THOMAS M. BLEWITT, United States Magistrate Judge.
Plaintiff, Corrections U.S.A. ("CUSA"), filed this action on July 20, 2010, in the United States District Court for the Middle District of Pennsylvania, against the following Defendants: Donald McNany, individually and as President of Pennsylvania State Corrections Officers Association ("PSCOA"); Sam Brezler, individually and as Secretary/Treasurer of PSCOA; and John Miller, individually and as Business Agent of PSCOA. (Doc. 1, p. 1). Plaintiff filed its Complaint pursuant to this Court's diversity jurisdiction under 28 U.S.C. § 1332 in that the parties are citizens of different states and the amount in controversy exceeds $75,000. (Doc. 1, p. 2). Plaintiff Corrections U.S.A. is a corporation formed under the laws of the State of California with a principal address in Auburn, California; Defendants are adult individuals and officials of PSCOA with a principal address in Harrisburg, Pennsylvania. (Doc. 1, pp. 2-3).
In its Preliminary Statement on page 1 of the Complaint, Plaintiff alleges that this action is for "interference with an existing contract and/or relationship and interference with prospective relations to redress the actions of the Defendants." (Doc. 1, p. 1).
As mentioned above, this Court has diversity jurisdiction over this case pursuant to 28 U.S.C. § 1332. Venue in the Middle District of Pennsylvania is proper pursuant
On October 8, 2010, Defendants filed their Answer to the Complaint. (Doc. 10). In their Answer, Defendants admitted to Plaintiffs assertion of jurisdiction and venue. (Doc. 10, p. 1). The parties consented to proceed before a Magistrate Judge pursuant to 28 U.S.C. § 636(c), and on December 6, 2010, U.S. District Judge Caldwell transferred this case to the undersigned for all future proceedings. (Doc. 15).
On April 11, 2011, Defendants filed a Motion for Extension of Time to extend the discovery deadline thirty (30) days, and on April 13, 2011, the Court granted Defendants' Motion, extending the discovery deadline to May 11, 2011. (Does. 16 & 17).
During discovery, Plaintiff did not serve Defendants with any interrogatories or requests for production or admissions and did not attempt to depose Defendants or any other individual. (Doc. 22, ¶ 46; Doc. 24, ¶ 46). On April 22, 2011, Defendants served Plaintiff with a Request for Production of Documents and Interrogatories, but Plaintiff never responded to the discovery requests. (Doc. 22, ¶¶ 47, 48; Doc. 24, ¶¶ 47, 48; Defs.' Ex. 16).
On May 31, 2011, Plaintiff filed a Motion for Extension of Time to Extend the Case Management Deadlines to which Defendants did not object. On June 1, 2011, the Court granted Plaintiffs Motion, extending the discovery deadline to July 31, 2011, and the dispositive motions deadline to September 30, 2011. (Does. 18, 19).
On September 30, 2011, Defendants moved for summary judgment as to all claims and filed both a Brief in Support of their Motion and a Statement of Facts. (Docs. 20, 21, 22). Defendants also submitted sixteen exhibits in support of their Motion. (Doc. 20, Exs. 1-16). On October 20, 2011, Plaintiff filed a Brief in Opposition to Defendants' Motion for Summary Judgement, an Answer to Defendants' Statement of Facts, and an Affidavit in Opposition to Defendants' Motion for Summary Judgment. (Docs. 23, 24, 25).
Defendants' Motion for Summary Judgment is ripe for disposition.
A motion for summary judgment may not be granted unless there is no genuine issue of material fact, and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). The moving party may demonstrate that no genuine dispute as to any material fact exists by citing to pleadings, depositions, answers to interrogatories, admissions on file, and affidavits. Fed.R.Civ.P. 56(c). The court may consider any materials in the record in determining whether there exists a genuine issue of material fact. Fed.R.Civ.P. 56(c)(3). An issue of fact is "`genuine' only if a reasonable jury, considering the evidence presented, could find for the nonmoving party." Childers v. Joseph, 842 F.2d 689, 693-694 (3d Cir.1988) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)).
The burden of proving lack of genuine issue of material fact initially falls upon the moving party. Childers, 842 at 694 (citing Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)). The burden of proof shifts to the nonmoving party, however, when the moving party demonstrates no such genuine issue of fact. Forms, Inc. v. American Standard, Inc., 546 F.Supp. 314, 321 (E.D.Pa.1982), aff'd mem., 725 F.2d 667 (3d Cir.1983). The nonmoving party is required to go beyond the pleadings and by affidavits or by "depositions, answers to interrogatories
In determining the existence of an issue of material fact, the court must consider the evidence in the light most favorable to the nonmoving party. White v. Westinghouse Electric Company, 862 F.2d 56, 59 (3d Cir.1988). As such, the court must accept the nonmoving party's allegations as true and resolve any conflicts in his favor. Id. (citing Gans v. Mundy, 762 F.2d 338, 340 (3d Cir.1985), cert. denied, 474 U.S. 1010, 106 S.Ct. 537, 88 L.Ed.2d 467 (1985); Goodman v. Mead Johnson & Co., 534 F.2d 566, 573 (3d Cir.1976), cert. denied, 429 U.S. 1038, 97 S.Ct. 732, 50 L.Ed.2d 748 (1977)).
As stated, Pennsylvania contract and tort law is applicable to the claims raised in this case. See Acumed, 561 F.3d at 212.
