Opposition Brief — Oil, Chemical & Atomic Workers International Union v. Sinclair Oil Corp.

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No. 87-1936

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1987

OIL, CHEMICAL AND ATOMIC WORKERS INTERNATIONAL

UNION, JOHN E. FOLEY, and JOSEPH M. MISBRENER,

Petitioners

SINCLAIR OIL CORPORATION, a Wyoming and Delaware

corporation, EARL HOLDING, individually and as

Director and Officer of Sinclair Oil Corporation,

J.R. MciINTIRE individually and as Refinery Manager and

employee of Sinclair Oil Corporation, and

JOHN DOE(S), whether singular or plural,

that individual or those individuals who participated

in the republishing of the defamatory statement,

Respondents.

ON PETITION FOR A WRIT OF CERTIORARI TO

SUPREME COURT OF WYOMING

BRIEF OF RESPONDENTS IN OPPOSITION

TO PETITION FOR CERTIORARI

GLENN PARKER

HIRST & APPLEGATE

200 Boyd Building

P. O. Box 1083

Cheyenne, Wyoming 82003-1083

(307) 632-0541

and

DAN S. BUSHNELL

KIRTON, McCONKIE

& BUSHNELL, P.C.

330 South Third East

Salt Lake City, Utah 54111

Attorneys for

Respondents

QUESTIONS PRESENTED FOR REVIEW

1. In the context of a labor dispute was the Wyoming

Supreme Court wrong to apply Linn v. United Plant Guard Wor-

kers of America, 383 U.S. 53 and conclude that state libel

remedies were available only if a plaintiff could demonstrate

actual malice?

2. Whether the trial court and the Wyoming Supreme

Court erred in ruling upon the attorney/client privilege con-

cerning communications relating to republication of the Pala-

cios letter?

3. Whether the lower courts were correct in their anal-

yses of the Palacios letter as consisting of non-defamatory

factual assertions or of expressions of opinion which are

nonactionable in the labor dispute context?

TABLE OF CONTENTS

STATEMENT OF THE CASE .............-----:: 1

IN THE CONTEXT OF A LABOR DISPUTE WAS

THE WYOMING SUPREME COURT WRONG TO

APPLY LINN V. UNITED PLANT GUARD

WORKERS OF AMERICA, 383 U.S. 53 AND

IN CONCLUDING THAT STATE LIBEL

REMEDIES WERE AVAILABLE ONLY IF A

PLAINTIFF COULD DEMONSTRATE ACTUAL

rrr rr pero r rere ee 6

WHETHER THE TRIAL COURT AND THE

WYOMING SUPREME COURT ERRED IN RULING

UPON THE ATTORNEY/CLIENT PRIVILEGE

CONCERNING COMMUNICATION RELATING TO

REPUBLICATION OF THE PALACIOS LETTER ..... 12

WHETHER THE LOWER COURTS WERE CORRECT

IN THEIR ANALYSES OF THE PALACIOS

LETTER AS CONSISTING OF NONDEFAMATORY

FACTUAL ASSERTIONS OR OF EXPRESSIONS OF

OPINION WHICH ARE NONACTIONABLE IN

THE LABOR DISPUTE CONTEXT ................ 13

ete Ts | Swwrererrrr ere rrr fee 20

IPP AR Www ois OE eee APP. 1

TABLE OF AUTHORITIES

CASES Page

Adams v. Frontier Broadcasting Co.,

555 P.2d 556, 564 (Wyo. 1976) ........ 10, 11, 12

Anderson v. Liberty Lobby, Inc.,

477 U.S. 242, 106 S. Ct. 2505;

ee 8 rr 10, 11

Clark v. U.S.,

289 U.S. 1, 53 S. Ct. 465,

i ic by keke ase su tsckonees 13

Cordova v. Gosar,

719 P.2d 625, 633 (Wyo. 1986) ............... 13

Garrison v. Louisiana,

379 U.S. 64, 74; 85 S. Ct. 209,

pr G

Gertz v. Robert Welch, Inc.,

418 U.S. 323, 339-340, 94 S. Ct. 2997,

41 L.Ed.2d 760, G06 (1974) ............ 9, 14, 16

Greenbelt Cooperative Publishing

Association v. Bresler,

398 U.S. 6, 90 S. Ct. 1537,

Ee 17, 18

Gregory v. McDonnell Douglas Corporation,

17 Cal.3d 596, 131 Cal. Rptr. 641,

rr 14, 15, 16

Linn v. United Plant Guard Workers,

383 U.S. 53, 86 S. Ct. 657,

re 6, 7, 8, 9

MacGuire v. Harriscope Broadcasting Co.,

612 P.2d 830, 831-833 (Wyo. 1980) ........... 12

McMurray v. Howard Pubiications Inc.,

a 12

Miller v. Transamerican Press, Inc.,

621 F.2d 721 (Sth Cir. 1960) ................. i]

New York Times Co. v. Sullivan,

376 U.S. 254, 84 S. Ct. 710,

11 L.Ed.2d 686, 95 A.L.R.2d 1412 (1964) ..... 8,9

OCAW v. Sinclair Oil Corp.,

758 P.2d 283 (Wyo. 1987) .......... 7, 13, 15, 16

Okun v. Superior Court of Los Angeles County,

175 Cal. Rptr. 157, 629 P.2d 1369 (1981) ...... 16

Old Dominion Branch No. 496, National

Association of Letter Carriers, AFL-C/O v. Austin,

418 U.S. 264, 94 S. Ct. 2770,

41 60.20 746 (1974) ............. 8, 14, 16, 18

Philadelphia Newspapers, Inc. v. Hepps,

475 U.S. 767, 106 S. Ct. 1558,

I OE Eb oog ok kde eh waka ewes 9

Rinsley v. Brandt,

700 F.2d 1304 (10th Cir. 1963) ............... 19

St. Amant v. Thompson,

390 U.S. 727, 731, 88 S. Ct. 1323,

1325, 20 L.Ed.2d 262, 267 (1968) ......... 9, 10

UpJohn Co. v. United States,

449 U.S. 383, 390, 101 S. Ct. 677,

7s fF fe 13

Zimmerman v. Board of Publications of the

Christian Reformed Church,

598 F. Supp. 1002, 1012 (D. Colo. 1984) ....... 19

MISCELLANEOUS

National Labor Relations Act, 29 U.S.C.

tS tus Diag UA waren i éie 5 wah Ame 7

kg re ee Tee eee ee 5

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1987

No. 87-1936

OIL, CHEMICAL AND ATOMIC WORKERS

INTERNATIONAL UNION, JOHN E. FOLEY, and

JOSEPH M. MISBRENER, Petitioners,

SINCLAIR OIL CORPORATION, a Wyoming and Delaware

corporation, EARL HOLDING, individually and as

Director and Officer of Sinclair Oil Corporation,

J.R. MciINTIRE individually and as Refinery Manager and

employee of Sinclair Oil Corporation, and

JOHN DOE(S), whether singular or plural,

that individual or those individuals who participated

in the republishing of the defamatory statement,

Respondents.

ON PETITION FOR A WRIT OF CERTIORARI TO

SUPREME COURT OF WYOMING

BRIEF OF RESPONDENTS IN OPPOSITION

TO PETITION FOR CERTIORARI

STATEMENT OF THE CASE

Petitioner, Oil, Chemical and Atomic Workers Interna-

tional Union (OCAW), with offices in Denver, Colorado, is the

international union with which OCAW Local Union 2-269

(previously the bargaining agent for Employees at the Sin-

clair Oil Corporation refinery, Sinclair, Wyoming) is affiliated.

Petitioner John E. Foley was and still is the Director of Dis-

trict 1 (California area) of OCAW. Petitioner Joseph M. Mis-

brener of Denver, Colorado, is now the President of OCAW

and was the Vice-President of the Union in 1983 and 1984.

Respondent Sinclair Oil Corporation owns and operates the

refinery in Sinclair, Wyoming; Respondent Robert E. Holding

is a director and officer of Sinclair Oil Corporation (R. Voi.

ll, p. 251). Respondent J. R. Mcintire was the refinery

manager for the Sinclair Oil Corporation and the chief negoti-

ator for Sinclair collective bargaining negotiations with OCAW

(R. Vol. li, p. 269). He had been attempting to work out the

terms of an agreement to succeed the agreement between

Sinclair and OCAW which was to expire on January 7, 1983,

and negotiations between Sinclair and OCAW continued until

the expiration of the agreement on January 7, 1983 (R. Vol.

li, p. 269 and R. Vol. Vil, Exhibits Appendix, Exhibit 10).

The refinery and the Union were unable to agree, and

OCAW filed unfair labor practice charges with the National

Labor Relations Board (NLRB) against Sinclair, and Sinclair

filed unfair labor practice charges with the NLRB against

OCAW. Additional unfair labor practice charges and coun-

ter charges were also filed by OCAW and Sinclair. The NLRB

dismissed all but one of OCAW’s charges against Sinclair,

or they were withdrawn, but issued complaints on charges

filed by Sinclair against OCAW, which charges were later set-

tled by the Union. (R. Vol. Il, pp. 269-270; R. Vol. Vil, Exhibits

Appendix, Exhibit K.)

In January 1983, Dorothy A. Palacios, had been Inter-

national Representative for OCAW in California, District 1,

under the supervision of Petitioner John E. Foley, who gave

her a copy of an OCAW telegram dated January 28, 1983,

requesting an investigation of Robert Earl Holding and his

businesses. She conducted the investigation of Holding, and

made a written report to Petitioner Joseph M. Misbrener on

February 7, 1983 (R. Vol. Vil, Deposition Excerpts Appen-

dix, Vol. 2, Palacios Deposition, Vol. |, pp. 18-44; R. Vol. Vil,

Exhibit Appendix, Exhibits B, C and H, pp. 1-2 and 6-17).

In August of the same year, 1983, Palacios filed a

harassment grievance against her employer, OCAW, and on

20 September 1983 was terminated from her employment by

OCAW. She then filed grievances against OCAW, with her

own union, the International Representatives Committee

Union, and with the National Labor Relations Board, and with

the Equal Employment Opportunity Commission protesting

her discharge by OCAW (R. Vol. Vil, Deposition Excerpts

Appendix, Vol. 2, Palacios Deposition, Vol. |, pp. 48, 65-67,

90, 129-130, 228-232; Palacios Deposition Vol. Il, pp. 61-62:

and R. Vol. Vil, Exhibits Appendix, Exhibit 1).

Her controversy with OCAW was favorably settled by

her in October 1984 (R. Vol. Vil, Exhibits Appendix, Exhibits

F, Gand I, pp. 133-150). Pursuant to that Settlement Agree-

ment, OCAW agreed to pay a $40,000 lump sum, plus Disa-

bility Retirement at the rate of $925 per month, until April 30,

1989, during which period Palacios will continue to accrue

years of service towards her pension, and OCAW will con-

tribute $567.33 per month towards Palacios’ pension. The

OCAW will also furnish Palacios with health insurance and

life insurance and continue making contributions into those

funds on her behalf of $199.02 per month. OCAW also agreed

to pay Palacios $948.12 per month for her pension after May

1, 1989. The total economic effect of this settlement is over

$100,000. (R. Vol. Vil, Exhibits Appendix, Exhibit F.)

