on 86 counts of dumping, discharging, and abandoning liquid pollutants in excess of permitted effluent limitations in violation of §§ 8-1418 and 8-1416(b) of the Natural Resources Article of the Maryland Code. Appellants contend that the investigation by the Maryland Attorney General’s Office leading to that indictment was initiated and fueled by information supplied by cooperating members of the affected class of former employees of the Hagerstown plant. Appellants have never identified the specific employees who cooperated with the state in its investigation, however. In March of 1983, Uhl allegedly suggested to a member of the Hagerstown Chamber of Commerce in a private meeting that the Hagerstown plant would be closed and all employees discharged if the Attorney General followed through with his threatened prosecution of Fairchild for toxic waste dumping.

Shortly thereafter, in April of 1983, a Washington County jury convicted Fairchild on five felony counts, and the company was fined $100,000. ³³⁰ In a bulletin distributed by hand at the plant on 29 August 1983, less than four months after Fairchild’s conviction, the company announced the closing of its main plant in Hagerstown and the attendant discharge of its employees. Procedural History The preceding events led three former employees of appellee Fairchild Industries to file a complaint against the company and Uhl on 28 August 1986 purportedly on behalf of themselves and numerous other former employees of the Hagerstown plant. 1 Their complaint alleged that Uhl and Fairchild had made false representations to employees regarding their job security and had fraudulently failed to inform employees in advance of the company’s decision to close its Hagerstown plant. The employees also claimed that appellees had negligently misrepresented the employees’ job security. Appellants premised their fraud and misrepresentation claims on various public and private statements made by Uhl and other Fairchild representatives prior to the plant closing.

First, in February of 1983, the Herald Mail, a Hagerstown newspaper, reported that Uhl predicted a rosy and positive future for the Hagerstown plant, which he said would be busy with work on a contract to manufacture Boeing 757’s (the “757 contract”) through the year 2000. Next, in July of 1983, Uhl allegedly made a speech in which he urged Hagerstown employees to disregard rumors of a plant closing and assured them that the Hagerstown plant would remain in operation for another forty years. 2 Appellants assert that Uhl also indicated that there was no reason for employees not to proceed with plans to make major ³³¹ purchases and/or to take vacations. This speech, referred to as the “tarmac speech,” was allegedly made at a compulsory assembly held on company time on an airstrip at the plant. Finally, in August of 1983, Fairchild mailed the August issue of its internal monthly publication, Fairchild World, to all employees.

The newsletter reported that “deliveries of subassemblies for the Boeing 747 and 757 were about even with last year’s totals both in the second quarter and six months.” World noted that production of Air Force A-10’s was scheduled to cease in early 1984 unless additional orders or sales were received, but that production of spare parts would be “ongoing.” A rise in Fairchild stock was also reported. The complaint alleged that Fairchild’s upbeat predictions about the company’s future belied the fact that officials were at least contemplating closing the Hagerstown plant at the time the statements were made. Appellants supported this claim by citing various statements allegedly made by company officials. For instance, sometime in early 1983, prior to Fairchild’s conviction, Uhl allegedly told members of the Hagerstown Chamber of Commerce that the future of the Hagerstown plant was uncertain and that if the Maryland Attorney General continued “to give Fairchild a hard time,” he would move the company out of state.

Shortly thereafter, Uhl allegedly threatened to close the plant and fire the employees if the Attorney General actually prosecuted the company. On 28 April, a Hagerstown newspaper announced Fairchild’s conviction and reported that the trial court publicly censured the company for making (in the wake of its conviction) inappropriate threats to move the corporate headquarters out of state. Moreover, interrogatory answers submitted by Uhl indicate that as early as May of 1983 he first became aware that the 757 contract might be in jeopardy and might be turned back to Boeing, but did not warn employees. Fairchild put forward evidence indicating that negotiations with Boeing over the fate of the 757 contract were proceeding satisfactorily as late as 4 August 1983.

It was not until 12 ³³² August 1983 that Fairchild asked Boeing to relieve the company of its obligations under the 757 contract and that Fairchild officials first began to question the viability of the Hagerstown plant. On 16 August 1983 the company circulated a bulletin to employees in which it announced impending layoffs at the plant. Finally, Fairchild contends that the company did not actually decide to close the plant until 25 August 1983. Fairchild and Uhl caused the action to be removed to federal court, where they moved to dismiss the suit on the ground that § 301 of the Labor Management Relations Act (“LMRA”) preempted the employees’ state law claims.