Plaintiff CUSA was incorporated under the laws of California in 1998, and its principal address is in Auburn, California. (Doc. 1, ¶ 4; Doc. 22, ¶ 1; Doc. 24, ¶ 1). CUSA was formed by correctional officers to "provide national representation to correctional officers employed by federal, state and local governments" and receives monetary dues from its members on a monthly basis, collected through payroll deductions which are then forwarded to CUSA. (Doc. 22, ¶¶ 10-11; Doc. 24, ¶¶ 10-11). CUSA members receive benefits and services including, but not limited to: death benefits; comprehensive information about the correctional officer profession; assistance in fighting prison privatization; and lobbying on their behalf for various federal and state legislative issues. (Doc. 25, ¶ 3). Some of the members of CUSA are also members of other associations (hereinafter referred to as "Dual Members"), including Defendant PSCOA. (Doc. 22, ¶ 12; Doc. 24, ¶ 12). Each month, the Commonwealth of Pennsylvania deducts CUSA's monthly dues from the paychecks of Dual Members who have provided written authorization for the Commonwealth to do so. (Doc. 22, ¶ 13; Doc. 24, ¶ 13; Doc. 25, ¶ 6). PSCOA then forwards those dues to CUSA, a procedure outlined in the collective bargaining agreement ("CBA") between PSCOA and the Commonwealth at Article 38, Section 2(b): "Effective April 1, 2006, the Employer will provide a payroll slot to the PSCOA to be used for a voluntary deduction program for membership in Corrections USA." (Id.; Doc. 25, H7; Defs.' Ex. 4, p. 72). As of February 2009, 479 PSCOA members had authorized monthly dues for CUSA membership to be deducted from their paychecks. (Doc. 22, ¶ 17; Doc. 24, ¶ 17).
PSCOA is an unincorporated association with a principal address in Harrisburg, Pennsylvania. (Doc. 1, ¶¶ 5-7; Doc. 22, ¶ 2; Doc. 24, ¶ 2). Since 2001, the PSCOA has been the exclusive collective bargaining representative for all employees of the Commonwealth of Pennsylvania in the Department of Corrections and Department of Public Welfare ("Commonwealth") in the H-1 bargaining unit ("H-1"). (Doc. 22, ¶ 3; Doc. 24, ¶ 3; Defs.' Ex. 2, ¶ 3). Pursuant to the PSCOA's Constitution that internally governs the association, PSCOA is administered by a 13-member executive board ("Board" or "Executive Board"). (Doc. 22, ¶¶ 4-5; Doc. 24, ¶¶ 4-5; Defs.' Ex. 3, pp. 9-12). Since 2001, the PSCOA has been a party to a number of collective bargaining agreements with the Commonwealth regulating the terms and conditions of employment for approximately 11,000 employees in the H-1 bargaining unit, most recently one with a term of July 1, 2008, to June 30, 2011. (Doc. 22, ¶ 6; Doc. 24, ¶ 6).
Defendant McNany was President of the PSCOA from August 2002 until July 2010.
On February 5 and February 24, 2009, CUSA representative Robert Storm ("Storm"), who was also a PSCOA Executive Board member at the time, electronically transmitted via e-mail unencrypted files containing social security information of CUSA members to CUSA. (Doc. 22, ¶¶ 18-19; Doc. 24, ¶¶ 18-19). In a letter dated March 2, 2009, Defendant McNany notified the Dual Members of the breach and advised them on how to protect their identities. (Doc. 22, ¶ 20; Doc. 24, ¶ 20; Defs.' Ex. 5). On May 8, 2009, at a PSCOA Executive Board meeting, Executive Board member Don Kot raised the issue of whether PSCOA should continue its relationship with CUSA due to recent member dissatisfaction, and the Executive Board passed a motion to "terminate [its] organizational membership in CUSA." (Doc. 22, ¶¶ 21-22; Doc. 24, ¶¶ 21-22; Defs.' Ex. 6).
In May 2009, Pinto announced his campaign for the 2010 election of a new PSCOA President and, indicated that he would be forming a "slate of candidates to challenge the other incumbent officers." (Doc. 22, ¶ 23; Doc. 24, ¶ 23).
We note that the incidents which gave rise to Plaintiff's grievance against PSCOA commenced in November of 2009, approximately six months after the PSCOA Executive Board voted to terminate its relationship with CUSA. We discuss these incidents chronologically and in greater detail below.
In early November 2009, Defendants maintain that PSCOA received a letter postmarked November 12, 2009, addressed simply to "Corrections USA" at the PSCOA address in Harrisburg, Pennsylvania. (Doc. 22, ¶ 24). Plaintiff admits this fact. (Doc. 24, ¶ 24). In its Complaint, Plaintiff CUSA alleges that the envelope was addressed to Storm, CUSA's bookkeeper and a PSCOA Executive Board member. However, as stated, in its Response to Defendants' Statement of Facts, Plaintiff admits that the envelope was simply "addressed to Corrections U.S.A." (Doc. 1, ¶ 14; Doc. 24, ¶¶ 24-25). Defendant's Exhibit 8 is allegedly a photocopy of the envelope in question, and it is addressed to "CORRECTIONS U.S.A." at the PSCOA address in Harrisburg, as Defendants assert. (Defs.' Ex. 8).
Upon receipt of the envelope postmarked November 12, 2009, Defendant Brezler, who was responsible for handling PSCOA's mail, opened the envelope, which contained a bank statement for CUSA. (Doc. 22, H 25; Doc. 24, 1125). Defendants maintain that Defendant Brezler opened this envelope "inadvertently" and, Plaintiff asserts that Brezler obtained and opened the envelope "without authorization" from CUSA. (Doc. 22, ¶ 25; Doc. 24, ¶ 25). After this incident, Defendant McNany sent a letter dated November 19, 2009, to CUSA Administrator Nina Salamo-Ashford ("Ashford") via certified mail which notified CUSA that the envelope was "opened inadvertently by clerical error"
On December 1, 2009, at a local union meeting in Huntingdon, Pennsylvania, local union president Jason Bloom ("Bloom"), who was known to support Pinto and eventually became a member of Pinto's slate of candidates, raised an issue about CUSA reflected in the following excerpt from that meeting's official minutes:
(Doc. 22, ¶ 27; Doc. 24, ¶ 27; Defs.' Ex. 10, p. 11).