After filing her grievance charges, Paiacios, in late 1983

and early 1984 telephoned both Hoiding’s daughter and

Holding himself apologizing for conducting the investigation

into his background and seeking assistance in finding an

attorney to represent her in her own grievances against

OCAW (R. Vol. Vii, Deposition Excerpts Appendix, Vol. 2,

Palacios Deposition, Vol. |, pp. 48-53). On January 10, 1984

and on February 19, 1984, Palacios wrote letters to Holding

confirming the previous telephone calls (R. Vol. Vii, Deposi-

tion Excerpts Appendix, Vol. 2, Palacios Deposition, Vol. |,

pp. 53-63; R. Vol. Vil, Exhibits Appendix, Exhibit H, pp. 18-19,

and 21).

On February 14, 1984, some employees at the Sinclair

Refinery petitioned the NLRB, asking authority to conduct an

election for the Sinclair employees to decide whether they

wanted to decertify the OCAWIU and its Local 2-269 as the ex-

clusive bargaining agent representative of the Sinclair Refin-

ery employees (R. Vol. Vil, Exhibits Appendix, Exhibit K, p. 41).

Ms. Palacios, learning through her attorney Mr.

Gruender about the petition for decertification which had been

filed by the Sinclair employees, wrote a letter, addressed to

““OCAWIU—Represented Employees of Sinclair Oil,’’ and

sent a copy to Earl Holding through her attorney, Mr.

Gruender. (R. Vol. Vil, Deposition Excerpts, Vol. 2, Palacios

Deposition, Vol. li, pp. 64-66, 129-131, 134.) She also fur-

nished copies of the OCAW telegram of 20 January 1983 and

of her 7 February 1983 Holding Investigation Report (R. Vol.

Vil, Exhibits Appendix, Exhibits B and C) to attorney Gruender

(R. Vol. Vil, Deposition Excerpts Appendix Vol. 2, Palacios

Deposition Vol. |, pp. 136-137, 221-223).

Holding and Mcintire, upon receiving the same, re-

viewed the Palacios letter and a copy of the January 28, 1983,

OCAW telegram from Misbrener’s assistant to Foley who as-

signed the duties of investigating Holding to Palacios. They

also reviewed the February 7, 1983 investigation report pre-

pared by Palacios and sent by her to Misbrener, then OCAW

Vice-President. Holding had informed Mcintire of Holding’s

previous telephone and letter contacts from Palacios.

Convinced of the truth of the contents of the Palacios

letter because of his past difficult experiences with OCAW,'

and considering the information received in telephone calls

1. Their past sad experiences with OCAW, described in their depositions,

included the OCAW threats, negotiations trickery, intimidation tactics, the

inaccurate press releases, the wildcat strike which left the refinery control

room unattended, the threats to refuse to assist others in an emergency,

the attempt to plant adverse evidence in an OSHA investigation, the inci-

dents of violence such as fights, dead animals placed in employee lock-

and letters from Palacios, along with the OCAW telegram and

the Palacios report to OCAW, Mr. Holding consulted with the

refinery manager, J.R. Mcintire and decided to distribute the

Palacios letter to the Sinclair Refinery employees (Affidavits

of Holding and Mcintire, R. Vol. ll, pp. 251-268 and 269-290:

R. Vol. Vil, Deposition Excerpts Appendix, Vol. |, Holding

Depo., Vol. |, pp. 32-36, 53-55, 64-66, 94, 95, 102, 146, 147,

154-160, 166-169, 171, 172, 174, 175, 179-188, 192; Vol. li,

pp. 237, 248, 296, 300, 304, 305, 308, 309, 311, 325.)

Both Holding and Mcintire stated under oath that neither

believed nor had any reason to believe that the statements

contained in the Palacios letter were false and neither was

aware of any facts which caused him to believe that any part

was false (R. Vol. Il, pp. 251-252, 272).

It was, then, with all of this background that Holding

and Mcintire decided to distribute the Palacios letter to Sin-

clair’s retinery employees and to make a copy available to

the Rawlins Daily Times which had been running a series of

articles concerning the decertification election (R. Vol. II, pp.

299-303, 313-314, 316).

Respondent Holding and other Sinclair personnel asked

the Rawlins Daily Times to publish the letter, but the news-

paper declined. The next morning, Daniel Gruender and

others again met with representatives of the Daily Times. The

newspaper then contacted Dorothy Palacios and the union

representatives to discuss the letter’s contents, and eventu-

ally printed an article containing excerpts from the letter.

On April 25, 1984, the evening before the decertifica-

tion election, Respondents distributed the Palacios letter to

Sinclair employees, along with a cover letter authored by J.R.

Mcintire, refinery manager which explained its receipt by the

refinery authorities (R. Vol. Il, pp. 272, 290; R. Vol. Vil,

Exhibits Appendix, Exhibit E).

ers, and the four letter words scrawled on those lockers, the Courtney truck

attack, the scattering of nails on the oil loading rack driveways and the

shooting out of the windows of the loading rack house when employees

were inside the house.

At the decertification election, the Sinclair Refinery

employees voted 112 to 27 to decertify OCAWIU and its Lo-

cal 2-269 as bargaining agents (R. Vol. Vil, Exhibits Appen-

dix, Exhibit K, pp. 42). OCAW filed no objections to the tally

of ballots nor to the conduct of the election with the NLRB

within the time provided therefor (R. Vol. Vil, Exhibits Appen-

dix, Exhibit K, p. 43). However ten (10) months later the Peti-

tioners filed this suit on 22 February 1985 (R. Vol. |, p. 1.)

alleging by their Amended Complaint various causes of ac-

tion against Defendants/Respondents because of the repub-

lication of an allegedly defamatory letter authored by Dorothy

A. Palacios, a former International Representative of

OCAWIU.

After extensive discovery had been conducted Respon-

dents filed a motion to dismiss or, in the alternative, for sum-

mary judgment. Petitioners then filed a motion to compel

discovery, challenging Respondents’ assertions of the attor-

ney/client privilege. On 28 February 1986, the Trial Court

entered an order sustaining many of Respondents’ attor-

ney/client privilege objections. After further discovery was

conducted, the court granted Respondents’ motion for sum-

mary judgment. In a decision letter, the court indicated that

Respondents were entitled to summary judgment for two rea-

sons. First, the court concluded that Petitioners had failed

to demonstrate with convincing clarity that Respondents acted

with actual malice in publishing the alleged defamatory

material. Second, the court ruled that as a matter of law the

alleged defamatory materiai consisted of nonactionable opin-

ion. Either one of the alternative rulings, if correct, provided

a sufficient basis for the entry of summary judgment against

Petitioners. The Wyoming Supreme Court affirmed the trial

court's conclusion that Petitioners failed to provide clear and

convincing evidence to demonstrate actual malice.

1. IN THE CONTEXT OF A LABOR DISPUTE

WAS THE WYOMING SUPREME COURT

WRONG TO APPLY LINN V. UNITED PLANT

GUARD WORKERS OF AMERICA, 383 U.S.

53 AND IN CONCLUDING THAT STATE

LIBEL REMEDIES WERE AVAILABLE ONLY

IF A PLAINTIFF COULD DEMONSTRATE

ACTUAL MALICE?

Petitioners contend that the Wyoming Supreme Court

incorrectly applied the principles of Linn v. United Plant Guard

Workers, 383 U.S. 53, 86 S. Ct. 657, 15 L.Ed. 582 (1966) in

deciding this case. A straightforward reading of the Linn case,

however, leads to just the opposite conclusion. The Wyoming

Supreme Court carefully and correctly treated this point in

its opinion below, OCAW v. Sinclair Oil Corp., 758 P.2d 283

(Wyo. 1987) at pp. 287-289 (Appendix A, pp. App. 10-12).

The Amended Complaint alleged that the Palacios

letter was distributed as campaign material to Sinclair's

Employees during the decertification election campaign the

day before the employees were to vote for, or against con-

tinued representation of OCAWIU (R. Vol. |, p. 50 417).

Accordingly, the actual malice test approved in Linn, supra

is applicable.

In Linn, supra, the Court held that a state court suit

alleging a party to a labor dispute was libeled by false and

defamatory statements circulated during the course of a union

election campaign will be preempted by the National Labor

Relations Act, 29 U.S.C. §151 et seq., unless there is ‘‘actual

malice’’ and actual damages attributable to the libel. The

Court reaffirmed its definition of ‘‘actual malice’ as defama-

tory statements published “’. . .with knowledge of their falsity,

or with reckless disregard of whether they were true or

false... .’’ /Jd., 383 U.S. at 65, 15 L.Ed.2d at 591.

This Court also noted in Linn, supra, that:

‘Labor disputes are ordinarily heated af-

fairs; the language that is commonplace there

might well be deemed actionable per se in some

state jurisdictions. In deed, representation cam-

paigns are frequently characterized by bitter and

extreme charges, countercharges, unfounded

rumors, vituperations, personal accusations, mis-

representations and distortions. Both labor and

management often speak bluntly and recklessly,

embellishing their respective positions with

imprecatory language. Cafeteria Union v. Ange-

los, 320 US 293, 295, 88 L ed 58, 59, 64 S Ct 126

(1943). It is therefore necessary to determine

whether libel actions in such circumstances might

interfere with the national labor policy.”’

383 U.S. at 58, 15 L.Ed.2d at 587.

Thus, the Court extended the ‘‘actual malice”’ test and

protection afforded to the media in New York Times Co. v.

Sullivan, 376 U.S. 254, 84 S. Ct. 710, 11 L.Ed.2d 686, 95

A.L.R.2d 1412 (1964) to cases which arise between dispu-

tants in a union election campaign setting.

In Old Dominion Branch No. 496, National Association

of Letter Carriers, AFL-C/O v. Austin, 418 U.S. 264 at 272-273,

94 S. Ct. 2770, 41 L.Ed.2d 745 at 755 (1974), the Court reaf-

firmed the Linn standard, that:

‘‘{L]ibel actions under state law were pre-empted

by the federal labor laws to the extent that the

State sought actionable defamatory statements

in labor disputes which were published without

knowledge of their falsity or reckless disregard for

the truth.”

Linn, supra, and Old Dominion, supra, recognize that federal

‘law gives a union license to use intemperate, abusive or

insulting language without fear of restraint or penalty, if the

union believes such rhetoric to be an effective means to make

its point. This protection applies with equal force to statements

made by or circulated by management under the National

Labor Relations Act.

The reason for the more restrictive rules discouraging

state court libel and slander suits in labor disputes was a con-

cern expressed by the Court:

‘But it has been insisted that not only would the

threat of state libel suits dampen the ardor of labor

debate and truncate the free discussion envi-

owe nee

sioned by the [National Labor Relations] Act, but

that such suits might be used as weapons of eco-

nomic coercion. Moreover, in view of the propen-

sity of juries to award excessive damages for

defamation, the availability of libel actions may

pose a threat to the stability of labor unions and

smaller employers. In order that the recognition

of legitimate state interests does not interfere with

effective administration of national labor policy,

the possibility of such consequences must be

minimized. We therefore limit the availability of

state remedies for libel to those instances in which

the complainant can show that the defamatory

statements were circulated with malice and

caused him damnge.”’

