RICHARD D. BENNETT, District Judge.
The Plaintiff Ireneusz Ziemkiewicz asserts claims against his former employer Defendant R & L Carriers Shared Services, LLC, and the Defendant R + L Carriers, Inc. (collectively, "Defendants") for defamation, unlawful interference with contract, and unlawful interference with prospective economic benefit, based on allegations that the Defendants falsely represented to prospective employers that he had refused a drug test, making him ineligible to drive a commercial truck under the Federal Motor Carrier Safety Regulations, codified in Title 49 of the Code of Federal Regulations. Pending before this Court are Plaintiff's Motion for Partial Summary Judgment (ECF No. 104), Defendant R + L Carriers, Inc.'s Motion for Summary Judgment (ECF No. 108), and Defendant R & L Carriers Shared Services, LLC's Motion for Summary Judgment (ECF No. 109). Also pending are Defendants' Choice of Law Brief (ECF No. 80) and Plaintiff's Choice of Law Brief (ECF No. 103) on the issue of punitive damages. A hearing was held on January 27, 2014.
The Plaintiff, Ireneusz Ziemkiewicz, is a Pennsylvania resident who was formerly employed as a commercial truck driver at Defendant R & L Shared Services, LLC's ("Shared Services") Hagerstown, Maryland terminal. Am. Compl. ¶¶ 1-3, 10, ECF No. 12; Deposition of Ireneusz Ziemkiewicz 73, ECF No. 109-2. Defendant R + L Carriers, Inc. ("Carriers") is a holding company that owns a portion of Shared Services but does not engage in motor carrier operations. Ziemkiewicz, who had been a truck driver for approximately fifteen years, worked for Shared Services for approximately five months from January 2011 through June 17, 2011. Am. Compl. ¶¶ 15, 21-22, 35. He was hired by Shared Services employee Charles Stefaniak, who had recently started work as Terminal Manager at the Hagerstown, Maryland service center. Deposition of Charles Stefaniak 21, 39, 120, ECF No. 109-3. During Ziemkiewicz's employment, Shared Services discovered that although the Plaintiff had listed only one previous accident in his job application, he had been involved in seven total accidents. PX 24 at D000062-64, ECF No. 109-5. Ziemkiewicz
On June 17, 2011, Stefaniak called the Plaintiff to the office for a meeting. According to Stefaniak, the purpose of the meeting was to deliver Ziemkiewicz a written warning for damaging freight and to inform him that he had been selected for a random drug test in accordance with Department of Transportation Regulations. Stefaniak Dep. 23-24, 29-30. At the beginning of the meeting, Stefaniak contends that he had placed a drug test sample cup on his desk. Id. at 24, 36. Stefaniak also stated that he had prepared to give Ziemkiewicz the accompanying paperwork for the drug test. Id. at 13-14; Pl.'s Exs. L D000035, (Shared Services' internal Random Controlled Substance Test Selection form with Terminal Manager Instructions); Pl.'s Ex. N (Federal Drug Testing Custody and Control Form), ECF No. 104-2. Stefaniak states that Ziemkiewicz saw the cup on the desk and asked if it was for him. Stefaniak testified to then informing Ziemkiewicz that the cup was for his random drug test and that, after discussing the damaged freight incident, Ziemkiewicz would be required to report to Health@Work, the employee clinic. Stefaniak Dep. 24-26, 36-37; Emails of July 1, 2011, Pl.'s Ex. CC, D000036-37, ECF No. 104-2. Stefaniak and Ziemkiewicz then discussed the written warning for the damage to freight. During this conversation, Ziemkiewicz disagreed with the determination that a warning was warranted and resigned his employment. Stefaniak Dep. 22-23. Stefaniak testified that he attempted to calm Ziemkiewicz down and told him that the incident was minor and not worth resigning over. Id. Ziemkiewicz turned in his time and fuel cards, and left the office. According to Stefaniak, Ziemkiewicz did not sign the warning for damaging freight or take the sample cup and drug testing paperwork. Id. at 22-26.
However, Ziemkiewicz's account of the meeting differs significantly from Stefaniak's. Ziemkiewicz flatly denies seeing a sample cup or paperwork and denies that any drug test was mentioned at this meeting.
Later the same day, Stefaniak made handwritten notes of the meeting so that he would not later be accused of terminating the Plaintiff.
Following the meeting, Penny Foley, a Safety Compliance Coordinator at Shared Services headquarters in Wilmington, Ohio could not locate the results of Ziemkiewicz's scheduled random drug and alcohol screen in the company computer system. Deposition of Penny Foley 24, ECF No. 109-13; Emails of July 1, 2011, Pl.'s Ex. CC, D000036-37, ECF No. 104-2. She asked Stefaniak by email if he had the results, and in response, Stefaniak briefly recounted the events of the June 17, 2011 meeting. Pl.'s Ex. CC, D000036-37. Based on Stefaniak's reply email, Foley preliminarily determined that Ziemkiewicz had refused a drug test. Foley Dep. 26. In order to confirm her interpretation of the events, Foley contacted Sheila Phillips, another Shared Services Safety Compliance Coordinator in the same office. Phillips Dep. 24; Pl.'s Ex. CC, D000036-37. Phillips responded with the final decision that the Plaintiff refused the drug test, confirming Foley's conclusion. Foley Dep. 26; Phillips Dep. 25. Stefaniak took no part in the determination, other than reporting the events of the meeting. Stefaniak Dep. 79.
