Lamison v. Ferguson Enterprises, LLC

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF MISSOURI

WESTERN DIVISION

JAMES LAMISON, )

)

Plaintiff, )

)

v. ) Case No. 22-00546-CV-W-LMC

)

FERGUSON ENTERPRISES, LLC, et al., )

)

Defendants. )

ORDER

This matter is before the Court on Plaintiff’s Motion to Remand and Suggestions in Support

(Doc. #9), Defendant Klint Ludwig’s Motion to Dismiss Count III of Plaintiff’s Amended Petition

or Alternative Motion to Sever (Doc. #9-1 at 2-5), and Plaintiff’s Application for Clerk’s Entry of

Default and Motion for Default Judgment Against Klint Ludwig (Doc. #29).

I. BACKGROUND

From late 2014 to early 2021, Plaintiff was employed by Ferguson Enterprises, LLC, and

worked at a business named Ferguson Fire & Fabrication. (Doc. #1-4 at ¶¶3, 8.) Plaintiff alleges

that during the summer of 2020, “a Ferguson employee started putting magnets on the forklift at

work that included pentagrams, depictions of Satan, Black Lives Matter, Antifa, and ACAB, which

stands for All Cops are Bastards.” (Doc. #1-4 at ¶24.) Additionally, an employee wore a shirt that

said, “Hail Satan.” (Doc. #1-4 at ¶25.) Based on training sessions in the fall of 2020, Plaintiff

raised concerns “that the display of religious, racial, and politically offensive images was creating

a hostile work environment [based on race and religious discrimination] for several employees.”

(Doc. #1-4 at ¶¶ 27, 28.) Plaintiff was also concerned about a hostile work environment based on

race when an employee discussed “white privilege.” (Doc. #1-4 at 4 ¶29).) In January of 2021,

an employee who had previously displayed the allegedly offensive material reported to

management that Plaintiff had threatened him. (Doc. #1-4 at ¶31.) Plaintiff denied threatening

the other employee and informed management of the behavior that he alleges caused a hostile

environment. (Doc. #1-4 at ¶¶33, 34.) Plaintiff alleges that the offensive material remained on

display. (Doc. #1-4 at ¶36.) On February 8, 2021, Plaintiff removed allegedly offensive material

from Ferguson company property and destroyed them. (Doc. #1-4 at ¶37.) He also covered up

some allegedly offensive material. (Doc. #1-4 at ¶39.) Plaintiff was fired on February 10, 2021.

(Doc. #1-4 at ¶41.) Approximately a month-and-a-half after his firing, Plaintiff requested a letter

of dismissal pursuant to Mo. Rev. Stat. § 290.140, and was provided a letter that allegedly

contained false reasons for his termination. (Doc. #1-4 at ¶¶42, 43.)

Plaintiff’s initial Petition against Defendants Ferguson Enterprises, LLC and Ferguson Fire

& Fabrication, Inc. (the Ferguson Defendants) was filed in the Circuit Court of Jackson County,

Missouri on June 10, 2022. (Doc. #1-2 at 3.) On July 21, 2022, Defendant Klint Ludwig filed a

motion to dismiss Count III of the Petition. (Doc. #1-2 at 2.) On July 29, 2022, Plaintiff filed an

Amended Petition alleging that Ferguson retaliated against him in violation of Mo. Rev. Stat.

§ 213.070 (Count I), and that Ferguson violated the letter of dismissal statute (Count II). (Doc.

#1-2 at 1; Doc. #1-4.) Plaintiff also alleges that Defendant Klint Ludwig defamed him by making

false statements about him to managers, officers or supervisors employed by Ferguson Enterprises,

LLC (Count III). (Doc. #1-4 at 7-8.) Defendant Ludwig was not a manager, officer, or supervisor

at the time the statements were made. (Doc. #1-4 at ¶60.) Again, Defendant Ludwig filed a motion

to dismiss or in the alternative to sever. (Doc. 1-2 at 1.) The Circuit Court of Jackson County,

Missouri had not yet ruled on Defendant Ludwig’s motion when the matter was removed, based

on diversity jurisdiction, to this Court by the Ferguson Defendants on August 22, 2022. (Doc. # 1

at 3; Doc. # 1-2.)