Linn, supra, 383 U.S. at 64-65, 15 L.Ed.2d at 591.

This ruling of the Nation’s highest tribunal confirmed

earlier holdings of various lower courts, and established an

unassailable precedent for the principle that unions and un-

ion officials engaged in labor disputes are public figures, that

such cases involve matters of public interest or general con-

cern, and are subject to the standards enunciated in New York

Times Co. v. Sullivan, supra. See also Philadelphia News-

papers, Inc. v. Hepps, 475 U.S. 767, 106 S. Ct. 1558, 89

L.Ed.2d 783 (1986); Miller v. Transamerican Press, Inc., 621

F.2d 721 (Sth Cir. 1980).

The United States Supreme Court cases make clear

that, before there can be a holding of actual malice, there

must be a proof that a defendant had a ‘“‘high degree of aware-

ness of probable falsity.’’ Garrison v. Louisiana, 379 U.S. 64,

74; 85 S. Ct. 209, 13 L.Ed.2d 125, 133 (1964); and that the

defendant ‘‘in fact entertained serious doubts as to the truth

of the publication,’’ St. Amant v. Thompson, 390 U.S. 727,

731, 88 S. Ct. 1323, 1325, 20 L.Ed.2d 262, 267 (1968), such

that defendant has ‘“‘subjective awareness of probable fal-

sity."’ Gertz v. Robert Welch Inc., 418 U.S. 323 at 325, n. 6,

94 S. Ct. 2997, 41 L.Ed.2d 789 at 802, n. 6 (1974), where

en i

the U. S. Supreme Court noted that the Court, in St. Amant,

supra, had equated reckless disregard of the truth with such

subjective awareness of faisity.

The Wyoming Supreme Court, citing St. Amant v.

Thompson, supra, stated that ‘‘[rleckless disregard as allud-

ed to in New York Times v. Sullivan, supra, connotes that ‘there

must be sufficient evidence as to permit the conclusion that

the defendant in fact entertained serious doubt as to the truth

of his publication.’’ Adams v. Frontier Broadcasting Co., 555

P.2d 556, 564 (Wyo. 1976).

In the recent case of Anderson v. Liberty Lobby, Inc.,

477 U.S. 242, 106 S. Ct. 2505; 91 L.Ed.2d 202 (1986) the

United States Supreme Court had occasion to emphasize the

rule that actual malice must be shown with ‘“‘convincing clar-

ity’’ where at page 209 it was said:

‘In New York Times Co. v. Sullivan, 376 US

254, 279-280, 11 L Ed 2d 686, 84 S Ct 710, 95

ALR2d 1412 (1964), we held that, in a libel suit

brought by a public official, the First Amendment

requires the plaintiff to show that in publishing the

defamatory statement the defendant acted with

actual malice—‘with knowledge that it was false

or with reckless disregard of whether it was false

or not.’ We held further that such actual malice

must be shown with ‘convincing clarity.’ Id., at

285-286, 11 L Ed 2d 686, 84 S Ct 710, 95 ALR2d

1412. See also Gertz v. Robert Welch, Inc. 418

US 323, 342, 41 L Ed 2d 789, 94 S Ct 2997 (1974).

These New York Times requirements we have

since extended to libel suits brought by public

figures as well. See, e.g., Curtis Publishing Co.

v. Butts, 388 US 130, 18 L Ed 2d 1094, 87 S Ct

1975 (1967).”’

Not only did the Court hold that in a libel suit by a pub-

‘ic figure, the plaintiff must show that in publishing the defama-

tory statement, the defendant acted with actual malice, which |

must be shown with ‘‘convincing clarity,’’ but it reversed the

10 |

Court of Appeals (which had reversed the Summary Judg-

ment granted by the Trial Court) because that aspect had not

been considered at the summary judgment stage.

The concluding paragraph of the Anderson opinion

makes clear, that, where actual malice has not been shown

with “convincing clarity,’’ summary judgment should be grant-

ed for the defendant:

‘In sum, a court ruling on a motion for sum-

mary judgment must be guided by the New York

Times ‘clear and convincing’ evidentiary standard

in determining whether a genuine issue of actual

malice exists—that is, whether the evidence

presented is such that a reasonable jury might find

that actual malice had been shown with convinc-

ing clarity. Because the Court of Appeals did not

apply the correct standard in reviewing the Dis-

trict Court’s grant of summary judgment, we va-

cate its decision and remand the case for further

proceedings consistent with this opinion.’

Id., p. 217.

This holding confirms the propriety of the pronounce-

ment of the Wyoming Supreme Court in Adams v. Frontier

Broadcasting Company, supra, at 562 (Wyo. 1976):

‘A plaintiff in a case such as this, in which

the constitutional privilege must be overcome, is

charged with a special burden of persuasion

requiring him to demonstrate actual malice with

convincing clarity. Beckley Newspapers Corp. v.

Hanks, 389 U.S. 81, 88 S.Ct. 197, 19 L.Ed.2d 248

(1967); New York Times Co. v. Sullivan, supra at

376 U.S. 285, 286, 84 S.Ct. 710. As noted later,

in these cases summary judgments have fre-

quently been relied upon by the courts because

where appropriate such an expeditious disposi-

tion of the action affords the best protection to the

constitutional privilege. This approach has led to

a unique requirement, which we emphasize is

limited to cases which involve the constitutional

privilege defined by the New York Times case.

In ruling upon the presence of a genuine issue

of fact as to the existence of actual malice the tri-

al judge must decide whether:

‘* * * [T]he plaintiff has offered evi-

dence of a sufficient quantum to es-

tablish a prima facie case, and the

offered evidence can be equated with

the standard or test of ‘‘convincing

clarity’’ prescribed by United States

Supreme Court decisions * * *.

Chase v. Daily Record, Inc., 83

Wash.2d 37, 43, 515 P.2d 154, 157

(1973).

Accord, United Medical Laboratories v. Columbia

Broadcasting System, Inc., 404 F.2d 706 (9th Cir.

1968), cert. den. 394 U.S. 921, 89 S.Ct. 1197, 22

L.Ed.2d 454 (1969), Buchanan v. Associated

Press, 398 F.Supp. 1196 (D.D.C. 1975).”’ [Empha-

sis supplied.]

See MacGuire v. Harriscope Broadcasting Co., 612 P.2d

830, 831-833 (Wyo. 1980) and McMurray v. Howard Publica-

tions Inc., 612 P.2d 14, 17 (Wyo. 1980) to the same effect.

2. WHETHER THE TRIAL COURT AND THE

WYOMING SUPREME COURT ERRED IN

RULING UPON THE ATTORNEY/CLIENT

PRIVILEGE CONCERNING COMMUNICA-

TION RELATING TO REPUBLICATION OF

THE PALACIOS LETTER?

The Trial Court, after an extended hearing, resolved the

attorney/client questions both generally and specifically in its

‘Order on Plaintiff's Motion to Compel Discovery”’ (R. Vol.

ll, pp. 375-389; Petitioners’ Petition Appendix D). Respon-

dents submit that the Trial Court hearing of 11 February 1986

(R. Vol. V) and the Court’s Order of 28 February 1986 (R.

Vol. ll, pp. 375-389; Petition Appendix D) complied with the

* )

requirements announced in Cordova v. Gosar, 719 P.2d 625,

633 (Wyo. 1986), and were fair, proper, and well grounded

in the applicable law in arriving at the decision concerning

attorney/client privilege.

The Trial Court, at page 5 of the 3 July 1986 Decision

Letter (R. Vol. Il, p. 410; Petition Appendix C-5), further con-

sidered the application of the attorney/client privilege ques-

tion in this case. The Wyoming Supreme Court opinion below

dealt in depth with each of the Petitioners’ claims that the

attorney/client privilege was improperly applied by the Trial

Court. OCAW v. Sinclair Oil Corp., 748 P.2d 283, 289-291 (Ap-

pendix A, pp. App. 15-18).

Under the pronouncement in Clark v. U. S., 289 U.S.

1,53 S. Ct. 465, 77 L. Ed. 933 (1932) and the cases holding

similarly, Petitioners’ argument that Respondents waived the

attorney/client privilege, as to communications surrounding

or related to the republication of the Palacios letter, because

of their assertion of reliance on the advice of counsel in repub-

lishing the Palacios letter and due to their affirmative acts

of raising malice as an affirmative defense is without force.

The Trial Court’s rulings on attorney/client privilege

were proper and in compliance with the decisions of the

United States Supreme Court. In UpJohn Co. v. United States,

449 U.S. 383, 390, 101 S. Ct. 677, 66 L.Ed.2d 584, 592 (1981)

the Court pointed out that the attorney/client privilege exists

to protect not only the giving of professional advice to those

who can act on it, but also to encourage the giving of infor-

mation to the lawyer to enable him to give sound and informed

advice.

3. WHETHER THE LOWER COURTS WERE

CORRECT IN THEIR ANALYSES OF THE

PALACIOS LETTER AS CONSISTING OF

NONDEFAMATORY FACTUAL ASSER-

TIONS OR OF EXPRESSIONS OF OPINION

WHICH ARE NONACTIONABLE IN THE

LABOR DISPUTE CONTEXT?

The Trial Court presented a well written, well reasoned

opinion on this aspect of the case in its opinion letter of 3

July 1986 (Petitioners’ Appendix C-8 through C-14).

The Palacios’ letter describing her assignment ‘‘to dig

up all the dirt you can find on this guy” as ‘‘distasteful,

insulting, and offensive,’’ was an expression of opinion. As

such her description of her task is not actionable, under the

holding in Gertz v. Robert Welch, Inc., 418 U.S. 323, 339-340,

94 S. Ct. 2997, 41 L.Ed.2d 789, 805 (1974):

“Under the First Amendment, there is no such

thing as false idea. However pernicious an opin-

ion may seem, we depend for its correction not

on the conscience of judges and juries but on the

competition of other ideas... .”’

In Old Dominion Branch No. 496, National Association

of Letter Carriers, AFL-CIO v. Austin, 418 U.S. 264, 283-84,

S. Ct. 2770, 2781, 41 L.Ed.2d 745, 761 (1974) the Supreme

Court expressed a similar view in a /abor dispute, saying:

‘‘The sine qua non of recovery for defama-

tion in a labor dispute under Linn is the existence

of falsehood. Mr. Justice Clark put it quite bluntly:

‘the most repulsive speech enjoys immunity

provided it falls short of deliberate or reckless

untruth.’ 383 U.S., at 63, 15 L.Ed.2d at 82.

Before the test of reckless or knowing falsity can

be met, there must be a false statement of fact.”’

[Emphasis supplied.]