In a letter to the Plaintiff dated June 30, 2011 and received by the Plaintiff on July 9, 2011, Foley stated that his conduct amounted to a "Positive Drug and/or Alcohol Test Result," and informed him that in order to return to safety-sensitive duty, he would be required to submit to an evaluation and testing by a Department of Transportation Substance Abuse Professional pursuant to 49 C.F.R. pt. 40 subpt. O. Pl.'s Ex. D, D000051, ECF No. 104-2; Foley Dep. 28-29. Ziemkiewicz contends that he telephoned the Wilmington, Ohio office many times to attempt to challenge to determination that he refused the drug test. Foley Dep. 31-32. Foley informed her supervisor, Gary Moyer, that she was receiving multiple daily calls from Ziemkiewicz regarding the refusal determination. Id. 37, 63, 8-9. Moyer told the Plaintiff to stop calling Foley. Ziemkiewicz Dep. 27-30.
As a result of the Plaintiff's challenge to the refusal determination, Shared Services' Human Resources Department, also located in Wilmington, Ohio, further reviewed the matter. Karen Curl, the Director of Human Resources, spoke to Ziemkiewicz and Stefaniak and concluded that the Plaintiff did refuse the drug screen. Deposition of Karen Curl 22, 28, ECF No. 109-15. In particular, she noted that Ziemkiewicz's responses to her questions were "evasive," while Stefaniak's account was "very credible." Curl Dep. 14-15, 51-52, 65. Curl also noted Ziemkiewicz's past performance and credibility issues during
Prior to his resignation from Shared Services, the Plaintiff had applied to work at the United Parcel Service ("UPS"). See Application of May 12, 2011, UPS000001-02, ECF No. 109-16. By the time he received the June 30, 2011 letter informing him of the positive test, Ziemkiewicz was already employed by UPS. The Plaintiff testified that because he was concerned about the effect of the refusal determination, he showed the letter from Shared Services to his manager at UPS, Michael Schnabel. Ziemkiewicz Dep. 168. Eventually, UPS terminated the Plaintiff on August 31, 2011, stating that he "wasn't living up to the standards that [UPS] set forth." Deposition of Michael Schnabel 21-22, ECF No. 109-17. The manager at UPS testified that the letter regarding the drug test refusal did not play a role in the determination to discharge Ziemkiewicz. Id. at 48-49.
The Plaintiff hired a lawyer, who sent Shared Services a letter seeking to "clear up" the matter of the positive test determination. Letter of August 2, 2011 from Thomas Kwiatkowski, Esq., Pl.'s Ex. P, ECF No. 104-2. At that time, the Plaintiff did not file a rebuttal as permitted pursuant to 49 C.F.R. pt. 391. Karen Curl of the Human Resources Department testified that she forwarded the attorney's letter to Shared Services' legal department. Curl Dep. 35-36. On October 11, 2011 and again on November 2, 2011, the Plaintiff wrote to Foley himself, stating that he had not received documents relating to a drug and alcohol test or a request for a test, and requesting that they be sent to him. Pl.'s Exs. Q-R, ECF No. 104-2. Receiving no response, the Plaintiff then enlisted the help of Department of Transportation ("DOT") Representative Jim Keenan, who demanded on Ziemkiewicz's behalf that the Defendants provide documentation relating to the refusal determination. Pl.'s Ex. S, ECF No. 104-2. Ultimately, the Defendants produced the requested documents. Id.
Subsequently, the Plaintiff applied for employment with other carriers. As part of the applications, he signed release forms giving permission to his former employers to disclose his drug and alcohol testing history. See, e.g., Release Form, NFI000032, ECF No. 109-18. The federal Regulations require former employers to respond to requests for substance screening history from prospective employers. 49 C.F.R. § 391.23(g). In response to such requests, the Defendants sent standardized form reports indicating that Plaintiff refused to submit to a DOT-required random drug test. See, e.g., Pl.'s Ex. A, ECF No. 104-2. The reports stated that they were sent from Shared Services, and were signed by Diana Cline, an administrative assistant employed by Shared Services in Wilmington, Ohio who played no substantive role in the refusal determination or the publication thereof. Id.; Curl Decl., ECF No. 116-18. However, Carriers had granted Shared Services the right to use its trademarked brand name, and the reports were printed with a logo reading "R + L® Carriers" across the top. See, e.g., Pl.'s Ex. A, ECF No. 104-2.
The reports, in substantially identical form, were published to several other entities. In July 2011, the Plaintiff applied for work at NFI Interactive Logistics, a carrier in New Jersey, but NFI determined based on Defendants' disclosure of his refusal to take a drug test that he was not
Soon after, the Plaintiff applied for a position with Vitran Inc., a motor carrier in Maryland. Ziemkiewicz Dep. 197-98. Ziemkiewicz signed a release form and Vitran requested Ziemkiewicz's drug screening records from Shared Services. VE000012-13, 24-27, ECF No. 109-22. While awaiting a response, Ziemkiewicz was allowed to begin driving for Vitran. On October 21, 2011, Vitran received the form from Shared Services indicating the drug test refusal. At that time, the Plaintiff was on the road actively driving a Vitran truck. Vitran called him and instructed him to pull over immediately so another driver could take his place because the refusal rendered him ineligible to drive. Kuska Dep. 86-87. He was then terminated. VE000002. On November 2, 2011, Ziemkiewicz first filed a rebuttal to charges of failing to take a drug test, after being terminated from Vitran. VE000003.