During the pendency of appellees’ motion to dismiss, the employees moved to amend their complaint to state a cause of action for retaliatory discharge. The new count alleged that defendants closed the plant in retaliation for employee cooperation with state and federal authorities in their prosecution and criminal conviction of Fairchild for toxic waste dumping. On 5 August 1987, Judge Young of the United States District Court for the District of Maryland granted the employees’ request for leave to amend their complaint, reasoning that the abusive discharge claim “related back” to the original complaint. Moreover, the court concluded that § 301 of the LMRA did not bar the state law claims.

The case was then remanded to the Circuit Court for Washington County. Once back in the circuit court, the employees moved for class certification pursuant to Maryland Rule 2-231 on 17 March 1988. On 1 June 1988 the court entered an order dismissing and/or staying the abusive discharge claims pending final resolution in federal court. The court based its ruling on the failure of the employees to state a claim for abusive discharge and on the court’s conclusion that § 301 of the LMRA preempted the state law claim.

Reasoning that Judge Young’s prior decision in the case was not final as to any issue except dismissal of an unrelated count, the court denied defendants’ motion to dismiss the fraud and misrepresentation claims. ³³³ On 20 July 1988, the court granted the employees’ motion to substitute named plaintiffs, and two new employees were designated as representative plaintiffs of the proposed class of affected former employees. Several days later the court, sua sponte, ordered bifurcation of the trial. The first stage of trial was limited to the issues of the defendants’ liability and the plaintiffs’ entitlement to punitive damages. On 17 January 1989, the court granted the defendants’ motion to dismiss the retaliatory discharge claim for failure to state a claim, but also granted leave to the plaintiffs to plead it more specifically.

The following month, on 17 February 1989, the employees filed their second amended complaint with a revised fourth count (the retaliatory discharge count). The revised count alleged that Fairchild and Uhl had closed the plant for the purposes of (1) retaliating against employees who “blew the whistle” on illegal toxic dumping at the plant and (2) “thwarting and punishing” Washington County and the State of Maryland for the Attorney General’s vigorous enforcement of environmental laws. The employees alleged that the defendants’ conduct violated specific mandates of public policy as expressed in the free speech guarantees of the state and federal constitutions and in the state and federal environmental protection laws, 3 specifically those under which Fairchild was indicted and convicted. By written order dated 18 April 1989, the court again dismissed the retaliatory discharge claim (count four) on the grounds that it was preempted by § 301 of the LMRA and that it failed to state a claim upon which relief could be granted under Maryland law.

After conducting a hearing on the employees’ motion for class certification, the court denied the motion. On 9 February 1990, the employees filed a third amended complaint, which adopted verbatim the substantive allegations ³³⁴ of the previous complaints, but also sought to add 272 specifically identified individuals to the class of plaintiffs. Appellants moved in the alternative to certify the class. On 29 March 1990, the court dismissed the third amended complaint on statute of limitations grounds and denied the class certification motion.

The employees then filed a premature notice of appeal to this court, which was eventually dismissed. On 19 December 1991, defendants filed a motion for summary judgment on the three individual plaintiffs’ claims for fraud and intentional and negligent misrepresentation. The court granted that motion on 14 February 1992, whereupon appellants timely filed the instant appeal. Issues Appellants present six issues for our review: (1) whether § 301 of the Federal Labor Management Relations Act preempts appellants’ abusive discharge claim; (2) whether appellants’ abusive discharge claim failed to state a cause of action under Maryland law; (3) whether appellants’ third amended complaint related back to the original complaint; (4) whether appellants’ attempt to add 272 plaintiffs in a third amended complaint was barred by the statute of limitations notwithstanding Maryland’s common law “savings statute”; (5) whether the trial court erred in denying appellants’ motions for class certification; and (6) whether the trial court erred in granting appellees’ motion for summary judgment on the claims of fraud, intentional misrepresentation and negligent misrepresentation.

A careful review of the record below leads us to the ineluctable conclusion that the trial court properly dismissed the abusive discharge claim for failure to state a claim and properly granted summary judgment in favor of appellees with regard to the fraud, negligent misrepresentation, and intentional misrepresentation claims. Our disposition of these ³³⁵ issues renders moot all of the other issues presented by appellants. 4 Accordingly, our analysis will focus exclusively on appellants’ abusive discharge and misrepresentation claims. I. Abusive Discharge The task before this Court is to determine whether the allegations of appellants’ complaint, taken as true, together with all reasonable inferences to be drawn therefrom, state a cause of action for abusive discharge. 5 In the seminal case of Adler v. American Standard Corp., Maryland joined a host of other states in recognizing this tort, referred to alternatively as retaliatory or abusive discharge. 291 Md. 31, 47 , 432 A.2d 464 (1981). Maryland case law in this area is still quite sparse, but it is clear that a cause of action for abusive discharge will lie only where the employer’s motivation in discharging the employee contravenes some clear mandate of public policy.