In Gregory v. McDonnell Douglas Corporation, 17 Cal.3d

596, 131 Cal. Rptr. 641, 552 P.2d 425 (1976), a labor dispute, |

the California Supreme Court held that the statement of

opinions did not lose First Amendment protection merely be- |

cause they attributed improper motives. The Court also not- |

ed that the question of whether an allegedly defamatory

opinion constitutes a fact or opinion is a question of law, ex- |

plaining:

‘‘The distinction frequently is a difficult one, and

what constitutes a statement of fact in one con- !

text may be treated as a statement of opinion in

another, in light of the nature and content of the

communication taken as a whole. Thus, where

potentially defamatory statements are published

in a public debate, a heated labor dispute, or in

another setting in which the audience may antic-

ipate efforts by the parties to persuade others to

their positions by use of epithets, fiery rhetoric or

hyperbole, language which generally might be

considered as statements of fact may well assume

the character of statements of opinion.’’

ld., 131 Cal. Rptr. at 644.

In the present case, Ms. Palacios truthfully identified

herself as a former employee of OCAW and said she had

pending charges against the organization. In that context, as

a matter of law, she was expressing an opinion, not facts,

when she continued:

‘‘Having experienced, personally, flagrant viola-

tion of my rights by OCAW as a Union member;

as a professional employee of OCAW; as a dues

payer to an OCAW Local (also, the Staff Union,

IRCU); and as a USA citizen, | was obliged to file

a discrimination/harassment grievance against

the OCAW Administration which so angered them

that | was terminated from my employment one

month later.”’

OCAW v. Sinclair Oil Corp., supra, p. 285 (Appendix A, p.

App. 6).

The same rule is applicable concerning her rhetorical

questions and further statements, including her statement

that:

‘| found this ‘assignment’ distasteful, insult-

ing, and offensive, since | considered myself a

qualified organizer and not a vulgar spy for those

who must ply their trade by trashy, unethical prac-

tices .. . nor did | aspire to be a ‘digger of dirt’.’’

/d., at 285 (Appendix A, p. App. 7).

Such remarks are constitutionally protected opinions,

under the unmistakable pronouncements of the United States

Supreme Court.

Palacios’ assertion that ‘‘OCAW must have been dis-

pleased"’ by her failure to find anything unsavory about

Holding may also be found to be an opinion. Indeed, the state-

ment itself is couched in terms of a statement of belief not

a statement of fact.

Several other protected statements of Palacios’ opin-

ion are found on the second page of the Palacios letter (R.

Vol. Vil, Exhibits Appendix, Exhibits A and H, p. 24; Petition

Appendix C-17-C-19). These include the following:

““{l] was part of an action intended, undeserved-

ly, to malign your employer and | want to take part

in clearing the record.

That ‘assignment’ proved to be a turning point in

my life and | was forced to reason . . . not ration-

alize . . . about this shabby, low affair of ‘digging

up dirt’ or ‘throwing mud’ to attempt to smear a

gentleman of excellent character .. . . but | felt

the need to apologize for OCAW. The leadership

has abdicated any sense of decency in their

desperation to keep their political boat afloat.

Honest union leaders do not need to ‘dig dirt’ nor

stoop to the foul play to which I’ve been exposed

in the last years of my employment by OCAW.

Remember foul ‘leadership’ leads where you can-

not afford to follow... .”

Id., at 286 (Appendix A, pp. App. 8-9).

Clearly, under the teachings of Gertz, Old Dominion, and

Gregory, supra, as well as Okun v. Superior Court of Los

Angeles County, 175 Cal. Rptr. 157, 629 P.2d 1369 (1981),

these statements of opinion are not actionable.

In viewing the Palacios letter in its entirety, the thrust

of the letter focuses around the factual assertion that Palacios

was assigned by Petitioners to find or dig up “‘dirt’’ on Respon-

dent Holding and his family, and it is this factual assertion

to which Petitioners take umbrage. Assuming, arguendo, that

Petitioners did not assign Palacios to ‘‘dig up dirt’’ on Holding,

there is still no merit to the complaint since no reasonable

man could find that any of the Petitioners were defamed by

the casting of such aspersions upon them. Indeed, it is to

be expected that unions will try to gather information, or ‘‘dig

dirt,’ about their adversaries, particularly during the course

of a hotly contested campaign or hard fought negotiations,

and the employees they represent expect nothing less. Em-

ployees will likely believe that this is part of a union's job,

and that one which does less is not doing its job of effectively

representing the employees.

The letter also describes in positive terms the favora-

ble information Palacios learned about Respondent Holding.

Obviously, this does not defame the Petitioners.

Finally, Palacios in her letter raised some of the same

rhetorical questions anyone else might likely raise concern-

ing an assignment to dig up dirt. She asked ‘‘Why do OCAW

so-called leaders need to ‘dig dirt’? Were they planning black-

mail, presuming to call it ‘negotiations’? Was this the intent

of such ‘investigation’?"’ Significantly, Palacios answered her

own questions by stating ‘| do not know.”’ /d., at 286.

Two U.S. Supreme Court cases establish the non-

libelous nature of the rhetorical statements in the Palacios

letter. In Greenbelt Cooperative Publishing Association v. Bres-

ler, 398 U.S. 6, 9 S.Ct. 1537, 26 L.Ed.2d 6 (1970), the Court

considered a newspaper story which referred to the position

the plaintiff had taken on matters before the city council as

“blackmail.” The trial court and the Maryland Court of

Appeals viewed the use of the word as charging the crime

of blackmail, and since the paper knew plaintiff had commit-

ted no such crime, it held the newspaper committed libel for

the ‘knowing use of falsehood.”’

As to this theory, the Supreme Court held that the

imposition of liability on such a basis was constitutionally

impermissible—that as a matter of constitutional law, the word

“blackmail” in these circumstances was not libel. The Court,

in so holding, stated in substance that no one could take the

word “‘blackmail”’ literally. The Court said:

“No reader could have thought that éither the

speakers at the meetings or the newspaper arti-

cles reporting their words were charging Bresler

with the commission of a criminal offense. (foot-

notes deleted). On the contrary, even the most

careless reader must have perceived that the

word was no more than rhetorical hyperbole, a

vigorous epithet used by those who consider Bres-

ler's negotiating position extremely unreasonable.

Indeed, the record is completely devoid of evi-

dence that anyone in the city of Greenbelt or any-

where else thought Bresler had been charged with

a crime.

To permit the infliction of financial liability upon

the petitioners for publishing these two news ar-

ticles would subvert the most fundamenta! mean-

ing of a free press, protected by the First and

Fourteenth Amendments . . . . (Emphasis Added).

398 U.S. at 14, 26 L.Ed.2d at 15.

In Old Dominion Branch, supra, the Court dealt with a

Union accusation that the plaintiffs were ‘‘scabs."’ This was

accompanied by a definition of “‘scab’’ by Jack London which

included the terms ‘“‘traitor,”’ ‘‘rotten principles,”’ and “‘lack- |

ing character.”’ Plaintiffs alleged these terms were libelous.

The Court disagreed. It held that such terms could not be

construed as representations of fact, particularly consider-

ing the labor context in which they arose. In its view, they

were used in ‘‘a loose figurative sense’’ to demonstrate the

Union's disagreement with those who opposed unionization.

Moreover, the Court found that a dictionary definition of

‘scab’ included one who refused to join the union. Conse-

quently no libel claim existed.

Clearly, no criminal acts were impugned to Petitioners

by the Palacios letter as alleged by them in their complaint.

All the statements were made in a heated labor dispute con-

;

text. Rather, Palacios did not more than ask rhetorical ques-

tions based on the facts at her disposal, and she candidly

acknowledged she did not know the answers. The Palacios

letter nowhere asserts that Petitioners committed either black-

mail or any other crime.

In Rinsley v. Brandt, 700 F.2d 1304 (10th Cir. 1983), a

psychiatrist brought a false light privacy action against an

author. The author in a publication had criticized the doctor's

method of treating patients and specifically mentioned the

treatmerit of one child who had later died. The author had

stated ‘‘what does it take to put a stop to such a man? How

many more children must die?’’ The court held that:

““[T}hese rhetorical questions . . . are severe

criticisms of Rinsley (psychiatrist) and his meth-

ods. But they are exactly that—exaggerated ex-

pressions of criticism. They are the type of

statements that our society, interested in free and

heated debate about matters of social concern

has chosen to protect.’’ (Emphasis added).

Id. at 1309.

The same can be said for the questions raised by the Pala-

cios letter.

As a matter of law, the Palacios letter is not defamatory.

The bulk of the statements pertaining to any of the Respon-

dents were opinions and rhetorical questions. As to the

remaining factual assertions regarding the Respondents, even

if they were false, they did not defame, since they cannot,

as a matter of law, be found to have exposed Petitioners to

“public hatred, contempt or ridicule.’’ The question of whether

a communication is capable of bearing a defamatory mean-

ing is a legal issue to be decided by the court. Likewise, in

a defamation action, the question of whether activities are

a ‘matter of public interest and general concern’”’ is one for

the court. Zimmerman v. Board of Publications of the Christian

Reformed Church, 598 F. Supp. 1002, 1012 (D. Colo. 1984).

Rhetorical questions which concern the Respondent's

methods and motivations, as well as opinions which criticize

habits, motives or morals of an individual or organization, are,

without more, non-actionable. Accordingly, there is no basis

to the complaint.

CONCLUSION

The summary judgment in favor of Respondents and

against Petitioners was properly issued for the reasons here-

inabove stated. The Wyoming Supreme Court upon thorough

consideration of these same claims by Petitioners affirmed

the Trial Court.

The attorney/client privilege was not waived by Respon-

dents. Further, the District Court’s ruling as to the permissi-

ble questions in the depositions, on its face, discioses that

the Court carefully considered each challenge, and the rul-

ings were valid.

The Palacios factual statements charged by Petition-

ers to be libelous were shown by Respondents to be true,

and such showing was not contradicted by Petitioners. Any

statements of opinion by Palacios are constitutionally protec-

ted and rhetorical questions are not actionable.

Petitioners failed to plead malice with particularity or

to show with convincing clarity that Respondents acted with

actual malice. Accordingly, there was no valid claim for libel

against Respondents and no basis for conspiracy to libel. As

the Trial Court’s decision letter explains, there was no genuine

issue of material fact and the Respondents were entitled to

judgment as a matter of law.

The summary judgment entered for Respondents and

later affirmed by the Wyoming Supreme Court should be

upheld because (1) the Palacios letter does not, as a matter

of law, make defamatory statements about any of the Peti-

tioners; (2) the Complaint, as amended, fails to allege facts

to support the conclusory allegations of knowledge of falsity

or reckless disregard of truth or falsity, (3) even if the Pala-

cios letter contained false and/or defamatory statements

about any of the Petitioners, the letter was not republished

by the Respondents ‘with actual malice,”’ i.e., with knowledge

of the falsity or reckless disregard for the truth or falsity of

the statements contained therein, and the entire matter is

therefore preempted under the National Labor Relations Act;

(4) the allegedly defamatory statements of fact contained in

the Palacios letter were true; (5) the Petitioners failed to prove

actual malice; and (6) in the absence of actionable libel, there

can be no basis for the allegation of conspiracy to commit

libel.

The Petition for a Writ of Certiorari should be denied.