Ziemkiewicz alleges that as a result of the Defendants' publications of false information, he has been unable to obtain or maintain employment as a commercial truck driver. He specifically alleges that he was terminated from, or prevented from being hired by, UPS, Black Horse, and Vitran in Maryland, and NFI in New Jersey. Ziemkiewicz also suspects that the Defendants' publication of the refusal determination was the reason he was unable to obtain employment from Weiss Brothers, Chopper 79, and Coca Cola, all in Maryland, but he was unable to confirm through discovery that the report was sent to those companies. Pl.'s Mem. 22, ECF No. 104-1. In addition, the Plaintiff received a response from Schneider Trucking in Pennsylvania to his inquiry about possible employment, but he states that he fears completing the application because of the likelihood that the Defendants will disclose their determination that he refused a DOT-mandated test. Id. at 22 n. 5.
The Plaintiff initially filed this lawsuit in the United States District Court for the District of New Jersey. He then filed an Amended Complaint, ECF No. 12, asserting three causes of action: I. Defamation; II. Unlawful Interference with Contractual Relations; and III. Unlawful Interference with Prospective Economic Advantage. The Plaintiff alleges that Defendants' statements were knowingly, wilfully, maliciously, and/or recklessly false. He seeks compensatory damages for economic and emotional losses, and punitive damages. Although the District of New Jersey was determined to be a proper venue, the case was sua sponte transferred to this Court on February 8, 2013. ECF No. 58.
This Court bifurcated discovery, first allowing discovery as to liability and compensatory damages, with discovery on the issue of punitive damages to follow if necessary after the disposition of summary judgment motions. See Mem. Order, ECF No. 86. Following the expiration of the first period of discovery, the parties moved for summary judgment, and filed briefs regarding choice of law on the issue of punitive damages. During the briefing of the pending motions, this Court held a teleconference on October 8, 2013, and granted a further period of discovery into the corporate relationship between Shared Services and Carriers. Finally, this Court held a hearing on the fully briefed motions on January 27, 2014.
Rule 56 of the Federal Rules of Civil Procedure provides that a court "shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). A material fact is one that "might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A genuine issue over a material fact exists "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. In considering a motion for summary judgment, a judge's function is limited to determining whether sufficient evidence exists on a claimed factual dispute to warrant submission of the matter to a jury for resolution at trial. Id. at 249, 106 S.Ct. 2505.
When faced with cross-motions for summary judgment, a court "review[s] each motion separately on its own merits to determine whether either of the parties deserves judgment as a matter of law." Rossignol v. Voorhaar, 316 F.3d 516, 523 (4th Cir.2003) (internal quotation marks omitted). In undertaking this inquiry as to each individual motion, this Court must consider the facts and all reasonable inferences in the light most favorable to the nonmoving party, id., but only if there is a "genuine" dispute as to those facts. Bouchat v. Baltimore Ravens Football Club, Inc., 346 F.3d 514, 519 (4th Cir.2003) (quoting Anderson, 477 U.S. at 247-48, 106 S.Ct. 2505 (emphasis in original)).
The parties agree that the controlling law on the issues of liability and compensatory damages is the law of the state in which the publications occurred.
There is a fundamental disagreement as to the key facts of the meeting on June 17, 2011 between Terminal Manager Charles Stefaniak and Plaintiff Ziemkiewicz. It is not the province of this Court to make credibility findings when ruling on a motion for summary judgment. Meyers v. Balt. Cnty., Md., 713 F.3d 723, 730 (4th Cir.2013). Based on these diametrically opposed viewpoints, there is more than a metaphysical doubt as to the material facts of this case. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Accordingly, this Court analyzes each Motion based on the version of events advanced by the nonmoving party. Rossignol, 316 F.3d at 523.
The Plaintiff moves for judgment as a matter of law as to liability.
The Plaintiff argues that he is entitled to judgment in his favor because the Defendants' determination that he refused a drug and alcohol test mandated by the Department of Transportation ("DOT") was false as a matter of law. There are two general types of drug and alcohol tests under the Federal Motor Carrier Safety Regulations ("Regulations"): a DOT-mandated test and an employer test. A DOT-required test can only be given in certain circumstances, such as pre-employment, after an accident, or at a random interval. 49 C.F.R. §§ 382.301, 382.303, 382.305. A random drug and alcohol screen must not be announced in advance. 49 C.F.R. § 382.305(k). Rather, the Regulations require that once the employee is selected, he receive notice that the random test is DOT-required, 49 C.F.R. § 382.113, and that he must proceed immediately to the testing site, 49 C.F.R. § 382.305(l). The Regulations also require that the collector who administers the test must use the official Federal Drug Testing Custody and Control Form "to document every urine collection required by the DOT drug testing program." 49 C.F.R. §§ 40.3, 40.45(a). The collector must follow strict procedures in the actual collection of the specimen, including using an individually wrapped, sealed sample cup. 49 C.F.R. § 40.63(c).
Refusing to submit to a DOT-mandated random test is prohibited, and "[n]o employer shall permit a driver who refuses to submit to such tests to perform or continue to perform safety-sensitive functions." 49 C.F.R. § 382.211. Either a refusal or a positive DOT test disqualifies an employee from any safety-sensitive position, including commercial truck driving. 49 C.F.R. §§ 382.211, 382.501. On the other hand, "there are no consequences under DOT agency regulations for refusing to take a non-DOT test." 49 C.F.R. § 40.191(e).
Viewing the facts of the June 17, 2011 meeting in the light most favorable to the Defendants, Ziemkiewicz was selected for a random DOT-required drug test. According to the Defendants, there was a sample cup and testing paperwork on Stefaniak's desk when Ziemkiewicz entered. Ziemkiewicz asked whether the sample cup was for him, and Stefaniak stated that it was. Stefaniak then told Ziemkiewicz to report to Health@Work, the clinic where testing would take place, but not until the meeting regarding the damaged freight was over. For purposes of the Plaintiff's Motion, this Court analyzes the issues upon the above recitation of the facts.