Id. In the instant action, the specific mandates of public policy allegedly violated are those expressed in the free speech guarantees of both the federal and state constitutions and in the federal and state environmental statutes. According to appellants, the conduct giving rise to the cause of action was Fairchild’s closing of its Hagerstown plant and the resultant “discharge” of several hundred employees. Appellants reason that this closing violated public policy because it was effectuated for the specific purpose of retaliating against all plant employees for the “whistle-blowing” of several unnamed employees and also for the specific purpose of retaliating against ³³⁶ Washington County and the State of Maryland for perceived rigorous enforcement of environmental regulations.

Although creative, appellants’ attempt to premise their abusive discharge claim on the United States Constitution and the Maryland Constitution does not withstand scrutiny. Constitutional guarantees have been uniformly interpreted to restrain and restrict only the conduct of the government vis-a-vis private individuals; in the absence of state action there can be no violation of constitutional rights. As appellants concede, Fairchild is not a government actor and it did not act in concert with the government. It therefore cannot seriously be argued that Fairchild actually violated the constitution in closing the plant.

Cf, Watson v. Peoples Security Life Ins. Co., 322 Md. 467, 477, 588 A.2d 760 (1991) (‘We do not understand the trial court to have adopted the notion that constitutional rights of free speech and due process restricted the freedom of action of the private employer”). Appellants contend that the lack of state action and the absence of an actual constitutional violation are not fatal to their claim. They reason that, by retaliating against workers who elected to exercise their free speech rights by cooperating with environmental authorities, appellees so offended the spirit and intent of the free speech clauses that they can be fairly said to have violated the specific mandates of public policy expressed in those clauses.

Appellants explain that this type of retaliatory action necessarily chills free speech and is anathema to the strong public policies expressed in constitutional guarantees. There can be no question that a retaliatory plant closing of the nature and for the reason alleged here would have an alarming potential to chill free speech. We cannot, however, say that such closings constitute violations of public policy that would give rise to an abusive discharge claim. The task of defining public policy is best left to elected representatives of the people, and it is well settled that courts should undertake the task only with “the utmost circumspection.” Adler, 291 Md. at 46 , 432 A.2d 464 , quoting Patton v. United States, 281 ³³⁷ U.S. 276, 50 S.Ct. 253 , 74 L.Ed. 854 (1930).

Constitutional prohibitions do not currently extend to private actors. This Court will not do what the framers of the state and federal constitutions themselves declined to do. We will not expand the reach of constitutional restraints. Appellants rely on Kessler v. Equity Management, Inc., 82 Md.App. 577 , 572 A.2d 1144 (1990), asserting that, in allowing an employee to “sue her ‘private’ employer where the employee was fired for refusing to violate another citizen’s constitutional rights,” Kessler expanded the cause of action for abusive discharge.

Appellants’ reliance on Kessler is misplaced. There is, of course, a vast difference between firing someone for refusing to commit a trespass and invade a tenant’s privacy (which happens to be a constitutionally protected interest) and firing an employee for exercising his or her constitutionally protected freedom of speech in such a way as to injure the employer. Kessler held that some conduct may be generally recognized in a civilized society as being so far beyond the pale, even if it has not been legislatively proscribed, that it would be against public policy to permit an employer to make performance of such conduct a condition of employment. That the conduct referred to in Kessler involved an invasion of a constitutionally protected right cannot be taken as meaning that discharge of an at-will employee for exercising his or her constitutionally protected right of freedom of speech to say things detrimental to the employer’s interest would constitute an abusive discharge.

The employee has a constitutional right to speak but not a constitutional right to remain an employee. In short, an at will employee who has been fired cannot rely on Kessler as providing the basis of a suit for abusive discharge merely by asserting that he had a constitutional right to do the act that resulted in his being fired. Appellants also premised their abusive discharge claim on the specific mandates of public policy embodied in state and federal environmental statutes. While the extensive scheme of environmental regulations is certainly compelling evidence ³³⁸ that legislators deem the eradication of pollution and the punishment of polluters to be critical public policy goals, recent Court of Appeals decisions preclude appellants’ reliance on the laws to establish an abusive discharge cause of action.

In Makovi v. Sherwin-Williams Co., 316 Md. 603 , 561 A.2d 179 (1989), and Chappell v. Southern Maryland Hospital, Inc., 320 Md. 483 , 578 A.2d 766 (1990), the Court severely restricted the scope of the abusive discharge tort. Makovi held that the tort is “inherently limited to remedying