Dated this

day of June 1988.

Respectfully submitted,

GLENN PARKER and

JAMES L. APPLEGATE

HIRST & APPLEGATE

P. O. Box 1083

Cheyenne, Wyoming 82003-0183

and for

DAN S. BUSHNELL

KIRTON, McCONKIE

& BUSHNELL, P.C.

330 South Third East

Sait Lake City, Utah 54111

Attorneys for Respondents

App. 1

APPENDIX A

OIL, CHEMICAL AND ATOMIC WORKERS INTERNATION-

AL UNION, John E. Foley, and Joseph M. Misbrener,

Appellants (Plaintiffs),

Vv.

SINCLAIR OIL CORPORATION, a Wyoming and Delaware

corporation, Earl Holding, individually and as Direc-

tor and Officer of Sinclair Oil Corporation, J.R. Mcin-

tire, individually and as Refinery Manager and

employee of Sinclair Oil Corporation, and John Doe(s),

whether singular or plural, that individual or those in-

dividuals who participated in the republishing of the

defamatory statement, Appellees (Defendants).

No. 86-239.

Supreme Court of Wyoming.

Dec. 22, 1987.

International union and its officers brought defamation

action against employer and its officers arising out of publi-

cation of allegedly defamatory letter written by former inter-

national union employee at time of decertification election.

The District Court, Carbon County, Robert A. Hill, J., entered

summary judgment in favor of employer and its officers. In-

ternational union and its officers appealed. The Supreme

Court, Cardine, J., held that: (1) actual malice standard ap-

plied to case; (2) international union and officers were required

to demonstrate actual malice with convincing clarity; (3) em-

ployer and officers did not waive attorney-client privilege; and

(4) knowledge of officers and employer of ill will of former in-

ternational union employee did not by itself prove knowledge

of probable falsity of alleged defamatory statement.

Affirmed.

Urbigkit, J., filed a dissenting opinion.

App. 2

1. Libel and Slander Key No. 4

Actual malice standard applied to defamation case

brought by international union and its officers against em-

ployer and its officers arising out of letter by former interna-

tional union employee prepared at time of decertification

election.

2. Libel and Slander Key No. 112(2)

In libel case involving labor dispute, plaintiff international

union and its officers were required to demonstrate actual

malice with convincing clarity.

3. Appeal and Error Key No. 1074(3)

Trial court’s refusal to strike supplemental memorandum

and appendix of appellees in defamation action arising out

of labor dispute did not rise to the level of prejudicial error;

outcome of appeal would not be affected if material in dis-

puted document was disregarded.

4. Evidence Key No. 206

Joint attorney-client exception to waiver of attorney-client

privilege applied to communications between former inter-

national union employee and attorney, who represented both

former union employee and an employer; former international

union employee and employer and officers enjoyed signifi-

cant identity of interest in their fight against international

union.

5. Witnesses Key No. 219(3)

Employer and officers, who were defendants in libel ac-

tion brought by international union and its officers, did not

waive attorney-client privilege, with respect to discussions

among employer's personnel and employer’s attorney con-

cerning decision to distribute allegedly defamatory letter, by

raising lack of malice as a defense; malice became an issue

as a result of affirmative acts of international union and its

officers in filing defamation complaint.

App. 3

6. Pretrial Procedure Key No. 34

Defendants in defamation action did not waive attorney-

client privilege by stating during discovery that their decision

to publish a letter was made with advice and assistance of

counsel.

7. Witnesses Key No. 201(2)

Attorney-client privilege could apply to allegedly defama-

tory communications, even if they involved contemplated tor-

tious acts.

8. Libel and Slander Key No. 51(1), 112(1)

Knowledge of employer and its officers that allegedly

defamatory letter was biased against international union did

not by itself prove their knowledge of probable falsity of al-

leged defamatory statement nor did it impose on them an ad-

ditional burden of extensive independent investigation.

Richard Rideout, of Freudenthal, Salzburg, Bonds &

Rideout, Cheyenne, and Donald J. Mares, of Law Office of

John W. McKendree, Denver, Colo., for appellants, argument

by McKendree. ;,

Glenn Parker and James Applegate, of Hirst & Applegate,

Cheyenne, and Dan S. Bushnell, of Kirton, McConkie & Bush-

nell, Salt Lake City, Utah, for appellees, argument by Messrs.

Applegate and Bushnell.

Before BROWN, C.J., and THOMAS, CARDINE, URBIG-

KIT, and MACY, Ju.

CARDINE, Justice.

The stakes were high. The union, OCAW, and Sinclair

Oil Corporation were locked in a contest for votes of Sinclair

employees in a union decertification election. As expected,

each party was commendably zealous in free and open de-

bate presenting their respective positions. A letter, critical of

the union and its officers, written by a former employee of

OCAW, was circulated among Sinclair employees. OCAW lost

App. 4

the election. An action for damages, claimed to result from

defamation by the letter, was brought against Earl Holding and

other officers and representatives of Sinclair. OCAW and its

officers lost the lawsuit by summary judgment. They now ap-

peal to this court, raising the following issues: (1) whether the

trial court erred in applying a subjective definition of actual

malice and an evidentiary standard of convincing clarity; (2)

whether the trial court erred in refusing to strike a supplemen-

tal memorandum and appendix filed by appellees in support of

their motion for summary judgment; (3) whether the trial court

erred in ruling that questions propounded to certain witnesses

sought information which was protected by the attorney-client

privilege; (4) whether the trial court erred in granting appel-

lees’ motion for summary judgment because of the existence

of credibility issues; (5) whether factual issues existed which

precluded summary judgment; (6) whether the trial court im-

properly relied upon incompetent testimony of appellants Mis-

brener and Foley; and (7) whether the trial court erred in

concluding as a matter of law that significant portions of the

alleged defamatory letter constituted protected opinion.

We affirm.

FACTS

The present controversy concerns events surrounding

a 1984 union decertification election held at the Sinclair Oil

Corporation refinery in Sinclair, Wyoming. Prior to the elec-

tion, Local 2-269 of the Oil, Chemical and Atomic Workers

Union (OCAW) was the exclusive bargaining agent for em-

ployees at the Sinclair Refinery. Appellant Oil, Chemical and

Atomic Workers International Union (OCAWIV) is the inter-

national union with which the local union was affiliated.

From 1972 to 1983, Dorothy Palacios was employed by

OCAWIU as an international representative. Early in 1983,

appellant John “‘Jack’’ Foley, her supervisor, asked her to

conduct research in the southern California area to obtain

information which might be heipful to the union in negotia-

tions with the Sinclair Refinery. Specifically, the union sought

App. 5

information concerning the Sinclair corporation, refinery own-

er Robert Earl Holding, and other businesses in which Hold-

ing had an interest.

In accordance with her instructions, Ms. Palacios traveled

to San Diego and conducted a search of public records. She

also visited the Westgate Hotel in San Diego, an enterprise

owned by appellee Holding or one of his entities. While at

the hotel, she happened to meet Mr. Holding and spoke with

him briefly. Ms. Palacios then prepared a report on her in-

vestigation and submitted it to appellant Joseph M. Misbrener,

who at that time was the vice president of the union.

In August of 1983, Ms. Palacios filed a harassment

grievance against OCAW. In September, she was terminat-

ed as an employee of OCAWIU. Following her termination,

she filed an unfair labor practice charge with the National

Labor Relations Board (NLRB) and a discrimination complaint

with the Equal Employment Opportunity Commission. Ms.

Palacios then contacted appellee Holding and apologized for

conducting the 1983 investigation. She also asked him for

assistance in finding counsel to represent her in her

grievances against the union. In a letter to Mr. Holding dat-

ed January 10, 1984, she made the following statements:

“It is difficult for me to ask for help, but | find it now

necessary as | have discovered that it is indeed not

simple to find the proper attorney to take such a

case. * * * It is, though, with the thought that you,

too, should benefit and that, perhaps, aspects of the

case will surface which may be of help to you in your

association with that organization and | would have

it understood with the attorney that any material that

arose would be available to you and not submerged

by the usual fiduciary attorney/client relationship.”

In response to this letter, Ms. Palacios received a call from

Daniel Gruender, an attorney whose firm represented Sin-

clair Oil and several of Holding’s entities. Ms. Palacios was

App. 6

aware that Mr. Gruender’s firm represented Sinclair. Mr.

Gruender eventually agreed to represent Ms. Palacios in her

grievance against OCAWIU. At the same time, he and his

firm were involved in the proceedings at the Sinclair Refinery. ;

ar ee i ai cts A

Ms. Palacios learned from Mr. Gruender that a decer-

tification election was to be held at the Sinclair Refinery in

April of 1984. The purpose of the election was to allow the

union members to determine whether OCAW should be de-

certified as the bargaining agent for the refinery employees.

Ms. Palacios then authored the following letter addressed to

the OCAW-represented employees of the Sinclair Refinery:

‘It has come to my attention that you are preparing

for an election on April 26, 1984. There are some

facts you should know.

‘For nearly 12 years, | had been an International

Representative for OCAW; | wish that | could praise

the union, but, sadly, | cannot. Having experienced,

personally, flagrant violation of my rights by OCAW

as a union member; as a professional employee of

OCAW; as a dues payer to an OCAW Local (also,

the Staff Union, IRCU); and as a USA citizen, | was

obligated to file a discrimination/harassment

grievance against the OCAW Administration which

So angered them that | was terminated from my em-

ployment one month later. For public record, both

EEOC and NLRB charges have been filed against

OCAW. This, of course, is my personal problem. The

subject of serious concern to you follows:

‘One of the assignments | was given as an Interna-

tional Representative for OCAW was to research

records and background of your employer, Robert

Earl Holding. This assignment came to me from Joe

Misbrener, now International President of OCAW,

through his Assistant, Dean Alexander, to District

1 Director Jack Foley. Foley told me (quote verba-

tim) . . . ‘Dig up all the dirt you can find on this guy.

App. 7

Joe needs to get something on him . . . they're hav-

ing some trouble with Sinclair.’

“| found this ‘assignment’ distasteful, insulting and

offensive since | considered myself a qualified or-

ganizer and not a vulgar spy for those who must ply

their trade by trashy, unethical practices . . . nor did

| aspire to be a ‘digger of dirt.’ However, | admit that

| rationalized that, after all, | was accepting my sal-

ary and was obliged to carry out the assignment as

instructed by my employer. | performed the investi-

gation with care and extreme diligence. Guess what?

“THE INVESTIGATION REVEALED ABSOLUTELY

NOTHING EITHER BAD OR EVEN REMOTELY UN-

SAVORY ABOUT MR. HOLDING! TO THE CON-

TRARY . . . | FOUND ONLY VERY GOOD

REPORTS ABOUT HIM!

‘““OCAW must have been displeased by this fact be-

cause | never had one word from any of them nor

even one comment regarding the 12-page report |

sent to Misbrener via certified mail. | received only

the returned receipt showing proof of delivery.