The Plaintiff argues that, under these facts, the Defendants did not inform him that the test at issue was a DOT-required test and he was not instructed to proceed immediately to the test site. In addition, he argues that the Defendants did not follow procedures regarding testing paperwork required by the Regulations and
There is a genuine issue of material fact as to whether the Plaintiff refused a DOTmandated drug and alcohol screen. Pursuant to the Regulations, there are no specific words that an employer must say in order to provide notice that a test is required by the DOT or that the employee must proceed to the testing facility immediately. Likewise, the Regulations do not specifically mandate the timing of the notice, the use of forms by the employer (as opposed to the collector), or whether the employer is allowed to distribute the testing sample cup. 49 C.F.R. § 382.113; Deposition of Pl.'s Expert Donna Rae Smith 112-20, ECF No. 116-3. Rather, the evidence indicates that Ziemkiewicz, as a Commercial Driver's License holder, was knowledgeable about this particular Regulation, especially in light of the immense consequences a refusal can have on employability as a commercial truck driver. Ziemkiewicz Dep. 22-23. The Defendants have also provided evidence that Shared Services only administered DOT-mandated tests, a fact that may have been known to the drivers at the Hagerstown facility, including the Plaintiff. Finally, as a matter of public policy, it would skirt the intent of the Regulation to allow a driver to effectively refuse a test without consequences by resigning from employment immediately upon learning that a test was imminent. Thus, it is possible to "refuse" a drug screen under the Regulations before the employer gives explicit notice that the test is DOT-mandated if the employee has actual notice from the employer by other means. In the light most favorable to the Defendants, a reasonable finder of fact could conclude that Ziemkiewicz was randomly selected for a test and that he knew of his selection. A reasonable inference from such a finding would be that the Defendants properly determined that Ziemkiewicz refused a DOT-required random drug test. In turn, the reports sent in response to other employers' background checks would also be truthful, defeating the Plaintiff's claims. Accordingly, summary judgment is inappropriate because there remains a genuine issue of material fact as to whether the determination that Ziemkiewicz refused a drug test required by the Department of Transportation was false. The Plaintiff's Motion is denied as to that issue.
The Plaintiff next argues that he is entitled to judgment as a matter of law because
First, as discussed above, the Plaintiff cannot at this stage prove as a matter of law that the Defendants provided false information, knowingly or otherwise, regarding his drug and alcohol testing history. Therefore, the Defendants do not automatically lose the protections of Section 391.23(l)(1). As to the requirement that employers preserve testing records that are reported to other companies for one year, 49 C.F.R. § 391.23(g)(4), the Defendants admit that they failed to comply with the Regulation as to the records sent to certain prospective employers. ECF No. Defs.' Opp. 17, ECF No. 116. The Defendants urge, however, that a violation of this ancillary record-keeping requirement should not strip them of the protections of the Regulations. In support of this contention, the Defendants cite the public policy of encouraging safety in motor carrier operations underlying the limitation of liability for former employers to report substance testing history. The Federal Motor Carrier Safety Administration, an administration of the Department of Transportation, is tasked with "the assignment and maintenance of safety as the highest priority, recognizing the clear intent, encouragement, and dedication of Congress to the furtherance of the highest degree of safety in motor carrier transportation."
Even so, the question remains whether, as a result of that failure to preserve the records along with the other circumstances of the refusal determination and subsequent reporting of the drug test history to prospective employers, the Defendants were "not in compliance with the procedures specified for these investigations." 49 C.F.R. § 391.23(l)(2). The dispute procedure for refusal determinations requires the employer to respond to an employee's challenge and give the employee access to the relevant records. 49 C.F.R. § 391.23(i)-(j). Following Ziemkiewicz's resignation, Shared Services employees had extensive communication with him, and he had access to the content of the substantially identical reports. Ziemkiewicz Dep. 27-30; Foley Dep. 37, 63, 8-9. Shared Services employees notified the Plaintiff that they considered his conduct a refusal and that the reports would not be withdrawn. Foley Dep. 37. Although at a certain point, the Defendants did not further respond to the Plaintiff's repeated submissions regarding the same incident, it is not clear that the regulations require that an employer respond to each of multiple requests to revise the same refusal determination. 49 C.F.R. § 391.23(j)(2). The Plaintiff also never filed a rebuttal statement to be sent to prospective employers until after he was already terminated from Vitran. Although the Plaintiff was not satisfied with the ultimate determination, given the extensive contacts between Ziemkiewicz and Shared Services employees about this situation, there is a genuine issue of material fact as to whether the Defendants complied with the employee challenge and dispute resolution aspects of the Regulations. In sum, the Plaintiff is not entitled to judgment as a matter of law because the Defendants may be protected by regulatory and statutory limitations on liability.
The Plaintiff further argues that because of the Defendants' failure to preserve records pursuant to 49 C.F.R. § 391.23(g)(4), they are guilty of spoliation.
As this Court has previously noted, "[s]poliation is the destruction or material alteration of evidence or the failure to preserve property for another's use as evidence in pending or reasonably foreseeable litigation." Goodman v. Praxair Servs., Inc., 632 F.Supp.2d 494, 505 (D.Md.2009) (citations and internal quotation marks omitted). A party seeking spoliation sanctions must prove the following elements:
Id. at 509. First, the Plaintiff's spoliation Motion is untimely. "[T]here is a particular need for these motions to be filed as soon as reasonably possible after discovery of the facts that underlie the motion." Id. at 508. Moving for spoliation sanctions as part of a motion for summary judgment, when discovery has closed and been reopened for an additional period, is not "as soon as reasonably possible." Id. at 508-09.