On December 30, 2009, Defendant McNany sent an e-mail to CUSA President James Baiardi ("Baiardi") informing him of the $45,000 in dues PSCOA paid to CUSA for the years 2007, 2008, and 2009, meaning that CUSA's benefit check to the Costanza family was a "[mere fulfillment of] its obligation to an organization member." (Doc. 22, ¶ 28; Doc. 24, ¶ 28; Defs.' Ex. 10). Defendant McNany requested that Baiardi provide proof, "via a notarized letter ... and/or a copy of the cancelled check," that CUSA paid the Costanza family their benefit. (Id.). Baiardi neither responded to Defendant McNany's email nor fulfilled McNany's request. (Doc. 22, H 29; Doc. 24, ¶ 29).
After the PSCOA Executive Board passed a resolution to terminate its organizational membership in CUSA in May 2009, CUSA's membership in Pennsylvania began to decrease. Individual PSCOA members paying dues to CUSA (collected through payroll deductions) dropped to 313 members (as compared to 479 Pennsylvania members in February of 2009). (Doc. 22, ¶ 30; Doc. 24, ¶ 30).
Defendants also maintain that, subsequent to PSCOA's termination of its organizational membership with CUSA, then-Vice President, and current PSCOA President, Roy Pinto, ceased going to the Commonwealth Academy ("Academy") to advertise the advantages of CUSA membership to incoming corrections officers and that he had not sent anyone to the Academy in his place. (Doc. 22, ¶ 31; Defs.' Ex. 2, ¶ 18; Defs.' Ex. 7, ¶ 16). Plaintiff CUSA and Pinto, however, specifically deny that Pinto stopped going to the Academy after PSCOA voted to end its organizational membership with CUSA. (Doc. 24, ¶ 31; Doc. 25, ¶ 18).
In a letter dated February 9, 2010,
Although Defendant McNany sent the above mentioned letter, neither Defendants nor anyone else at PSCOA took steps to remove CUSA's payroll deduction slot for Pennsylvania corrections officers to continue their individual memberships with CUSA. (Doc. 22, ¶ 33; Doc. 24, ¶ 33; Doc. 20, Ex. 2, ¶ 20). In fact, the payroll deduction slot remained through the end of Defendant McNany's term as President of PSCOA in July 2010. (Doc. 22, ¶ 33; Doc. 24, ¶ 33; Doc. 20, Ex. 2, ¶ 20). Defendants submit that since September 13, 2010, the PSCOA website has advertised CUSA benefits for individual members and includes a link to apply for enrollment in CUSA. (Doc. 22, ¶ 34; Doc. 24, ¶ 34; Doc. 20, Ex. 2, ¶ 21 & Ex. 12).
In the interim, both Defendant McNany's slate of candidates and Pinto's slate of candidates for PSCOA office began preparing and campaigning for the 2010 internal elections. (Doc. 22, ¶ 35; Doc. 24, ¶ 35; Doc. 20, Ex. 2, ¶ 22). During the contentious campaigns, Defendant Miller owned and operated a website entitled "voteno4pinto.com" ("the Website"). (Doc. 22, U 36; Doc. 24, ¶ 36; Doc. 20, Ex. 2, ¶ 22). At some point after Defendant McNany sent out his February 9, 2010, letter but prior to the elections, the Website posted a message stating that Pinto was receiving $1,000 per month as compensation for his work with CUSA, which was relevant to McNany's campaign because, according to Defendants, Pinto had previously misled PSCOA members into thinking that he worked for CUSA on a voluntary basis. (Doc. 22, ¶ 37; Doc. 20, Ex. 2, ¶ 23 & Ex. 13). As proof, Defendant Miller also posted on the Website
In June of 2010, PSCOA held its internal elections, and Pinto and other members of his slate of candidates were declared victorious for their positions. (Doc. 22, ¶ 41; Doc. 24, ¶ 41; Doc. 20, Ex. 2, ¶ 26). On July 20, 2010, the same day Plaintiff filed this instant lawsuit, Pinto was sworn into office as the new President of PSCOA. (Doc. 22, ¶ 42; Doc. 24, ¶ 42; Doc. 20, Ex. 2, ¶ 27).
On or about August 9, 2010, the remainder of Pinto's slate of candidates was sworn into office, after which PSCOA retained the firm Lightman, Welby Stoltenberg & Caputo, the same firm that filed this action on behalf of Plaintiff, to represent it. (Doc. 22, ¶ 45; Doc. 24, ¶ 45; Doc. 20, Ex. 2, ¶ 29).
In giving Plaintiff every favorable inference that can be drawn from the record and the undisputed evidence, we find that there is no genuine issue of material fact with respect to its claims raised in the Complaint. We acknowledge there are certainly disputed facts, but find that under the evidence presented, Plaintiff has failed to establish its Pennsylvania state law claims against Defendants. Therefore, we will grant Defendants' Summary Judgment Motion. See Sharrar v. Felsing, 128 F.3d 810, 817 (3d Cir.1997) (citing Fed. R.Civ.P. 56; Hamilton v. Leavy, 117 F.3d 742, 746 (3d Cir.1997)).