II. STANDARD

Generally, a civil case brought in state court may be removed by a defendant to federal

court, “only if it could have been brought in federal court originally.” Peters v. Union Pac. R. Co.,

80 F.3d 257, 260 (8th Cir. 1996); 28 U.S.C. §1441(b). As a court of limited jurisdiction, it is

essential that jurisdiction be established as a threshold matter. Godfrey v. Pulitzer Pub’l Co., 161

F.3d 1137, 1141 (8th Cir. 1998). The party seeking removal has the burden of showing that this

Court has subject matter jurisdiction. Bell v. Hershey Co., 557 F.3d 953, 956 (8th Cir. 2009). All

doubts concerning federal jurisdiction must be resolved in favor of remand. Wilkinson v.

Shackelford, 478 F.3d 957, 963 (8th Cir. 2007).

When jurisdiction is predicated on diversity of citizenship, complete diversity must exist

between the plaintiff and defendants and the amount in controversy must exceed $75,000.00. 28

U.S.C. §1332(a). The removing party bears the burden of establishing these requirements.

Altimore v. Mount Mercy Coll., 420 F.3d 763, 768 (8th Cir. 2005). Furthermore, a matter cannot

be removed “if any of the parties in interest properly joined and served as defendants is a citizen

of the State in which such action is brought.” 28 U.S.C. §1441(b)(2).

III. DISCUSSION

As noted above, Defendant Ludwig filed a motion to dismiss while this matter was still in

the Circuit Court of Jackson County, Missouri, wherein Defendant Ludwig argues that the intra-

corporate immunity doctrine applies, thereby defeating a claim for defamation. (Doc. #9-1 at 2-

4.) Similarly, when the Ferguson Defendants removed the matter to this Court, they argued that

that Defendant Ludwig’s citizenship should be disregarded because he was fraudulently joined as

the intra-corporate immunity doctrine defeats the claim for defamation. (Doc. #1 at 5-9.) Plaintiff,

in his motion to remand, argues that Defendant Ludwig was not fraudulently joined.

Following oral argument on the motion to remand, Plaintiff filed Plaintiff’s Application

for Clerk’s Entry of Default and Motion for Default Judgment Against Klint Ludwig (Doc. #29),

arguing that Defendant Ludwig was in default because he failed to file an answer in this matter in

accordance with Rule 81 of the Federal Rules of Civil Procedure.

A. Motion to Remand

In removing this matter, the Ferguson Defendants argued that Defendant Ludwig’s

citizenship should be disregarded because he was fraudulently joined. (Doc. #1 at 5-9.) Plaintiff

moves for remand arguing that Defendant Ludwig was not fraudulently joined and that “even if

Count III is subject to dismissal, Plaintiff has a good faith argument for reversal, based on

conflicting opinions from the Missouri Court of Appeals and Supreme Court.” (Doc. #9 at 1.)

“[F]raudulent joinder [is] an exception to the complete diversity rule.” In re Prempro Prod.

Liab. Litig., 591 F.3d 613, 620 (8th Cir. 2010). A fraudulent joinder is the “filing of a frivolous

or otherwise illegitimate claim against a nondiverse defendant solely to prevent removal[.]” Filla

v. Norfolk Southern Ry. Co., 336 F.3d 806, 809 (8th Cir. 2003). A party has been fraudulently

joined when, under state law, it is clear that there exists no cause of action against the non-diverse

defendant under governing state law. Henson v. Union Pac. R.R. Co., 3 F.4th 1075, 1079 (8th Cir.