Moreover, in this case, failing to keep the records at issue was not spoliation. The duty arose upon receipt of the letter sent by Ziemkiewicz's former lawyer on August 2, 2011 to "clear up" the refusal determination. See Curl Dep. 35-36 (testifying that she would have sent the letter from Ziemkiewicz's attorney "straight to legal"). However, regardless of when the duty arose, the Plaintiff cannot show that the Defendants acted with a culpable state of mind or that the records would have been relevant to his claims. There is no evidence in the record indicating that the reports were not preserved as a result of anything other than negligence. Likewise, the Defendants had no duty to request that other businesses preserve the drug screen history notices. Although the companies to whom the reports may have been sent did not preserve them, the prospective employers could still shed light on why Ziemkiewicz was not hired or was fired. The Plaintiff had the ability in discovery to inquire of each company to whom he applied why he was not hired. Because there has been an ample opportunity for the Plaintiff to discover evidence as to the alleged effects of the drug and alcohol screen history reports, his request for the extraordinary remedy of an adverse jury instruction as to causation is denied.
The Plaintiff argues in the alternative that the Defendants should be stripped of their privilege under the Regulations for reporting drug and alcohol testing history as a spoliation sanction. As discussed above in Part I.B, the Plaintiff cites no authority for stripping the Defendants' privilege under Part 391.23(l) because of a technical violation of record-keeping requirements to preserve the records for one year, in the absence of prejudice. Likewise, he cites no authority for the proposition that a violation of a federal Regulation would automatically strip a defendant of a state common law privilege.
In this case, the federal and state privileges can independently exist side by side. See Specialized Carriers & Rigging Ass'n v. Virginia, 795 F.2d 1152, 1155-56 (4th Cir.1986) (field of motor carrier safety is not preempted by federal regulations). In Specialized Carriers & Rigging Association, the Fourth Circuit also recognized that the Regulations do not preempt state law by conflict unless state and federal laws are incompatible, or state laws would decrease highway safety. Id. at 1158. In this case, the state law privileges at issue are compatible with 49 C.F.R. § 391.23(l) and 49 U.S.C. § 508, and therefore do not raise a conflict preemption issue. See 49 U.S.C. § 508(c) (expressly preempting state or local laws that impede the furnishing of safety information). Indeed, courts have applied the privilege under the Regulations along with other statutory and common law privileges in the same case. Dickens v. Werner Enters., No. 1:12CV76, 2012 WL 3061595, at *3, 2012 U.S. Dist. LEXIS 103850, at *8-10 (N.D.W.Va. July 26, 2012) (holding that defendant is free to claim protections of 49 C.F.R. § 391.23(l) and West Virginia common law privilege for former employer reports to prospective employers), report and recommendation adopted in part, 2012 WL 4813545, 2012 U.S. Dist. LEXIS 145618 (N.D.W.Va. Oct.
Thus, each separate privilege is a separate issue. Genuine issues of material fact remain as to whether the Defendants are entitled to the protections of each of the privileges, or whether the Plaintiff can overcome those privileges with sufficient evidence of Defendants' knowing misconduct. Accordingly, the Plaintiff's Motion for spoliation sanctions is denied.
Defendant R & L Carriers Shared Services, LLC ("Shared Services") moves for summary judgment on the basis that, even if the facts are viewed in the light most favorable to the Plaintiff, his claims are barred as a matter of law. Defendant R + L Carriers, Inc. ("Carriers") joins this Motion and also moves for summary judgment on separate grounds. Carriers' Mot. 11 n. 4, ECF No. 108-1. The Defendants argue that even if the fact finder concluded that Stefaniak never told Ziemkiewicz that he was selected for a random a drug test, the Defendants are entitled to judgment as a matter of law because Stefaniak did not make the refusal determination or the allegedly defamatory publications. The Defendants further argue that the defenses of waiver, release, and consent bar the Plaintiff's claims. Finally, the Defendants move for summary judgment on the issue of causation as to several of Ziemkiewicz's claims as they relate to specific publications of the drug screen history reports.
The Defendants move for summary judgment as a matter of law on Count I, arguing that Ziemkiewicz cannot show the malice or intentional misconduct required to sustain a defamation claim under either Maryland or New Jersey law.
The Plaintiff's claims based on publications made to UPS, Vitran, and Black Horse are governed by Maryland law.
If the privilege applies, a plaintiff must show that the defendant acted with malice to overcome it. Bagwell, 665 A.2d at 318; Gohari v. Darvish, 363 Md. 42, 767 A.2d 321, 328 (2001) (to overcome conditional privilege, plaintiff must show that (1) the publication [was] made with malice, that is, with knowledge of falsity or reckless disregard for the truth; (2) the statement was not made in furtherance of the interest for which the privilege exists; (3) the statement is made to a third person other than one whose hearing is reasonably believed to be necessary or useful to the protection of the interest; and (4) the statement includes defamatory matter not reasonably believed to be in line with the purpose for which the privilege was granted). "[I]n the context of the employer-employee relationship, statements made to prospective employers or upon request by industry regulatory authorities fall under a qualified privilege if the employer was acting in good faith.... In that context, there is a legal presumption that the employer is acting in good faith absent a showing by `clear and convincing evidence' that the employer acted with actual malice or intentionally or recklessly disclosed false information about the employee." Hermina v. Safeway, Inc., No. WMN-11-1523, 2012 WL 12759, at *6 (D.Md. Jan. 3, 2012) (citing Md.Code Ann., Cts. & Jud. Proc. §§ 5-423(a)-(b)).