On September 30, 2011, Defendants McNany, Brezler, and Miller moved for summary judgment against Plaintiff CUSA pursuant to Rule 56 of the Federal Rules of Civil Procedure. (Doc. 20). In their Brief in Support of their Motion for Summary Judgment, Defendants present two main arguments: (1) Plaintiff cannot state a cause of action against Defendants because Defendants were acting as officers of PSCOA, a party to the alleged contractual agreement between Plaintiff and individual corrections officers; and (2) Even if PSCOA was not a party to the contractual arrangement, Defendants did not tortiously interfere with existing contractual or business relations or with prospective business relations between Plaintiff and individual
As stated, since this Court has jurisdiction over this case based on diversity, we apply Pennsylvania state law on substantive legal issues. Kernaghan v. BCI Communications, Inc., 802 F.Supp.2d 590, 595 (E.D.Pa.2011) (citations omitted). Pennsylvania has adopted the Restatement (Second) of Torts § 766, with respect to a tortious interference claim. Id. (citations omitted). Restatement (Second) of Torts § 766 provides:
Thus, the Kernaghan Court, 802 F.Supp.2d at 596, quoting CGB Occupational Therapy, Inc. v. RHA Health Servs., Inc., 357 F.3d 375, 384 (3d Cir. 2004), stated that the following elements must be met for a tortious interference claim under Pennsylvania law:
The Kernaghan Court, 802 F.Supp.2d at 596, also stated, "[e]ssential to a right of recovery ... is the existence of a contractual relationship between the Plaintiff and a `third person' other than the Defendant." (quoting Daniel Adams Associates, Inc. v. Rimbach, 360 Pa.Super. 72, 519 A.2d [997] at 1000 (1987). See also Motise v. Parrish, 297 Fed.Appx. 149, 152 (3d Cir.2008) ("[A] party to the contract, may not tortiously interfere with the contract.")). Also, the Kernaghan Court pointed out that "State and federal court applying Pennsylvania law on tortious interference have acknowledged that a tortious interference claim cannot be asserted against a party to the contract." Id. (citations omitted).
We first note that it is unclear whether PSCOA was or is actually a party to any past or present agreements between Plaintiff and the individual corrections officers. (See Doc. 20, Ex. 12, p. 2). Defendants' Statement of Material Facts asserts that, since 2001, PSCOA has been party to a series of collective bargaining agreements, which govern the terms and conditions of employment for its members, with the Commonwealth. (Doc. 22, p. 2, ¶ 6). Plaintiff admits this fact. (Doc. 24, ¶ 6). Plaintiff alleges, though, that PSCOA is not a party to the alleged contractual relationship, and that there is a separate, independent contractual relationship that exists between Plaintiff CUSA and individual corrections officers who are dual CUSPSCOA members. (Doc. 23, p. 5). Plaintiff contends that it is the contractual relationship that exists between it and individual corrections officers which is at issue in this case. While we discuss the merits of the arguments below, we ultimately conclude that even if PSCOA was not a party to the agreements, Plaintiff has not sufficiently shown interference with a business, contractual or prospective business relationship
Defendants argue that right to recovery under Plaintiffs theory as an "action for interference with an existing contract and/or relationship and interference with prospective relations" requires a contractual relationship between Plaintiff and a party other than PSCOA. (Doc. 21, p. 5) (citing Killian v. McCulloch, 850 F.Supp. 1239, 1251 (E.D.Pa.1994); Nix v. Temple University, 408 Pa.Super. 369, 596 A.2d 1132, 1137 (1991)). Defendants maintain that because a corporation cannot tortiously interfere with a contract to which it is a party and because PSCOA acts through its agents and officers, Defendants cannot be considered third parties to the agreements in question. (Doc. 21, pp. 5-6) (citing Nix, 596 A.2d at 1137). Defendants assert that the actions complained of by Plaintiff were those of PSCOA, since no named Defendant made the motion or the ultimate decision to end PSCOA's organizational membership with Plaintiff CUSA. (Doc. 21, pp. 6-7). Rather, the motion to terminate the membership was made by an Executive Board member and the final decision to terminate the membership was made by the Executive Board. Thus, Defendants maintain that "the record shows that it was PSCOA, through its agents, that took the actions complained of in this matter" and, that "for all intents and purposes, it is the PSCOA, and not the named individuals, who are the Defendants in this matter." (Doc. 21, p. 7) (citing Nix, supra; Avins, [610 F.Supp. 308, 318 (E.D.Pa. 1984) ]).
In furtherance of this argument, Defendants submit that Plaintiff named the three Defendants both in their individual capacities and in their capacities as officers of PSCOA ("e.g., `DONALD McNANY, individually and as President of Pennsylvania State Corrections Officers Association,' etc.") and that the Complaint specifically refers to Defendants in their roles as officers of PSCOA. (Doc. 21, p. 6). Defendants additionally note that Plaintiff selectively named the three Defendants and evaded naming PSCOA as a defendant so as to not target "an organization with which it is now again allied, and an officer current President Pinto — who has been its staunchest supporter." (Doc. 21, p. 7, n. 1).
Defendants further argue that PSCOA is a party to the "alleged contractual relationship" because Plaintiff cannot establish that CUSA enjoys a direct contractual relationship with individual corrections officers in Pennsylvania, but, rather, "the relationship is governed, in no small part, by the collective bargaining agreement (`CBA') between PSCOA and the employer of the individual corrections officers, and the Commonwealth," which mandates that the Commonwealth provides to the PSCOA a payroll slot for CUSA membership deductions. (Doc. 21, pp. 7-8).
Defendants conclude this argument by asserting again that PSCOA is a party to the alleged contractual relationships — both current and prospective — and, as such, cannot be held liable for wrongful interference with these relationships. (Doc. 21, p. 8) (citing Abel v. American Art Analog, Inc., 838 F.2d 691, 698 (3d Cir. 1988); Michelson v. Exxon Research and Eng'g Co., 808 F.2d 1005, 1007-1008 (3d Cir.1987)).
On October 20, 2011, Plaintiff filed a Brief in Opposition to Defendants' Motion for Summary Judgment. (Doc. 23). Plaintiff argues as follows: "In this matter, Plaintiff does complain about a contract between itself and PSCOA. It is the relationship between the individual corrections officers and Corrections U.S.A. [CUSA] which is at issue." (Id. at 5). Plaintiff asserts that it entered into agreements with the individual corrections officers that were "separate and apart" from its agreement with PSCOA. (Id.).