2021). Where, however, “there is a >colorable= cause of actionB that is, if the state law might

impose liability on the resident defendant under the facts allegedB then there is no fraudulent

joinder.” Filla, 336 F.3d at 810 (citation omitted). The removing party has the burden of showing

that the resident defendant’s joinder is fraudulent. Polito v. Molasky, 123 F.2d 258, 260 (8th Cir.

1941). Therefore, the case must be remanded unless the removing party can show that the non-

diverse defendant was fraudulently joined. Filla, 336 F.3d at 809.

The only allegation against Defendant Ludwig is a claim for defamation in Count III.

Defamation requires proof that there was a “1) publication, 2) of a defamatory statement, 3) that

identifies the plaintiff, 4) that is false, 5) that is published with the requisite degree of fault, and 6)

damages the plaintiff's reputation.” Smith v. Humane Soc’y of United States, 519 S.W.3d 789, 798

(Mo. 2017) (quoting Farrow v. Saint Francis Med. Ctr., 407 S.W.3d 579, 598-99 (Mo. banc

2013)).

Plaintiff argues that under Rice v. Hodapp, 919 S.W.2d 240 (Mo. 1996), Defendant

Ludwig’s “conversation with management involved two legal persons, and there is no absolute

privilege. If the qualified privilege applies, Plaintiff adequately alleges Ludwig is not immune

because Ludwig knew his statements were false when he said them.” (Doc. #9 at 7.) Meanwhile,

Defendants argue “that the intra-corporate immunity doctrine protects Defendant Ludwig’s reports

of Plaintiff’s threatening conduct to the Defendant Company’s supervisors[,]” and therefore

Defendant Ludwig was fraudulently joined. (Doc #13 at 7-11.) A careful reading of the parties’

arguments makes clear that the parties are not in agreement as to the legal theory that applies to

this matter. Therefore, this Court will take a closer look at the inter-corporate immunity doctrine

and the defense of qualified privilege.

In 1963, the Missouri Supreme Court adopted the intra-corporate immunity rule finding

that the “better and majority rule that communications between officers of the same corporation in

the due and regular course of the corporate business, or between different offices of the same

corporation, are not publications to third persons.” Hellesen v. Knaus Truck Lines, 370 S.W.2d

341, 344 (Mo. 1963). The intra-corporate immunity “rule rests on the premise that a corporation

can only communicate through its employees, the writings prepared in the ordinary course of

business and distributed within the corporate structure. Therefore, they are not “publications to

third persons” within the required proofs of the defamation tort.” Lovelace v. Long John Silver’s,

Inc., 841 S.W.2d 682, 684 (Mo. Ct. App. 1992).

The Hellesen decision actually deals with both legal theories (the inter-corporate immunity

doctrine and the defense of qualified privilege), as there were two separate sets of communication

at issue. The plaintiff in Hellesen was employed as an over-the-road trucker with defendant and

was a member of Local 41 of the International Brotherhood of Teamsters, Chauffeurs,

Warehousemen and Helpers of America (“the Union”). Hellesen, 370 S.W.2d at 342. Per the

terms and conditions of employment, a warning notice to an employee was to be provided to the

employee and to the Union. Id. Plaintiff alleged that defendant committed defamation by placing

a warning notice containing false statements in his file and forwarding the same to the Union. Id.

at 342-43. The court found that the warning notice placed in the defendant’s files was protected

by the intra-corporate immunity rule and was not a publication to a third person. Id. at 344.

Because there was no publication, the statement did not meet the definition of defamation. Id.

The second communication occurred when the defendant sent a warning notice to the

Union. Id. at 345. In that instance, the court implicitly found that the communication was

published to a third person, and therefore any applicable defense may apply. Id. There are three

defenses to defamation in the common law: (1) truth is an absolute defense; (2) some specific

statements are considered absolutely privileged; and (3) some statements “receive a conditional or

qualified privilege.” Henry v. Halliburton, 690 S.W.2d 775, 780 (Mo. 1985). The common law

allows for two types of qualified privileges: (1) the doctrine of fair comment, and (2) when the

statement was made under circumstances where the communication was

made in good faith, without actual malice, with reasonable or probable grounds for

believing them to be true, upon a subject matter in which the author of the

communication has an interest, or in reference to which he has a duty, public,

personal, or private, either legal, judicial, political, moral, or social, made to a

person having a corresponding interest or duty.