In this case, the purpose of the Federal Motor Carrier Safety Regulations' reporting requirements is the safety of commercial trucking, which is undoubtedly a matter of great public concern. In addition, because the communications were made to prospective employers in the context of the employer-employee relationship, there is a presumption that the Defendants acted in good faith. Hermina, 2012 WL 12759, at *6; Bagwell, 665 A.2d at 317. Accordingly, the Maryland law on conditional privilege applies to this case and the Plaintiff must show malice by clear and convincing evidence to succeed on his claims. When viewing the facts in the light most favorable to the Plaintiff as the nonmoving party, a drug screen was never mentioned at the June 17, 2011 meeting. Thus, a reasonable finder of fact could conclude that Stefaniak acted with reckless disregard for, or actual knowledge of, the falsity of his statements that the Plaintiff was informed that he had been randomly selected for a drug and alcohol test. The Plaintiff may be able to show by clear and convincing evidence that the Defendants acted with the level of malice necessary to overcome the qualified privilege.
The Defendants argue that their liability cannot be based on Stefaniak's conduct, but should only be judged by the actions of the Shared Services employees in Ohio who made the refusal determination and published the drug screen history reports. This argument fails based on the doctrine of respondeat superior, under which "an employee's tortious conduct is the `legal act' of the employer." Fid. First Home Mortg. Co. v. Williams, 208 Md.App. 180, 56 A.3d 501, 520-21 (Md.Ct.Spec.App.2012) (quoting Embrey v. Holly, 293 Md. 128, 442 A.2d 966, 970 (1982) (analyzing malice for punitive damages purposes)). "The employer is thus deemed to be `at fault' for the employee's conduct." Id. Although Stefaniak, the Manager of the Hagerstown, Maryland terminal, did not make the refusal determination or publish the allegedly defamatory letters to other trucking companies, his statements made in the scope of his employment are imputed to his employer. Id. Those statements provide the basis for this action. The refusal determination made by Compliance Manager
The Plaintiff's claim based on publication to NFI is governed by New Jersey law. New Jersey law requires the following elements for a claim of defamation: "(1) the assertion of a false and defamatory statement concerning another; (2) the unprivileged publication of that statement to a third party; and (3) fault amounting at least to negligence by the publisher." DeAngelis v. Hill, 180 N.J. 1, 847 A.2d 1261, 1267-68 (2004) (citing Restatement (Second) of Torts § 558 (1977)). If the matter is of legitimate public concern, even if the person is a non-public figure, the law requires proving actual malice by clear and convincing evidence. Turf Lawnmower Repair v. Bergen Record Corp., 139 N.J. 392, 655 A.2d 417, 426-28, 433 (1995) (noting New Jersey's jurisprudence going beyond the "public figure" analysis of Gertz v. Welch, 418 U.S. 323, 333, 94 S.Ct. 2997, 41 L.Ed.2d 789 (1974)). Whether a matter is of public concern is a question of law for the court to resolve. See Dairy Stores, Inc. v. Sentinel Pub. Co., 104 N.J. 125, 516 A.2d 220, 230 (1986) (a matter that involves "substantial government regulation of business activities and products" is a matter of public concern and requires the plaintiff to prove actual malice).
For the same reasons that the Defendants' Motion is denied as to the Maryland law defamation claims, summary judgment is inappropriate as to the claim for defamation under New Jersey law. A commercial truck driver's drug and alcohol screening history is legitimately a matter of public concern and involves significant government regulation of business activities, giving rise to a heightened standard of proof. All the same, when crediting the Plaintiff's version of the facts, a reasonable jury could find by clear and convincing evidence that the Defendants acted with actual malice in making the publication to NFI. Again, the fact that Stefaniak did not himself determine that the Plaintiff refused the drug test or publish the reports is irrelevant because his statements are treated as those of Shared Services under New Jersey law. See Senna v. Florimont, 196 N.J. 469, 958 A.2d 427, 444-46 (2008) (imputing employees' statements to employer when analyzing whether malice standard applied). Therefore, the Defendants'
The Defendants similarly argue that the Plaintiff cannot show the requisite intent to prove his claims for unlawful interference with contract and unlawful interference with prospective economic benefit. Under New Jersey law, claims for tortious interference with an existing contract and tortious interference with a prospective contractual relationship both require "`malice,' which requires a showing not only that the interference was done `intentionally,' but also that it was `without justification or excuse.'" E. Penn Sanitation, Inc. v. Grinnell Haulers, Inc., 294 N.J.Super. 158, 682 A.2d 1207, 1219 (N.J.Super.Ct.App.Div.1996) (citing Printing Mart-Morristown v. Sharp Elecs. Corp., 116 N.J. 739, 563 A.2d 31, 37 (1989)). Similarly, under Maryland law, interference with a prospective contract must be "done with the unlawful purpose to cause such damage and loss, without right or justifiable cause on the part of the defendants (which constitutes malice)." Natural Design, Inc. v. Rouse Co., 302 Md. 47, 485 A.2d 663, 675 (1984). In the case of an existing contract, "the circumstances in which a third party has the right to interfere with the performance of that contract are more narrowly restricted." Macklin v. Robert Logan Assocs., 334 Md. 287, 639 A.2d 112, 119 (1994) (quoting Natural Design, Inc., 485 A.2d at 674).
Under any of the applicable standards of intent for Ziemkiewicz's claims for unlawful interference with existing and prospective contractual relations, a genuine issue of material fact prevents the entry of summary judgment. A reasonable jury could conclude that Stefaniak's statements are true, which would defeat the Plaintiff's tortious interference claims. See Restatement (Second) of Torts § 772 (1977) ("One who intentionally causes a third person not to perform a contract or not to enter into a prospective contractual relation with another does not interfere improperly with the other's contractual relation, by giving the person truthful information.") (cited by E. Penn Sanitation, Inc., 682 A.2d at 1218). Likewise, a reasonable jury could conclude that Ziemkiewicz's version of events is true and determine that the Defendants' intent rose to the level of tortious interference. Accordingly, the Defendants' motion is denied as to the claims in Counts II and III for tortious interference with contractual relations and prospective economic advantage.