Plaintiff seeks to rebut Defendants' argument that McNany, Brezler and Miller were acting as agents of PSCOA in the relevant incidents by arguing that each of these individuals did not act in their official capacity as PSCOA officials, but rather acted independently. Plaintiff argues that Defendant McNany was not authorized to send his February 9, 2010, letter "urging various correctional officers to cease their individual membership in Corrections U.S.A." (Id. at pp. 5-6). Plaintiff also maintains that no evidence leads to either the conclusion that PSCOA directed or authorized Defendant Brezler to open the envelope at issue in November of 2009, and that there is no evidence to support the conclusion that PSCOA directed or authorized Defendant Miller to post copies of CUSA's checks written out to Pinto on the Website. (Id. at 6). In support of these assertions, Plaintiff submits the Affidavit of Roy Pinto (Doc. 25), in which Pinto avers that Defendants McNany, Brezler, and Miller all took their respective actions at issue without authorization. (Doc. 23, pp. 6-7; Doc. 25, ¶¶ 8, 9, 13).
As indicated above, we agree with Defendants that under Pennsylvania law, a party to a contract cannot be held liable for inference with that contract because the tort is defined as "`inducing or otherwise causing a third person not to perform a contract with another ... without a privilege to do so.'" National Data Payment Sys., Inc. v. Meridian Bank, 212 F.3d 849, 856 (3d Cir.2000) (emphasis added) (quoting Glazer v. Chandler, 414 Pa. 304, 200 A.2d 416, 418 (1964)). See also Abel v. American Art Analog, Inc., 838 F.2d 691, 698 (3d Cir.1988); Michelson v. Exxon Research and Eng'g Co., 808 F.2d 1005, 1007-1008 (3d Cir.1987) (quoting Glazer, 200 A.2d at 418); American Food and Vending Corp. v. Full Serv. Vending Comp., 2011 WL 2632798 (M.D.Pa.2011); Kernaghan, 802 F.Supp.2d at 596.
We also agree with Defendants' assertion that, because corporations act through their agents and officers, such agents and officers are not considered third parties to contracts of which their corporation is a party when they are acting in their official capacities. Wagner v. Tuscarora School Dist., Civ. No. 1:04-CV-1133, 2006 WL 167731, at *13 (M.D.Pa. Jan. 20, 2006) (citing Nix v. Temple Univ., 408 Pa.Super. 369, 596 A.2d 1132, 1137 (1991); Avins v. Moll, 610 F.Supp. 308, 318 (E.D.Pa.1984)). See also Belas v. Juniata Cnty. Sch. Dist., No. 1:CV-04-505, 2005 WL 2100666, at *12 (M.D.Pa. Aug. 26, 2005). There is an exception to this rule if the officer's or agent's sole motive in interfering is actual malice toward the plaintiff or if it is against his organization's interest; however, an allegedly improper motive does not necessarily take an officer's or agent's actions out of the scope of his employment. Wagner, 2006 WL 167731, at *13 (citing Killian v. McCulloch, 850 F.Supp. 1239, 1252 (E.D.Pa.1994); Avins,
We find the Defendants' argument that they were acting within the scope of their employment because Plaintiff sued them in their official capacities to be largely irrelevant. While it is true that Plaintiff did name Defendants both individually and as officers of PSCOA, this fact is not determinative. The relevant inquiry to establish whether Defendants were acting within their official capacities requires determining whether the actions complained of fall within the scope of Defendants' employment.
Pennsylvania has adopted the standard for determining whether conduct is within the scope of one's employment from the Restatement (Second) of Agency, which states that certain conduct is within that scope if: "`(a) it is the kind [the employee] is employed to perform; (b) it occurs substantially within the authorized time and space limits [and] (c) it is actuated, at least in part, by a purpose to serve the master...'" Sharratt v. Murtha, 437 Fed.Appx. 167, 172 (3d Cir.2011) (citing Brumfield v. Sanders, 232 F.3d 376, 380 (3d Cir.2000)) (quoting Restatement (Second) of Agency § 228 (1958)). Further, the Third Circuit has held when interpreting Pennsylvania law that "`the mere existence of a personal motivation is insufficient to relieve the employer from liability where the conduct also benefitted him and was within the scope of employment generally.'" CNA v. U.S., 535 F.3d 132, 147 (3d Cir.2008) (citing Eisenberg v. Gagnon, 766 F.2d 770, 783 (3d Cir.1985)) (quoting RESTATEMENT (SECOND) of Agency § 228 (1958)).
In applying this standard to the Defendants' conduct, which included opening the letter addressed to CUSA, allegedly posting the checks on the internet and, sending a letter to CUSA-PSCOA members advising them of the discontinuation of the CUSA-PSCOA organizational relationship, we find that while Defendants McNany and Brezler were acting within the scope of their employment, there exists a genuine dispute as to whether Defendant Miller was similarly acting within the scope of his employment when he collected and allegedly posted checks on the internet showing payment from CUSA to Roy Pinto. Nonetheless, as we will also discuss, we do not conclude that this dispute constitutes a genuine dispute of material fact which would preclude entry of summary judgment for Defendants.
According to PSCOA's Constitution, the President is the "principal executive and administrative officer" and is charged with enforcing "the policies established by the Executive Board." The PSCOA Constitution also states that the President "shall exercise day-to-day supervision over the affairs of the Association, consistent with policies established by the Executive Board." (Doc. 20, Ex. 3, p. 4). When Defendant McNany sent his February 9, 2010 letter to PSCOA members notifying them of the Executive Board's decision to withdraw its organizational membership, it is readily apparent that he was fulfilling his duty as the chief executive and administrative officer of the PSCOA to inform Dual Members of an important change in policy put in place by the Board, as well as alert Dual Members to the possibility of retaining their membership in CUSA. Although McNany's letter was not explicitly authorized by the PSCOA Board, we find that it was implicitly authorized in that the PSCOA President's "interpretation and construction of the [PSCOA's] Constitution shall be accepted and shall be binding upon all parties... pending approval or change of such interpretation or construction of the Constitution by the Executive Board."