‘‘My investigation led to acquaintance with many of

Mr. Hoiding’s employees. When |, tactfully, led the

conversation to the subject of the union, | was told

by the employees that they were not sorry for hav-

ing decertified the union two years earlier. Admit-

tedly, | was surprised to hear this from the

employees. ‘‘They spoke of Mr. Holding and his fam-

ily with warm enthusiasm and genuine sincerity.

They assured me that Mr. Holding was a man of in-

tegrity whose word was as iron-clad, as binding, as

any union contract!

“Neither could | find, though | searched, any em-

ployee who suffered any loss as a result of eliminat-

ing the union. That these employees so respected,

App. 8

even revered, their employer aroused my curiosity.

They had made it very clear to me that they were

not about to reorganize with the union . . . to turn

their backs on an employer who treated them well

... even after two years of having been without a

union.

‘Released from my employment by OCAW, | am

now free of any obligation to remain silent about that

investigation. | could not have addressed you as |

am now doing while | was still on the union's pay- )

roll. Neither, ordinarily, would | voluntarily write to .

a group of employees about union assignments. In .

this case, however, | was part of an action intend-

ed, undeservedly, to malign your employer and |

want to take part in clearing the record.

“That ‘assignment’ proved to be a turning point in

my life and | was forced to reason . . . not rational-

ize... about this shabby, low affair of ‘digging dirt’

or ‘throwing mud’ to attempt to smear a gentleman

of excellent character . . . as verified by his own work-

ers. Was this why | had joined the union? Certainly

not! Mr. Holding doesn’t know me nor does he need

my testimonial to any virtue he possesses; but | felt

the need to apologize for OCAW. The leadership has

abdicated any sense of decency in their despera-

tion to keep their political boat afloat.

‘Honest union leaders do not need to ‘dig dirt’ nor

Stoop to the foul play to which I've been exposed

in the last years of my employment by OCAW. Why

do OCAW so-called leaders need to ‘dig dirt’? Were

they planning to blackmail, presuming to call it

‘negotiations’? Was this the intent of such ‘investi-

gation’? | do not know. | know only this fact: while,

| repeat, there was not one mark against the Hoid-

ings, THE GOOD WAS HIGHLY VISIBLE!

App. 9

“if |were a Sinclair employee, I'd encourage produc-

tivity for the benefit of everyone, and I'd give Mr.

Holding an opportunity to work unhampered by any

‘dirt-seekers.’

“Remember, foul ‘leadership’ leads where you can-

not afford to follow and taints all those connected

to it. | used to believe that you could remain above

it, stay clear of the ‘mud.’ Not so. Some of it always

sticks to your fingers and is hard to clean off.

‘Good luck in your election!

*“"Is/

“Dorothy A. Palacios

“Former Int'l. Rep. —OCAWIU” (Emphasis in orig-

inal.)

Ms. Palacios testified that while no one had requested her

to prepare the letter, she mailed it to Mr. Gruender and told

him he could use it if it would be helpful. She also provided

to Mr. Gruender a copy of the report of her investigation of

Mr. Holding and a copy of the telegram from OCAWIU re-

questing that she perform the assignment.

Danie! Gruender delivered the letter to the management

of the Sinclair Refinery. Several meetings were then heid to

determine whether to distribute the letter to Sinclair em-

ployees. Daniel Gruender took part in these discussions. Ap-

peliee Holding and other Sinclair personnel asked the Rawlins

Daily Times to publish the letter, but the newspaper declined.

The next morning, Daniel Gruender and others again met with

representatives of the Daily Times. The newspaper then con-

tacted Dorothy Palacios and the union representatives to dis-

cuss the letter’s contents, and eventually printed an article

containing excerpts from the letter. On the evening before

the decertification election, appellees distributed the Pala-

cios letter to Sinclair employees, along with a cover letter

authored by appellee J.R. Mcintire. OCAW lost the election

the next day.

App. 10

On February 22, 1985, appellants filed a complaint

against appellees, alleging libel and civil conspiracy. After

considerable discovery had been conducted, appellees filed

@ motion to dismiss or, in the alternative, for summary judg-

ment. Appellants then filed a motion to compel discovery,

challenging appellees’ assertions of the attorney-client

privilege. On February 28, 1986, the trial court entered an

order sustaining many of appellees’ attorney-client privilege

objections. After further discovery was conducted, the court

granted appellees’ motion for summary judgment. In a deci-

sion letter, the court indicated that appellees were entitled

to summary judgment for two reasons. First, the court con-

cluded that appellants had failed to demonstrate with con-

vincing clarity that appellees acted with actual malice in

publishing the alleged defamatory material. Second, the court

ruled that as a matter of law the alleged defamatory material

consisted of nonactionable opinion. Either one of the alter-

native rulings, if correct, provided a sufficient basis for the

entry of summary judgment against appellants. We affirm the

trial court's conclusion that appellants failed to provide clear

and convincing evidence to demonstrate actual! malice.

1. ACTUAL MALICE

[1] In the crucible of a labor conflict, clashes between

the right of free discussion and one’s right to be free from

defamation are virtually inevitable. This problem was ad-

dressed by the United States Supreme Court in Linn v. Unit-

ed Plant Guard Workers of America, Local 114, 383 U.S. 53,

86 S.Ct. 657, 15 L.Ed.2d 582 (1966). In Linn, the Court was

faced with the question of whether, and to what extent, the

National Labor Relations Act preempted the availability of

State remedies for libel. In striking a balance between the

“congressional intent to encourage free debate on issues

dividing labor and management” and the ‘‘ ‘overriding state

interest’ in protecting its residents from malicious libels,”’ the

Court concluded that in the labor dispute context, state libel

remedies were available only if a plaintiff could demonstrate

ee ee eee

App. 11

actual malice. Id., 86 S.Ct. at 664. The Court thus adopted

“t]he standards enunciated in New York Times Co. v. Sul-

livan,"’ 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964).

in New York Times Company v. Sullivan, the Court defined

‘actual malice” as libel issued ‘‘with knowledge that it was

false or with reckless disregard of whether it was false or not.”

id. 84 S.Ct. at 726. In a subsequent case, the Court stated that

in order to show reckless disregard, a plaintiff must provide

‘sufficient evidence to permit the conclusion that the defen-

dant in fact entertained serious doubts as to the truth of his

publication.” St. Amant v. Thompson, 390 U.S. 727, 88 S.Ct.

1323, 1325, 20 L.Ed.2d 262 (1968); see also Adams v. Frontier

Broadcasting Company, Wyo., 555 P.2d 556 (1976); MacGuire

v. Harriscope Broadcasting Co., Wyo., 612 P.2d 830 (1980).

As explained in McMurry v. Howard Publications, Inc.,

Wyo., 612 P.2d 14, 18 (1980), the New York Times actual

malice standard is a subjective one which focuses on the

defendant's state of mind:

‘* ‘knowledge of falsity’ involves a subjective aware-

ness of the falsity of the statements, and ‘reckless

disregard’ involves sufficient evidence to permit an

inference that the defendant must have, in fact, sub-

jectively entertained serious doubts as to the truth

of the statements.” (Emphasis in original.) Rooney,

J., specially concurring.

Appellants argue that while this subjective definition of act-

ual malice is appropriate in cases involving media defendants,

it is inappropriate in cases involving labor disputes. We find

no merit in this contention. The actual malice standard is ap-

plied in media-defendant cases to protect the principle that

‘‘debate on public issues should be uninhibited, robust, and

wide-open * * *."’ New York Times v. Sullivan, supra, 84 S.Ct.

at 721. This principle applies with equal force in the labor dis-

pute context. In Linn v. United Plant Guard Workers of Amer-

ica, Local 114, supra, 86 S.Ct. at 663, the Supreme Court said:

App. 12

‘We acknowledge that the enactment of § 8(c) [of

the NLRA] manifests a congressional intent to en-

courage free debate on issues dividing labor and

management. And, as we stated in another context,

cases involving speech are to be considered ‘against

the background of a profound * * * commitment to

the principle that debate * * * should be uninhibit-

ed, robust, and wide-open, and that it may well in-

clude vehement, caustic, and sometimes unpleas-

antly sharp attacks.’ New York Times Co. v. Sullivan,

376 U.S. 254, 270, 84 S.Ct. 710, 721, 11 L.Ed.2d

686 (1964). Such considerations likewise weigh

heavily here; the most repulsive speech enjoys im-

munity provided it falls short of a deliberate or reck-

less untruth.”’ (Footnote omitted.)

Moreover, the case law of other jurisdictions provides abun-

dant support for the proposition that the New York Times sub-

jective actual malice standard, as refined by St. Amant v.

Thompson, supra, applies in the labor dispute context. See

Tosti v. Ayik, 394 Mass. 482, 476 N.E.2d 928, 935 (1985);

Raffensberger v. Moran, 336 Pa. Super. 97, 485 A.2d 447,

453 (1984); Meuser v. Rocky Mountain Hospital, Colo. App..,

685 P.2d 776, 779 (1984); Yeager v. Local Union 20, Team-

sters, Chauffeurs, Warehousemen & Helpers of America, 6

Ohio St.3d 369, 453 N.E.2d 666, 669 (1983); Montana v.

Smith, 92 A.D.2d 732, 461 N.Y.S.2d 603, 604 (1983). We hold

that the trial court correctly applied the actual malice standard.

Il. CONVINCING CLARITY

In determining whether appellants provided sufficient evi-

dence to defeat appellees’ motion for summary judgment,

the trial court applied the evidentiary standard of convincing

clarity. Appellants claim that the trial court erred in applying

this standard. We disagree.

[2] The requirement that a plaintiff must demonstrate ac-

tual malice with convincing clarity was articulated in New York

eee

App. 13

Times Company v. Sullivan, supra. In Linn v. United Plant

Guard Workers of America, Local 114, supra, the Court stat-

ed that the ‘‘standards”’ enunciated in New York Times Com-

pany apply in libel cases involving labor disputes. Linn, supra,

86 S.Ct. at 664. Thus, the clear and convincing standard is

appropriate in this case. See Meuser v. Rocky Mountain Hospi-

tal, supra.

In Adams v. Frontier Broadcasting Co., supra, 555 P.2d

at 562, we said that

‘‘fiJn ruling upon the presence of a genuine issue

of fact as to the existence of actual malice the trial

judge must decide whether:

‘ ‘(T]he plaintiff has offered evidence of a sufficient

quantum to establish a prima facie case, and the

offered evidence can be equated with the standard

or test of ‘‘convincing clarity’ prescribed by United

States Supreme Court decisions * * *.’ Chase v.

Daily Record, Inc., 83 Wash.2d 37, 43, 515 P.2d 154,

157 (1973).

‘Accord, United Medical Laboratories v. Columbia

Broadcasting System, Inc., 404 F.2d 706 (9th

Cir.1968), cert. den. 394 U.S. 921, 89 S.Ct. 1197,

22 L.Ed.2d 454 (1969); Buchanan v. Associated

Press, 398 F.Supp. 1196 (D.D.C.1975).”’