The Defendants argue that Plaintiff's claims are barred as a matter of law by the affirmative defense of waiver.
It is unnecessary to decide in this case whether reporting of a testing refusal is part of the testing process. That is because the claims asserted in this case involve intentional or reckless misconduct, and such claims cannot be waived as a matter of Maryland and New Jersey law.
The releases that the Plaintiff signed when applying for work with prospective employers are contracts that explicitly
The Defendants also argue that the Plaintiff's claims fail as a matter of law because he consented to the publication of the allegedly false drug and alcohol testing history reports.
In a case analogous to this one, Judge Hollander of this Court, then of the Court of Special Appeals of Maryland, held that a former employee, who signed consent forms and had knowledge of the substance of what his former employer would say, consented to publication to prospective employers, barring his defamation claim. Bagwell v. Peninsula Regional Med. Ctr., 106 Md.App. 470, 665 A.2d 297, 316 (Md. Ct.Spec.App.1995) (affirming grant of summary judgment on defamation claim where plaintiff consented to former employer giving prior employment information to prospective employers; plaintiff did not show that consent did not extend to any information including subjective perception of disputed events). The consent defense is also applicable to the Plaintiff's claims for unlawful interference with contract and
In this case, there is a genuine issue of material fact as to whether Ziemkiewicz had knowledge of the contents of the allegedly defamatory communications such that he consented to publication.
The Defendants move for summary judgment on the Plaintiff's claims as they relate to his termination from UPS. The evidence in the record establishes that it was the Plaintiff who showed the June 30, 2011 letter indicating a positive drug test to Michael Schnabel, his supervisor at UPS. The Defendants therefore made no publication to UPS, an essential element of a Maryland defamation claim.
The Defendants further argue that Ziemkiewicz cannot establish as a matter of law that any publication of allegedly defamatory information caused him any damage as a result of being terminated from NFI. The record reveals that NFI deemed the Plaintiff to be unqualified for hiring as a driver based on the Defendants' report of his refusal. NFI000054. There is also evidence that NFI discovered the Plaintiff's accident history in his background check, even though Plaintiff failed to report it in his application, and that he was thus ineligible for hiring. The corporate representative of NFI testified that such a falsification would be grounds to disqualify his application. Deposition of Lee Robledo 53, 56, ECF No. 109-19. Still, the allegedly defamatory publication of the drug and alcohol screen could also have been a proximate cause of injury to the Plaintiff under New Jersey law. Neno v. Clinton, 167 N.J. 573, 772 A.2d 899, 909 (2001) (jury instruction as to "the proximate cause" was not erroneous where trial court instructed jury that there may be more than one proximate cause of an injury). The Defendants' argument as to what "would have" happened is unavailing; such speculation does not warrant a grant of summary judgment. Thus, a question of fact remains as to what actually caused Ziemkiewicz not to be hired by NFI. Accordingly, the Defendants' Motion is denied as to the Plaintiff's claims related to NFI.
The Defendants similarly argue that the Plaintiff cannot as a matter of law show any damages as a result of not being hired by Black Horse were caused by any allegedly defamatory publication at issue. There is also no evidence of the precise reason that the Plaintiff was not offered employment with Black Horse. Deposition of David Schneider 14-15, ECF No. 109-21. Black Horse's corporate representative Schneider testified that Ziemkiewicz's accident history and his failure to accurately report it would have warranted rejection of his application. Id. at 65, 48-49. Schneider noted that there was no rebuttal in the file, but that he would have considered any such document. Id. at 48-49. Furthermore, Schneider stated that evidence of Ziemkiewicz's termination from another carrier, Old Dominion, with which he was ineligible for rehire, could have caused Black Horse not to hire him. Schneider Dep. 54-55 ("It's a red flag and myself I would move on to another candidate."). Nevertheless, Schneider's testimony as to what he would have done is not sufficient evidence to conclude as a matter of law that the drug and alcohol screen history report did not play a role in preventing the Plaintiff from being hired. The Defendants only argue, perhaps tellingly, that the other information available to Black Horse "likely" would have been disqualified. Defs.' Mem. 14, ECF No. 109-1. In sum, a jury must decide the question of whether any conduct by the Defendants caused any damages with respect to the Plaintiff's application to Black Horse. Accordingly, the Defendants' Motion is denied.
R + L Carriers, Inc. ("Carriers") moves separately for summary judgment on the grounds that it was not the Plaintiff's employer nor did it take any of the actions that form the basis for the Plaintiff's claims.