Id. at 781. The Hellesen court determined that the second communication was absolutely

privileged because the individual against whom the allegedly defamatory communication was

made, consented to the publication. Hellesen, 370 S.W.2d at 345. The court’s discussion of the

second statement, however, did not apply the intra-corporate immunity rule.

Similarly, in Rice, the case Plaintiff heavily relies upon, the court was also grappling with

two different types of statements: (1) statements between supervisors that were found to not be

publications under the intra-corporate immunity doctrine, and (2) statements made by supervisors

to non-supervisory employees, which were found to be a publication and subject to the defense of

qualified privilege. Rice, 919 S.W.2d at 243-44. With regard to the second set of statements, the

court held that statements by a supervisor to an employee were qualifiedly privileged because the

statements were “made in good faith upon any subject-matter in which the person making the

communication has an interest or in reference to which he has a duty, and to a person having a

corresponding interest or duty, although it contains matter which, without such privilege, would

be actionable.” Id. at 244. As noted in Rice, if the statements were made with malice, the qualified

privilege may be defeated. Id. at 244-45. As in Hellesen, the court in Rice was clearly drawing a

distinction between the intra-corporate immunity doctrine and the defense of qualified privilege.

Plaintiff’s arguments, however, conflate the doctrine of intra-corporate immunity and the

defense of qualified privilege. See Rice v. St. Louis Univ., 2020 WL 3000431, at *7 (E.D. Mo.

June 4, 2020) (finding that plaintiff “conflates two distinct doctrines that protect corporate

communications in the defamation context: ‘intra-corporate immunity,’ which dictates that

communications among officers and supervisory employees are not ‘publications’ for defamation

purposes, and a qualified privilege that protects some intra-corporate communications to non-

supervisors.”); Weisman v. Barnes Jewish Hosp., 2020 WL 2800469, at *19 (E.D. Mo. May 29,

2020) (noting the distinction between the qualified privilege and the intra-corporate

communications doctrine.) Qualified privilege is a defense to defamation, whereas the intra-

corporate immunity rule provides for a mechanism for corporations to be able to carry out business

by permitting officers and different offices of the same corporation the ability to communicate

with each other without a finding that such communication is a publication for purposes of

defamation. Without a finding of publication, there is no defamation.

Because Rice involved a supervisor making statements to non-supervisors its relevance is

limited in this case. However, the Missouri Court of Appeals, Eastern District’s decision in

Lovelace v. Van Tine, 545 S.W.3d 381 (Mo. Ct. App. 2018) is directly relevant. Van Tine involved

a physician working in a department who allegedly told a “floating” medical assistant’s

supervisors not to hire her because she did not “like working with white people.” Van Tine, 545

S.W.3d at 382. The court defined the circumstance as a non-supervisory employee informing

supervisors of personnel matters involving the employee. Id. at 384. Analyzing Rice, the court in

Van Tine noted that Rice “did not discuss statements made by non-supervisory employees to

supervisors.” Id. The court then went on to distinguish an employee to supervisor communication

and a supervisor to employee communication and found that “supervisors possessing personnel

information do not have the same unqualified necessity to disseminate it to non-supervisory

employees, who have no role in the hiring or discipline decisions that are often implicated when

these situations arise.” Id. at 384. An employee bringing “personnel matters to the attention of

supervisors[,]” however, is protected by the intra-corporate immunity rule because the corporation

needs to be able to receive such types of reports to carry on the business of the corporation. Id.

The Van Tine court found that the physician’s statement to the supervisors was protected by the

intra-corporate immunity doctrine. Id.