See also MacGuire v. Harriscope Broadcasting Co., supra,

612 P.2d at 832. The United States Supreme Court approved

this approach to summary judgment in cases falling under

the New York Times Company rule in Anderson v. Liberty Lob-

by, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

in Anderson, the Court explained that the requirement of clear

and convincing evidence of actual malice was appropriate

at the summary judgment stage because ‘‘the inquiry involved

in a ruling on a motion for summary judgment or for a direct-

ed verdict necessarily implicates the substantive evidentiary

App. 14

Standard of proof that would apply at the trial on the merits.”’

106 S.Ct. at 2512.

The trial court did not err in requiring appellants to pro-

vide clear and convincing evidence of malice in order to defeat

appellees’ summary judgment motion.

lll. REFUSAL TO STRIKE

[3] Appellants next contend that the trial court erred in

refusing to strike appellees’ supplemental memorandum in

support of their motion for summary judgment because it con-

tained misleading, scandalous and impertinent material. They

also contend that the court erred in not striking as untimely

filed an appendix filed in support of the supplemental

memorandum. We will not address these contentions at

length because even if we assume that the trial court erred

in denying appellants’ motion to strike and we disregard the

materials in the disputed documents, the outcome of this ap-

peal would not be affected.

Appellees’ initial memorandum and supporting docu-

ments, filed months before the summary judgment hearing,

provided sufficient evidence to establish the absence of a

genuine issue of material fact on the dispositive question of

whether appellees acted with actual malice. Those materials

demonstrated that appellees believed the contents of the Pa-

lacios letter because of telephone conversations in which Ms.

Palacios apologized for conducting the investigation, her letter

asking for assistance in finding an attorney, and the telegram

describing the assignment. Our discussion here is confined

to that portion of the letter in which Ms. Palacios quotes ap-

pellant Foley as stating ‘‘[dJig up all the dirt you can find on

this guy. Joe needs to get something on him. . . they're hav-

ing some trouble with Sinclair.'’ Ms. Palacios’ statement that

Foley said these words is clearly a statement of fact. The en-

tire remainder of the letter either consists of factual asser-

tions which are not defamatory or statements which are

treated as nonactionable opinion in the labor dispute context.

ee ee ee ee ee er ry

App. 15

““tW]here potentially defamatory statements are pub-

lished in a public debate, a heated labor dispute,

or in another setting in which the audience may an-

ticipate efforts by the parties to persuade others to

their positions by use of epithets, fiery rhetoric or

hyperbole, language which generally might be con-

sidered as statements of fact may well assume the

character of statements of opinion.’’ Gregory v.

McDonnell Douglas Corporation, 17 Cal.3d 596, 131

Cal.Rptr. 641, 644, 552 P.2d 425, 428 (1976).

Appellees met their burden under Rule 56, W.R.C.P. even

without the materials in the supplemental memorandum and

appendix. Cf. Hickey v. Burnett, Wyo., 707 P.2d 741 (1985).

Simply stated, the trial court’s refusal to strike appellees’

supplemental memorandum and appendix did not rise to the

level of prejudicial error.

IV. ATTORNEY-CLIENT PRIVILEGE

During the course of discovery, appellees continually as-

serted the attorney-client privilege in response to virtually all

questions regarding communications made in the presence

of attorney Daniel Gruender. These communications can be

divided into two categories: (1) communications between

Dorothy Palacios and Daniel Gruender; and (2) discussions

among Daniel Gruender and Sinclair personnel, including ap-

pellees Holding and Mcintire, concerning the decision to dis-

tribute the Palacios letter.

[4] With respect to the first category, appellants argue

that Dorothy Palacios expressly waived the attorney-client

privilege by the language contained in her letter to appellee

Holding dated January 10, 1984. The attorney-client privilege

is limited to

‘those communications which the client either ex-

pressly made confidential or which he could reason-

ably assume under the circumstances would be

App. 16

understood by the attorney as so intended. * * * Wherever

the matters communicated to the attorney are intended by

the client to be made public or revealed to third persons, ob-

viously the element of confidentiality is wanting.’’ E. Cleary,

McCormick on Evidence, § 91 at 217 (3d Ed. 1984).

An exception to this rule arises when the same attorney

represents two clients who share information on a matter of

common interest:

‘‘When two or more persons, each having an interest

in some problem, or situation, jointly consult an at-

torney, their confidential communications with the

attorney, though known to each other, will of course

be privileged in a controversy of either or both of the

clients with the outside world, that is, with parties

claiming adversely to both or either of those within

the original charmed circle.’’ McCormick, supra, at

219.

The classic example of this joint client exception occurs

when two clients ‘‘walk into the lawyer’s office together and

retain him to represent both of them in the same matter.’’

C. Wright and K. Graham, Federal Practice and Procedure:

Evidence § 5505 at 556. Although this did not happen in the

present case, Dorothy Palacios and appellees shared the

same attorney, and a significant identity of interest existed

between them. As stated by appellants in their brief, appellee

Holding and Dorothy Palacios engaged in a ‘‘joint effort to

fight the OCAWIU.”’ We hold that the joint client exception

applies under these circumstances. The district court did not

err in ruling that the communications between Dorothy Pala-

cios and Daniel Gruender were protected by the attorney-

client privilege, nor did the ruling result in injustice or in the

judgment entered being a sham.

[5] With respect to the second category of questions,

those which relate to meetings held in the presence of Daniel

Gruender in the days before the decertification election, ap-

ibtedhiric maar aRet haa ili

App. 17

pellants assert that the appellees waived the attorney-client

privilege by raising malice as an affirmative defense and by

asserting that the decision to publish the letter was made with

advice of counsel.

Appellants have cited no authority to support the propo-

sition that a libel defendant waives the attorney-client privilege

by raising lack of malice as a defense. They argue, however,

that ‘‘malice has been made an issue by the affirmative acts

of the Appellees, as well as potentially by operation of law,”’

and that in the interest of fairness all attorney-client commu-

nications which are relevant to the malice issue should be

discoverable.

We find no merit in appellants’ contention that malice

became an issue as a result of appellees’ ‘‘affirmative acts.”

When, as in this case, malice is an element of a libel action,

the burden of pleading and proving that element rests on the

plaintiff. R. Smolla, Law of Defamation, § 3.06 (1986). Con-

sequently, malice became an issue in this case when appel-

lants filed their complaint.

[6] We are also unpersuaded by appellants’ argument

that appellees waived the attorney-client privilege by stating

during discovery that their decision to publish the Palacios

letter was made with the advice and assistance of counsel.

We recognize that reliance upon a defense of advice of coun-

sel has, in some circumstances, been held to constitute a

waiver of the attorney-client privilege. See, e.g., United States

v. Mierzwicki, 500 F.Supp. 1331 (D.Md.1980). In this case,

however, appellees did not rely on advice of counsel as a de-

fense. They merely stated, in response to questions posed by

appellants’ counsel, that Daniel Gruender participated in the

decision to publish the Palacios letter and helped prepare

a cover letter for it. We reject appellants’ assertions that these

discovery responses amounted to a waiver of the privilege.

[7] Appellants next contend that the attorney-client

privilege does not apply to many of the communications at

App. 18

issue because they involved contemplated tortious acts. In

Hopkinson v. State, Wyo., 664 P.2d 43, 66-67 (1983), we held

that the privilege is inapplicable to communications made to

further a crime or fraud. Although some jurisdictions have

enlarged the crime or fraud exception to include contemplated

torts, the wisdom of this expansion of the exception has been

questioned.

‘Broadening the exception in such ways might lead,

at least initially, to greater disclosure (more evidence

with which to get at the truth), but in the long run

surely the effect would be to discourage clients from

attempting to conform their conduct to legal require-

ments and to discourage lawyers from seeking in-

formation from clients in oraw: to advise them

effectively * * *.’’ 2D. Louisell and C. Mueller, Fed-

eral evidence § 213 at 823-824.

We find this reasoning persuasive, and we decline to adopt

an exception to the attorney-client privilege for contemplat-

ed tortious acts.

Finaily, appellants assert that the trial court upheld the

privilege in several situations in which appellants’ discovery

questions did not seek information concerning legal advice

of an attorney while acting as an attorney. This assertion is

unsupported by the record. All the questions in which the as-

sertion of the attorney-client privilege was upheld required

answers concerning communications made in the presence

of Daniel Gruender while providing advice to his clients.

V. ISSUES OF MATERIAL FACT

Appellants contend that the trial court erred in granting

summary judgment because significant issues of fact exist-

ed concerning the credibility of appellees Holding and Mcin-

tire. In support of this argument, appellants point to two

purported inconsistencies. First, in their affidavits, appeilees

Holding and Mcintire stated that their belief in the truth of

dan olarabe BPRS a naa Bs

PT net aera oa 0

App. 19

the contents of the Palacios letter was based upon informa-

tion contained in a telegram from appellant Foley and a copy

of Dorothy Palacios’ report on her investigation, while in their

answers to appellants’ interrogatories they added additional

factors they relied upon. Second, appellees Holding and Mcin-

tire stated in their affidavits that the decision to publish the

letter was made by themselves while their answers to inter-

rogatories indicate that they consulted with Daniel Gruender

before making the decision.

This court has noted that summary judgment may not

be proper when an action involves issues concerning state

of mind and credibility. Bryant v. Hornbuckle, Wyo., 728 P.2d

1132 (1986). We have also stated that “‘[i]f the evidence

presented * * * does not raise sufficient doubt of an affiant’s

credibility, a party’s desire to test his statements by a jury

will not preclude summary judgment.” Id. at 1137.

The United States Supreme Court addressed this issue

as it relates to libel cases in Anderson v. Liberty Lobby, Inc.,

supra, in which the Court made the following observations:

‘Respondents argue * * * that whatever may be true

of the applicability of the ‘clear and convincing’ stan-

dard at the summary judgment or directed verdict

stage, the defendant should seldom if ever be grant-

ed summary judgment where his state of mind is at

issue and the jury might disbelieve him or his wit-

nesses as to this issue. They rely on Poller v. Colum-

bia Broadcasting System, Inc., 368 U.S. 464, 82

S.Ct. 486, 7 L.Ed.2d 458 (1962), for this proposition.

We do not understand Poller, however, to hold that

a plaintiff may defeat a defendant’s properly sup-

ported motion for summary judgment in a conspiracy

or libel case, for example, without offering any con-

crete evidence from which a reasonable juror could

return a verdict in his favor and by merely asserting

that the jury might, and legally could, disbelieve

the defendant’s denial of * * * legal malice. The

App. 20

movant has the burden of showing that there is no

genuine issue of fact, but the plaintiff is not thereby

relieved of his own burden of producing in turn evi-

dence that would support a jury verdict.’’ Id., 106

S.Ct. at 2514.

We conclude that purported inconsistencies in appellees’ tes-

timony did not create a genuine issue of material fact.

[8] Appellants assert that apart from the purported credi-

bility issues, other issues of fact exist on the question of ac-

tual malice. While they contend that the evidence demon-

strates several factors to support a finding of actual malice,

in our view the only evidence which might arguably support

such a finding is appellees’ knowledge that Dorothy Palacios,

the author of the letter, was biased against the union. Ap-

pellees’ knowledge of her ill will toward appellants, however,

does not by itself prove knowledge of probable falsity of the

alleged defamatory statement, Hotchner v. Castillo-Puche, 551

F.2d 910, 913-914 (2nd Cir.1977); see also Loeb v. New Times

Communications Corp., 497 F.Supp. 85, 92-93 (S.D.N.Y.