This Court and the District of New Jersey have both concluded that an agency relationship did not exist between entities with somewhat similar characteristics as Carriers and Shared Services. See, e.g., Iceland Telecom, Ltd. v. Info. Sys. & Networks Corp., 268 F.Supp.2d 585, 587-88 (D.Md.2008) (parent and subsidiary corporation shared headquarters and office space, letterhead and non-disclosure agreement stated parent-subsidiary relationship, parent was involved in day-to-day operations of subsidiary, subsidiary's president was paid by parent, plaintiff thought it was dealing with parent); Gianfredi v. Hilton Hotels Corp., Inc., No. 08-5413, 2010 WL 1381900, at *10, 2010 U.S. Dist. LEXIS 33227, at *30 (D.N.J. Apr. 5, 2010) (parent and subsidiary were headquartered in same building and shared office space, parent involved in day-to-day operations of subsidiary, subsidiary's letterhead and non-disclosure agreement indicated parent relationship, subsidiary's president was paid by the parent, plaintiff thought it was dealing with parent). Indeed, the Northern District of California recently concluded that Carriers and Shared Services themselves did not have an agency relationship for purposes of personal jurisdiction. Hill v. R+L Carriers, Inc., No. C 09-01907 CW, 2009 WL 4730903, at *3-4, 2009 U.S. Dist. LEXIS 120564, at *8-10 (N.D.Cal. Dec. 7, 2009). Specifically, the court held that Shared Services' undisputed contacts with California could not be imputed to Carriers for purposes of personal jurisdiction because there was no parent-subsidiary relationship, Carriers did not exert pervasive and continual control over Shared Services, and that the two entities' shared directors did not expose Carriers to liability. Id.; see also Declaration of Daniel J. Brake, ECF No. 128-2.
In this case, Shared Services uses the "R + L® Carriers" brand name, which is nationally recognized as a trucking company. Carriers and Shared Services have the same Chief Executive Officer, President, Vice President, Chief Financial Officer, and Vice President of Legal.
However, the decisions in Iceland Telecom, Gianfredi, and Hill are distinguishable from the instant case for the simple reason that none of those cases involved a claim of defamation based on the very document bearing the logo of the principal entity. Although there are several indicia of Carriers' level of control of Shared Services, the most salient fact is that Carriers granted express permission to use the trade name "R + L® Carriers" on the drug screen history report which is the gravamen of this case.
As noted, discovery with respect to liability and compensatory damages was bifurcated from punitive damages discovery. Mem. Order, ECF No. 86. Having determined that genuine issues of material fact remain as to liability and compensatory damages, it is now necessary to address the parties' disagreement as to the controlling law on punitive damages.
Because a potential award of punitive damages could vary significantly depending on which state's law controls, it is necessary under New Jersey law to determine which state has the "most significant relationship with the occurrence and the parties." Restatement (Second) of Conflict of Laws (1971); P.V. ex rel. T.V., 962 A.2d at 460. In tort cases, "The General Principle" is that:
Restatement (Second) of Conflict of Laws § 145(1) (1971). Section 145 further lists specific "contacts to be taken into account in applying the principles of § 6 to determine the law applicable to an issue." Id. § 145(2). The section of the Restatement
Restatement (Second) of Conflict of Laws § 149.
The parties disagree as to which test should be applied in this case, but as is apparent from the cross-references between Restatement Sections 145 and 149, the inquiry is essentially the same. Both Sections refer to the factors in Section 6, and therefore the "contacts" listed in Section 145(2). Id. § 145 cmt. a ("The rule of this Section states a principle applicable to all torts and to all issues in tort and, as a result, is cast in terms of great generality."). Thus, the question of the most significant relationship turns on the analysis of the following factors from Section 6:
Restatement § 6. As stated in Section 145(2), the relevant "contacts" that inform the Section 6 analysis are:
Restatement § 145(2).
Under any of the above tests, Maryland has the most significant relationship to the parties and facts in this case. The case was transferred from the District of New Jersey to this Court, over the Plaintiff's objections and the Defendants' urging that the case be transferred to Ohio instead. See Op. Transferring Case at 9, No. 12-1923 (D.N.J. Feb. 8, 2013), ECF No. 57 ("[T]he events giving rise to the claims here almost all germinated in Maryland where Stefaniak and Plaintiff worked together. The conduct of other R + L employees stemmed from information provided by Stefaniak."). As stated by the District Court for the District of New Jersey, this case centers around the Defendants' place of business in Hagerstown, Maryland, where the relationship between Ziemkiewicz and Shared Services was based. The meeting between Ziemkiewicz and Stefaniak in Hagerstown gave rise to this lawsuit. Although the Defendants discount Stefaniak's conduct because he did not make the refusal determination, his actions are just as significant to the issue of causation of the alleged injury as the
Finally, the Defendants argue that because the basic policy of punitive damages is to punish and deter misconduct, Ohio must be the state of dominant interest because the allegedly tortious conduct took place there. This argument fails for two reasons. First, an equally significant portion of the conduct that forms the basis of the claims in this case — Stefaniak's meeting with Ziemkiewicz and subsequent reports to headquarters — took place in Maryland. Second, just as with liability and compensatory damages, the interest in punishing and deterring misconduct may be equally strong in the states where the conduct was directed. Restatement (Second) of Conflict of Laws § 145 cmt. c. Ohio's relationship to this case is not strong enough to overcome Maryland's interest.
For the reasons stated above, the Plaintiff's Motion for Partial Summary Judgment (ECF No. 104) is DENIED, Defendant R + L Carriers, Inc.'s Motion for Summary Judgment (ECF No. 108) is DENIED, and Defendant R & L Carriers Shared Services, LLC's Motion for Summary Judgment (ECF No. 109) is DENIED. In addition, the issue of punitive damages will be governed by Maryland law.
A separate Order follows.
For the reasons stated in the foregoing Memorandum Opinion, it is hereby ordered this 6th day of February, 2014 that:
1. Plaintiffs Motion for Partial Summary Judgment (ECF No. 104) is DNIED;
2. Defendant R + L Carriers, Inc.'s Motion for Summary Judgment (ECF No. 108) is DENIED;
3. Defendant R & L Carriers Shared Services, LLC's Motion for Summary Judgment (ECF No. 109) is DENIED;
5. The Clerk of the Court transmit copies of this Order and accompanying Memorandum Opinion to counsel for the parties.