We next proceed to address Defendant Brezler's actions, which consisted of opening U.S. mail addressed to CUSA and allegedly disseminating checks, found in that mail, to Defendant Miller. Given Defendant Brezler's authorization to open PSCOA's mail, there is little doubt Brezler was acting within the scope of his employment as Secretary/Treasurer of PSCOA when he, either purposefully or inadvertently, opened an envelope mailed to PSCOA's office in Harrisburg, Pennsylvania, addressed to "CORRECTIONS USA," at the proper PSCOA address. It is entirely reasonable, and it should be expected, that Defendant Brezler would have opened this mail based upon the existing relationship between the two organizations and the fact that the letter was sent to the PSCOA mailing address.
We note that the parties also dispute the contents of the envelope and whether Defendant Brezler provided its contents to Defendant Miller. (See Doc. 20, Ex. 8; Doc. 22, ¶¶ 39, 40; Doc. 24, ¶¶ 39, 40). Given the contentious election campaign, it is conceivable that high-ranking PSCOA officials would, in the scope of their employment, seek to influence the upcoming election by, perhaps, posting incriminating information about a political opponent, which could certainly fall within the scope of employment. Plaintiff vehemently insists, though, that the Secretary/Treasurer would not be expected to remove confidential mail contents and disseminate them to another individual. See Sharratt, 437 Fed. Appx. at 172.
We conclude, though, even when examining the evidence presented in the light most favorable to the Plaintiff as we must do with respect to Defendants' Motion for Summary Judgment, the factual dispute over whether the Defendants' conduct falls within the scope of Defendant Brezler's and Defendant Miller's employment does not preclude entry of summary judgment. As we discuss below, we find that none of the Defendants' actions, even if they occurred outside the scope of their employment, actually interfered with any contractual or business relationship, which is fatal to Plaintiff's tortious interference claim. The law is well-settled that disputes of incidental, non-material facts do not automatically preclude entry of summary judgment on an otherwise properly filed Motion for Summary Judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
In finding that Defendant McNany was acting in his official capacity when he sent his letter dated February 9, 2010, we must also determine whether PSCOA, and thus Defendant McNany, was a party to the alleged contractual or business relationships between CUSA and the individual corrections officers to establish whether Plaintiff can state a claim of third party interference against McNany. See National Data, 212 F.3d at 856; Wagner,
We find the most similar role to the one PSCOA maintains between CUSA and the individual corrections officers in Pennsylvania to be that of a broker or a finder. The Superior Court of Pennsylvania has held that a finder is one who "merely introduces the parties and supplies information," while a broker is the "procuring cause of a ready, willing and able buyer who purchases on the terms and at the price designated by the principal." Amerofina, Inc. v. U.S. Industries, Inc., 232 Pa.Super. 394, 335 A.2d 448, 453 (1975).
We find, however, that it is unnecessary to make a determination on whether PSCOA was a party to any agreement between Plaintiff and individual corrections officers. We conclude that because Plaintiff cannot prove a claim of third party interference against any of the Defendants, even under the assumption the PSCOA is not a party to the relationships, the Defendants are entitled to summary judgment. Specifically, as we address below, we note a conspicuous absence of any harm specifically directed at Plaintiff, as well as an absence of damages sustained by Plaintiff which was caused by Defendants.
Defendants divide this argument into three sub-arguments, addressing: (a) whether Defendants interfered with an existing contractual relationship between CUSA and individual corrections officers; (b) whether Defendants interfered with an existing business relationship between CUSA and individual corrections officers; and (c) whether Defendants interfered with any prospective business relationship between CUSA and individual corrections officers. (Doc. 21). We agree with Defendants' argument that neither the opening of the letter, posting of bank documents on the internet, nor the transmission of Defendant McNany's letter constitute interference with either existing contractual relationships between CUSA and individual corrections officers, or with existing or prospective business relationships between CUSA and individual corrections officers.
Initially, Defendants (Doc. 21, p. 9) correctly lay out the elements of a claim for tortious interference with a contractual relationship in Pennsylvania from Triffin v. Janssen, 426 Pa.Super. 57, 626 A.2d 571, 574 (1993):
1) the existence of a contractual relationship;
3) the absence of a privilege or justification for such interference; and
4) damages resulting from the defendant's conduct."
Specifically with regard to the third element of interference with a contractual relationship, Defendants assert that whether a defendant has privilege or justification for an alleged interference is determined by the "`rules of the game,' or the area of socially acceptable conduct which the law regards as privileged." (Doc. 21, p. 9) (citing Barmasters Bartending School, Inc. v. Authentic Bartending School, Inc., 931 F.Supp. 377, 386 (E.D.Pa. 1996)). Defendants further submit six factors, drawn from Phillips v. Selig, 157 F.Supp.2d 419, 426-427 (E.D.Pa.2001), for the Court to consider in evaluating whether a particular course of conduct lacked privilege or justification:
Brooks v. Systems Mfg. Corp., No. Civ.A. 03-1523, 2003 WL 23023826, at *5 (E.D.Pa. Dec. 18, 2003) (emphasis omitted) (quoting Phillips v. Selig, 157 F.Supp.2d 419, 427 (E.D.Pa.2001) (citing Restatement (Second) of Torts § 767 (1982)); Triffin, 626 A.2d at 574; Adler, 393 A.2d at 1184.