Plaintiff attempts to create a conflict between Rice and Van Tine (Doc. #9 at 8-9), but as

discussed above, Rice involves a very different set of facts than Van Tine. Furthermore, both

before and after the decision in Rice, Missouri courts have applied the intra-corporate immunity

rule to situations where an employee in the “due and regular course of corporate business” informs

supervisors of personnel matters involving the employee’s coworkers. Long John Silver’s, Inc.,

841 S.W.2d at 685 (finding that claims of sexual harassment made to management by employees

against a supervisor fell “within the intra-corporate immunity rule.”); Dean v. Wissmann, 996

S.W.2d 631, 635 (Mo. Ct. App. 1999) (applying the intra-corporate immunity rule to a professor

making statements to the Board of Regents regarding potential misdeeds of a student.) In fact, the

Missouri Supreme Court’s decision in Rice cited approvingly the decision by the Missouri Court

of Appeals, Western District in Long John Silver’s. Therefore, it does not appear that these

decisions conflict with Rice. Instead of being in conflict, Rice and Van Tine define the contours

of the intra-corporate immunity doctrine.

The Court notes that Plaintiff “concedes the intra-corporate doctrine applies” but goes on

to say, “it should provide a qualified immunity because Ludwig was a non-supervisor speaking to

a supervisor, and the law treats them as separate legal persons.” (Doc. #19 at 3.) As discussed

above, Plaintiff has conflated the two doctrines which leads him to argue that Van Tine was

wrongly decided. (Doc. #19 at 4, 6.) Van Tine follows a line of precedent applying the intra-

corporate immunity rule to statements by an employee to management regarding personnel

matters. Therefore, although Plaintiff characterizes Van Tine as shaky precedent, this Court finds

that Van Tine is squarely rooted in precedent. Furthermore, stare decisis dictates that the Circuit

Court would have to follow Van Tine, Long John Silver’s, Inc., and Dean. See State v. Banks, 457

S.W.3d 898, 903 (Mo. Ct. App. 2015) (finding that “[t]o the extent this case involves the same or

analogous issues as our prior opinion, stare decisis dictates that the trial court follow our prior

opinion.”)

Finally, Plaintiff argues that a state court may find that a cause of action exists and therefore

fraudulent joinder does not apply. (Doc. #9 at 8-10.) It is true that in the face of a motion to

dismiss, Missouri courts may permit a cause of action to proceed where such cause of action

“might be adopted in that case.” Nazeri v. Missouri Valley Coll., 860 S.W.2d 303, 306 (Mo. 1993).

Nevertheless, “[a]lthough the question of whether a plaintiff has fraudulently joined a defendant

requires a close analysis of state law, this question is ultimately one of federal law.” Knudson v.

Sys. Painters, Inc., 634 F.3d 968, 978 (8th Cir. 2011). Plaintiff has failed to point to any precedent

which would suggest that Van Tine, Long John Silver’s, and Dean, were wrongly decided or that

the Missouri Supreme Court would determine that the intra-corporate immunity rule does not

shield co-employee’s/non-supervisor’s statements to management regarding personnel matters.

This, coupled with Plaintiff’s misunderstanding of the distinction between the doctrines of intra-

corporate immunity and the defense of qualified privilege, leads this Court to find that Plaintiff’s

attempts to argue that courts may decide this matter differently to be futile. See Monroe v. Consol.

Freightways, Inc., 654 F. Supp. 661, 663 (E.D. Mo. 1987) (“Plaintiffs’ good faith belief that they

had a cause of action against defendant Bogle defeats neither his dismissal from the suit for

fraudulent joinder nor removal on the basis of diversity jurisdiction.”)

To be clear, this Court is deciding this case based on precedent, and not on policy concerns.

Both parties have argued the policy concerns (Doc. #28 at 10, 12-13), but as discussed above this

Court is tasked only with determining whether there is a colorable cause of action. Therefore,

policy concerns have no bearing on this decision.

In this instant matter Defendant Ludwig, a non-supervisory employee, made a report to

management regarding a personnel matter. As such, the statements are protected by the intra-

corporate immunity rule and are therefore not a publication to a third party. Because state law is

clear on this matter, Defendant Ludwig was fraudulently joined.