There is no dispute that there existed contractual relationships between Plaintiff CUSA and individual PSCOA members; thus, the first element of Plaintiffs interference with an existing contractual relationship claim is satisfied. See Acumed, 561 F.3d at 212. The second element of a prima facie case of tortious interference requires that the defendant acted with the "specific purpose" of causing the plaintiff harm. Phillips v. Selig, 959 A.2d 420, 429 (2008) (quoting Glenn v. Point Park College, 441 Pa. 474, 272 A.2d 895, 899 (1971)). Pennsylvania courts have held that this tort "`is an intentional one: the actor is acting as he does [f]or the purpose of causing harm to the plaintiff.'" Phillips, 959 A.2d at 429 (quoting Glenn, 272 A.2d at 899).
The Pennsylvania Supreme Court has held the second and third elements of a tortious interference claim are intertwined: "`[t]he absence of privilege or justification in the tort under discussion is closely related to the element of intent.'" Hopkins v. GNC Franchising, Inc., 288 Fed.Appx. 871, 873-874 (3d Cir.2008) (quoting Adler, Barish, Daniels, Levin and Creskoff v. Epstein, 482 Pa. 416, 393 A.2d 1175, 1183 (1978)). For a claim of interference with an existing contractual relationship, Pennsylvania has adopted the formulation under the Restatement (Second) of Torts, which emphasizes whether the conduct at issue was "proper" under the specific circumstances, rather than whether it was "privileged." Hopkins, 288 Fed.Appx. at 874 (citing Adler, 393 A.2d at 1184 n. 17). See also Windsor Sec., Inc. v. Hartford Life Ins. Co., 986 F.2d 655, 660 (3d Cir. 1993); Phillips, 959 A.2d at 429.
In examining these factors, the Pennsylvania Supreme Court has held that "when the purpose of the defendant's conduct is, in whole or in part, to protect a legitimate right or interest that conflicts with the interests of the plaintiff, `a line must be drawn and the interest evaluated.'" Phillips, 959 A.2d at 430 (quoting Glenn, 272 A.2d at 899). These kinds of claims should undergo an analysis focused on whether
Phillips, 959 A.2d at 430.
Under the fourth element, a plaintiff claiming interference with an existing contractual relationship in Pennsylvania must demonstrate "`lost pecuniary benefits flowing from the contract itself; other losses, such as emotional distress and loss of reputation, are consequential harms.'" Shiner v. Moriarty, 706 A.2d 1228, 1238 (Pa.Super.Ct.1998), re-argument denied, (Pa.1998). Lost profits stemming from a breach or interference with a contract are recoverable if: "(1) `there is... evidence to establish the damages with reasonable certainty;' (2) the damages `were the proximate cause of the wrong;' and (3) the damages `were reasonably foreseeable.'" Brisbin v. Superior Valve Co., 398 F.3d 279, 289 (3d Cir.2005) (quoting Advent Sys. Ltd. v. Unisys Corp., 925 F.2d 670, 680 (3d Cir.1991)). These lost profits "`cannot be recovered when they are merely speculative.'" Brisbin, 398 F.3d at 289 (quoting Delahanty v. First Pa. Bank, N.A., 318 Pa.Super. 90, 464 A.2d 1243, 1258 (1983)). Although the alleged damages need not be exact, the evidence presented should establish them "`with a fair degree of probability.'" Brisbin, 398 F.3d at 289 (quoting Exton Drive-In, Inc. v. Home Indemnity Co., 436 Pa. 480, 261 A.2d 319, 324 (1969)). Defendants argue it is "apparent" that Defendants Miller and Brezler did "absolutely nothing" to interfere with the alleged relationship between Plaintiff and its members or prospective members. (Doc. 21, p. 9). The Defendants further state that Defendant Brezler's only act at issue was an inadvertent opening of a letter addressed to Plaintiff CUSA, which was immediately corrected and brought to Plaintiffs attention. (Id. at pp. 9-10). Defendants submit that even if the checks posted on the Website by Defendant Miller were contained in the envelope opened by Brezler, this posting was a criticism of Pinto, an upcoming opponent in a contentious election campaign, not an attack on Plaintiff. (Id. at p. 10). Thus, the Defendants maintain that the only real inquiry at issue is whether Defendant McNany's "wholly authorized actions" as acting President of PSCOA in sending out his February 9, 2010 letter breach a privilege by jeopardizing CUSA's ability to take full advantage of prospective PSCOA members in its organization. (Id.). Based on the undisputed evidence detailed above, we agree entirely with Defendants that Miller's and Brezler's actions did not interfere with the relationship between Plaintiff and its members or prospective members. We also agree with Defendants that the crux of Plaintiffs interference with a contractual relationship is really levied only against Defendant McNany, and thus proceed to address solely whether McNany's February 9, 2010 letter breached a privilege which specifically targeted, and caused damage to, Plaintiff.
We find that there is no genuine dispute of material fact with regard to Defendant McNany's conduct and that Defendants are thus entitled to judgment as a matter of law with regard to Plaintiff's tortious interference with existing contractual relationships claim. Defendant McNany's February 9, 2010 letter to members stated:
Defendants continue by arguing that Plaintiff also cannot establish that any damages were sustained, as it is clear that PSCOA's members' contributions to CUSA have "hardly been consistent." (Doc. 21, p. 11). The Defendants cite to their Statement of Facts and evidence cited therein as support, which states that in February 2009, 479 PSCOA members were also contributing to CUSA, but in January 2010, CUSA membership in Pennsylvania had dropped to 313, even prior to the date of Defendant McNany's February 9, 2010 letter. (Doc. 22, ¶¶ 17 & 30). Plaintiff admitted both of these Statement of Facts and, as such, they are undisputed. (Doc. 24, 11 17 & 30).
Defendants' assert that the level of contribution to CUSA by PSCOA members was always based on the members' individual decisions and that, even if they did contribute, their relationships with CUSA could be terminated at will. (Doc. 21, p. 11). Defendants conclude this argument by stating that Plaintiff CUSA cannot prove that Defendants' actions caused it to suffer any damages due to "the rather fluid and unpredictable nature of membership." (Id.) (citing International Travel Arrangers v. NWA, Inc., 991 F.2d 1389
Proceeding to the second sub-argument, the Defendants assert in their brief that they have not improperly interfered with an existing business relationship of Plaintiff. (Doc. 21, p. 12). Defendants first lay out the elements of such a claim from Fineman v. Armstrong World Indus., Inc., 980 F.2d 171, 186 (3d Cir.1992), in which the Third Circuit held that a Plaintiff must prove that:
(Doc. 21, p. 12).
The Defendants argue that Plaintiff CUSA likewise cannot satisfy the tortious interference with an existing business relationship claim for much the same reasons that it cannot state a claim for interference with a contractual relationship. (Id.)
We again agree with the Defendants that, based on the undisputed evidence submitted, there is simply insufficient evidentiary support for Plaintiff's tortious interference with an existing business relationship claim.
First, we conclude that the evidence fails to show that Defendants acted with the "specific purpose" of harming Plaintiff CUSA or that the interference and harm were ever carried out intentionally. See Phillips, 959 A.2d at 429. Evaluating each of the Defendants' actions in turn, we find that when Defendant McNany sent out the letter dated February 9, 2010, to PSCOA members, he was not acting with the specific intent to harm CUSA, but, rather, he was fulfilling his responsibilities as the chief administrative and executive officer of PSCOA by notifying members of the Executive Board's decision to terminate its organizational membership with CUSA. (See Doc. 20, Ex. 3, p. 4). Further, even assuming that the envelope addressed to "CORRECTIONS USA" was opened intentionally by Defendant Brezler and did contain CUSA checks and, that Brezler provided those checks to Defendant Miller to post on his Website, as we must assume in considering the evidence in a light most favorable to Plaintiff, we do not find that either Brezler or Miller acted intentionally to harm CUSA. Instead, the evidence leads to the conclusion that Defendants Brezler and Miller performed these actions with the intent to harm, if anyone, Roy Pinto, the leader of the opposing slate of candidates during an intense election campaign and simply another PSCOA official, not the CUSA organization.
Further, even if Defendants' conduct was specifically intended to harm Plaintiff CUSA, we find that their actions were
Similarly, we conclude that both Defendant Brezler's and Defendant Miller's respective actions regarding the providing and posting of CUSA checks on the Website were to protect their own interests in getting reelected as officers of PSCOA and, again, were not intended to harm CUSA specifically but to damage the reputation of an opposing candidate. We find all of these actions of Defendants were "proper" under appropriate standards of union leadership and politics. See Phillips, 959 A.2d at 430.
Lastly, the evidence presented fails to demonstrate that Plaintiff suffered any loss regarding membership and/or contributions as a result of Defendants' actions.
Lastly, Defendants assert that they did not improperly interfere with prospective business relationships between Plaintiff and PSCOA members. (Doc. 21, p. 13). To satisfy this claim, the Defendants maintain that Plaintiff must prove the following elements outlined by the Court in Thompson Coal Co. v. Pike Coal Co., 488 Pa. 198, 412 A.2d 466, 471 (1979): "1) a prospective contractual relation; 2) the purpose or intent to harm the plaintiff by preventing the relation from occurring; 3) the absence of privilege or justification on the
Defendants allege that a prospective contractual relation "`is something less than a contractual right, something more than a mere hope.'" (Id.) (citing Santana Prods. v. Bobrick Washroom Equip., Inc., 401 F.3d 123, 140 (3d Cir.2005), quoting Thompson Coal, 412 A.2d at 471)). Defendants contend that to prove a prospective contractual relation, Plaintiff must demonstrate an "objectively reasonable probability that a contract will come into existence." (Doc. 21, pp. 13-14) (citing Schulman v. J.P. Morgan Inv. Mgt., Inc., 35 F.3d 799, 808 (3d Cir.1994)).
The Defendants again assert that, for the same reasons thoroughly discussed above, Plaintiff cannot satisfy a claim for improper interference with prospective business relations and that, additionally, it is "rather clear" that the alleged relation constitutes the "`mere hope' category," especially because Plaintiff "made no attempt to reach out to prospective members by failing to attend Academy sessions." (Doc. 21, p. 14). Defendants cite to McNany's Affidavit as support. (Doc. 20, Ex. 2, ¶ 18). Pinto disputed this in his Affidavit. (Doc. 25, ¶ 18).
As mentioned above, it is not in dispute that Plaintiff CUSA and individual corrections officers in Pennsylvania had existing contractual relations. Regarding Plaintiffs alleged prospective contractual relations, we find, as Defendants contend, that these are based on nothing more than mere hope. Any contractual relation between CUSA and individual corrections officers may be terminated at any time by the corrections officers, absent any outside influence of PSCOA. (Doc. 21, p. 11). We also note that Defendant McNany did not even attempt to make PSCOA members' relationships with CUSA "more expensive or burdensome." See Acumed, 561 F.3d at 212 n. 9 (quoting Gemini Physical Therapy & Rehab., Inc. v. State Farm Mut. Auto. Ins. Co., 40 F.3d 63, 66 (3d Cir.1994) ("[I]n Pennsylvania, a party is not liable for tortious interference with prospective business relations for `merely making a third party's performance of his contract with another party more expensive or burdensome.'")).
Defendants additionally assert that Pennsylvania individual membership with CUSA had always been "fluid and unpredictable," which, again, Plaintiff does not expressly dispute. (Id.). Furthermore, Plaintiff adduces no evidence which shows that any of Defendants' actions led to the drop in membership. Thus, under the undisputed evidence presented, we cannot conclude that any prospective contractual relations existed between Plaintiff CUSA and individual corrections officers in Pennsylvania.
Accordingly, based on the forgoing, we shall grant Defendants' Motion for Summary Judgment (Doc. 20) with respect to all of the claims in Plaintiffs Complaint.
An appropriate Order and Judgment follows.