B. Motion for Default Judgment and Motion to Dismiss

Following oral argument in this matter, Plaintiff filed Plaintiff’s Application for Clerk’s

Entry of Default and Motion for Default Judgment Against Klint Ludwig (Doc. #29), wherein he

argues that Defendant Ludwig has failed to answer pursuant to Rule 81. Pursuant to Rule 81, “[a]

defendant who did not answer before removal must answer or present other defenses or objections

under these rules within the longest of these periods . . . .” Fed. R. Civ. P. 81. This section,

however, must be read in conjunction with Rule 12(b), which permits the filing of a motion to

dismiss prior to an answer. In fact, both federal rules and Missouri state rules permit the filing of

a motion to dismiss prior to filing an answer, and the filing of a motion to dismiss alters the timeline

for filing an answer. Fed. R. Civ. P. 12(a)(4); Mo. R. Civ. P. 55.25(c). Furthermore, “repleading

is unnecessary unless the court orders it.” Fed. R. Civ. P. 81(c)(2). Therefore, this Court finds

that Defendant Ludwig is not in default and Plaintiff’s motion will be denied.

Having found that Defendant Ludwig was fraudulently joined, this Court turns to

Defendant Klint Ludwig’s Motion to Dismiss Count III of Plaintiff’s Amended Petition or

Alternative Motion to Sever. The Court first notes that when Defendant Ferguson removed this

matter to this Court, the briefing on the motion was never filed. Instead, Defendant Ferguson filed

a copy of Defendant Klint Ludwig’s Reply in Support of His Motion to Dismiss Count III of

Plaintiff’s Amended Petition, which did not contain a court date-and-time stamp. (Doc. #1-3.) A

footnote in the removal notice states that the reply, which was filed shortly before notice of

removal was filed, was not reflected in the State court’s docket sheet and, therefore, the Ferguson

Defendants were attaching the reply to the notice of removal. (Doc. #1 at 3.) In their opposition

to remand, the Ferguson Defendants assert that “Defendant Ludwig’s motion to dismiss is now

pending before this Court.” (Doc. #13 at 2.). If the Ferguson Defendants truly believed that this

matter was ripe for review, Defendants should have filed the motion and briefing in this Court

when they removed this matter.

Nevertheless, the full briefing on the motion to dismiss, containing court date-and-time

stamps, was filed as an exhibit to Plaintiff’s motion to remand. (Doc. #9-1.) The issues and

arguments contained in the motion to dismiss are identical to the issues involved in the motion to

remand, that is whether there is a viable, or plausibly viable, cause of actions pursuant to Hellesen

and Rice. (Doc. #9-1.) These issues have been fully explored supra. It is clear that no cause of

action exists and therefore Count III, the count against Defendant Ludwig, must be dismissed. See

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955 (2007) (holding that to survive a

motion to dismiss a complaint must contain “enough facts to state a claim to relief that is plausible

on its face.”). Therefore, Count III of the Amended Petition will be dismissed.

IV. CONCLUSION

As set forth above, Defendant Ludwig was fraudulently joined and as such his citizenship

should be disregarded. The Court finds that the undersigned has jurisdiction pursuant to 28 U.S.C.

§ 1332(a). It is therefore

ORDERED that Plaintiff’s Motion to Remand and Suggestions in Support (Doc. #9) is

DENIED. It is further

ORDERED that Plaintiff’s Application for Clerk’s Entry of Default and Motion for Default

Judgment Against Klint Ludwig (Doc. #29) is DENIED. It is further

ORDERED that Defendant Klint Ludwig’s Motion to Dismiss Count III of Plaintiff’s

Amended Petition or Alternative Motion to Sever (9-1) is GRANTED and Count III is dismissed.

/s/ Lajuana M. Counts

LAJUANA M. COUNTS

UNITED STATES MAGISTRATE JUDGE