1980), nor does it impose on appellees ‘‘an additional bur-

den of extensive independent investigation.’’ Loeb v. New

Times Communications Corp., supra, n. 12. The district court

did not err in concluding that no genuine issue of material

fact existed on the question of whether appellees acted with

actual malice.

VI. INADMISSIBLE TESTIMONY

Finally, appellants assert that the trial court erroneous-

ly relied upon inadmissible testimony in entering summary

judgment for appellees. Specifically, appellants assert that

the following deposition testimony was inadmissible on the

grounds of foundation and competency:

“Q: ‘Now is there any specific act of malice or reck-

lessness or wanton conduct that you think were [sic]

App. 21

committed by Sinclair or by Mr. Holding or Mr. Mcin-

tire other than circulation of the two letters?

[Objection omitted. ]

‘A: ‘Il know of no other action that attaches to me

personally, no...’ ”’

Relying on this testimony, the trial judge stated in his opin-

ion letter that he found it ‘‘dispositive’’ that ‘both plaintiffs

Foley and Misbrener acknowledged that neither knew of any

act or statement on the part of Sinclair, Holding, or Mcintire

which would indicate malice or recklessness on the part of

defendants, other than circulation of the Palacios letter.’ Ap-

pellants correctly point out that there is nothing in the record

to indicate that Foley and Misbrener knew the meaning of

the legal terms contained in the question quoted above. Ac-

cordingly, we do not find it dispositive that appellants admit-

ted in their depositions that they were unaware of any

evidence to support a finding of actual malice. The disposi-

tive issue is whether any evidence in the record before us

supports such a finding, applying the evidentiary standard

of convincing clarity. The record is devoid of such evidence;

and, as a result, we affirm the district court.

Affirmed.

URBIGKIT, Justice, dissenting.

The court here determines that granting defendant Sin-

clair’s motion for summary judgment was proper because the

Union, as plaintiff, did not show actual malice as a subjec-

tive criterium when focused on the state of mind of the defen-

dant’s decisionmakers in questioning whether affidavit and

deposition evidence was sufficient to establish a triable is-

sue of fact. However, the reason why the Union could not

show malice is the crux of this case: the attorney-client

privilege, and whether it was properly applied in denial of

plaintiff's discovery. In rejection of that pre-motion hearing

discovery, the majority finds no waiver of the privilege, and

App. 22

relies on three theories: (1) the joint-client exception; (2) the

raising of malice as an affirmative defense; and (3) the ad-

vice of counsel.

| dissent, and would find the malice evidence as hidden

information to be discoverable because the data is neces-

sary for review by the court in decision on defendant's

summary-judgment motion. The proof necessary for the Un-

ion to respand to the motion was extrapolated to be undis-

coverabe under a collusive shield of attorney-client privilege,

since the two parties, by agreement, happened to ‘‘coinciden-

tally’’ employ the same attorney. Conversely to that immuni-

zation, | would apply a rule of necessity to determine privilege

and discoverability.'

Admissibility at trial is not of proper present focus, since

the litigation proceeded only to the summary-judgment level

and is consequently to be reviewed against the backdrop of

such criteria. Factually, Sinclair moved for a motion to dis-

miss or in the alternative for summary judgment, with sup-

porting affidavits. At that point, the burden shifted, and it

became incumbent on the Union as the respondent to show

there were material issues of fact. In Cordova v. Gosar, Wyo..,

719 P.2d 625, 636 (1986), this court cited Matsushita Elec-

tric Industrial Co., Ltd. v. Zenith Radio Corporation, 475 U.S.

574, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986), and ex-

pressed the view that:

“** * * [w]hen the moving party has carried its bur-

den under Rule 56(c), its opponent must do more

than simply show that there is some metaphysical

1. To change the scenario and contemplate that the disillusioned author

of a critical election-date attack in a labor conflict vote had been employ-

er’s agent, or even an investigator retained by the employer's law firm,

and who, after jumping ship, was led in employment-contract dispute to

be represented by the Union's lawyers—would even-handed justice still

envelop a malice issue by insulation of privilege in favor of the Union, or

would the happenings between the employee and his new-found lawyers

be discoverable in the suit between the employer and the Union, whether

founded in libel, slander or perhaps intentional interference with a contract?

ee ee ee

App. 23

doubt as to the material facts. [Citations.] In the lan-

guage of the Rule, the non-moving party must come

forward with “specific facts showing that there is a

genuine issue for trial.’’ Fed.Rule Civ.Proc. 56(e) (em-

phasis added.)’ ”’

The information of what occurred must be evaluated in

the light of the facts surrounding the parties when this court

examines the entire record, Wyoming insurance Department

v. Sierra Life Insurance Co., Wyo., 599 P.2d 1360 (1979), and

considers this record from the viewpoint favorable to the party

opposing the motion, the respondent. Greenwood v. Wierds-

ma, Wyo.. 741 P.2d 1079 (1987); DeHerrera v. Memorial Hospi-

tal of Carbiin County, Wyo., 590 P.2d 1342 (1979).

The crucial question in this case becomes: how can the

Union develop specific facts showing that there is a genuine

issue for trial and thus defend against the summary-judgment

motion filed by the defendants in the defamation action? The

very nature of this suit commands that malice in publication

is intrinsically involved. Consequently, to respond to the mo-

tion, the Union tried to discover the character of the conduct

that the defendants engaged in—the character of the con-

duct which was inherently involved in the preparation of the

joint representation and activity with their common attorney

who, by the defendants’ own admission, participated in the

decision to publish the letter. This discovery was subsequently

denied on the basis of attorney-client or, nore appropriate-

ly, ‘‘attorney-clients”’ privilege, which justifies the summary

judgment after the Union was foreclosed from discovering

the facts necessary to refute the summary-judgment motion.

The theoretical validity of a limited privilege as enunciated

by this court in Greenwood v. Wierdsma, supra, is justified

even more by the factual parameters of this case.

By holding as they do, when the state of mind of the par-

ties is at issue, the majority put their stamp of approval on

the approach here taken that the subjective intent of the par-

ties can be hidden by employing a common attorney and

App. 24

using the attorney-client privilege. A defendant can subse-

quently move for summary judgment and thwart the nonmov-

ing party from discovering the facts necessary to fight such

a motion. The underlying facts are permitted to be concealed,

with the spoils going to the party who secreted them. Such

a practice | cannot condone. The persuasive philosophy on

the comparable Shield Law privilege-discovery dispute as

elucidating fundamental constitutional concerns in Hatchard

v. Westinghouse Broadcasting Co., Pa., 532 A.2d 346 (1987),

affords precedential support for discovery in this case.

The majority correctly point out that malice is an element

of the libel and thus the burden of pleading and proving that

element rests on the plaintiff, and became an issue when the

Union filed their complaint. However, the defendants. by af-

firmative acts, did place lack of malice in issue. The defen-

dants in their answers to the amended complaint list 16

separate defenses, five of which directly refer to lack of malice

on their part:

“21. As a further and separate defense, Defendants

allege that they, at no time bore any malice or ill will

toward Plaintiffs or any of them, but acted in full be-

lief of the truth and verity of the statements in the

Palacios letter.

* * * * * *

“25. As a further and separate defense, Defendants

allege that the matters complained of are privileged

under the guarantees of the First and Fourteenth

Amendments to the Constitution of the United States

and Article 1, Section 20 of the Constitution of the

State of Wyoming because Plaintiffs are public

figures and the subject publication was not made

with any malice, or intent to harm the Plaintiffs.

“26. As a further and separate defense, Defendants

allege the matters complained of are privileged in

that the subject publication involves matters of public

“2 aw

App. 25

interest and was not made with any malice, or in-

tent to harm the Plaintiff.

“27. As a further and separate defense, Defendants

allege that the matters complained of are privileged

in that any publication made by these Defendants

to other persons was upon a subject in which both

have an interest and was not made with any malice,

or intent to harm the Plaintiffs.

“28. As a further and separate defense, Defendants

allege that the statements complained of were pub-

lished in the course of a labor dispute and as such

are privileged and immune for a libel claim since they

were not published with actual malice, nor with

knowledge of their falsity nor with reckless disregard

of whether they were true or false nor were the Plain-

tiffs injured thereby.”’

Recently, some courts have taken a more justice-interest

view of the placing-at-issue waiver of the attorney-client

privilege, by applying what has been labeled as the Hearn

analysis. Hearn v. Rhay, 68 F.R.D. 574 (E.D.Wash. 1975); Unit-

ed States v. Exxon Corporation, 94 F.R.D. 246 (D.D.C. 1981).

See also Developments in the Law, Privileged Communica-

tions, 98 Harv.L. Rev. 1450, 1641 (1985). In Hearn v. Rhay,

supra, the court applied a tri-part test to determine if the

attorney-client privilege can be waived with respect to pleaded

matters when defendants claimed they acted in good faith

and without malice. The Hearn test includes three criteria for

utilizing the placing-at-issue waiver: the privilege-holder must

(1) assert the privilege through some affirmative act which

puts the protected information at issue; (2) through this act

the asserting party puts the information at issue and renders

it relevant to the action; and (3) by applying the privilege the

opposing party would be denied access to privileged matter

that is vital to the opposing party’s defense. Hearn v. Rhay,

supra, 68 F.R.D. at 581. Additionally, the court in United States

v. Exxon Corporation, supra, used the Hearn test to hold that

App. 26

the oil company had waived its attorney-client privilege in an

action to recoup overcharges in the sale of oil when Exxon

raised the defense of good-faith reliance on the Department

of Energy’s representations. In Exxon, as in the instant case,

the purpose of the discovery was to determine facts which

required delving into the subjective intent of the parties, and,

as well, the attorney-client privilege was used as a shield to

this discovery.

‘“* * * Thus, the only way to assess the validity of

Exxon’s affirmative defenses, voluntarily injected

into this dispute, is to investigate attorney-client com-

munications where Exxon’s interpretation of various

DOE policies and directives was established and

where Exxon expressed its intentions regarding

compliance with those policies and directives. There

is no other reasonable way for plaintiff to explore Ex-

xon’s corporate state of mind, a consideration now

central to this suit.’’ Exxon v. United States, supra,

94 F.R.D. at 249.

The situation in the case at bar is especially suited to

the Hearn analysis because at the heart of the Hearn court's

decision was the manifest unfairness of permitting a party

to both assert information through some affirmative act for

his own benefit, and to deny his opponent access to the very

evidence that might refute or allow defense of this informa-

tion. Hearn v. Rhay, supra, 68 F.R.D. at 581. Similarly, the

case at bar presents a scenario where such manifest injustice

did occur from such a practice.

An application of this Hearn analysis does not necessarily

open up a Pandora’s box of everything becoming un-

privileged.

“The anticipatory waiver theory concerns itself solely

with the decision, whether by plaintiff or defendant,

to commit to a course of action that would require

the disclosure of privileged material. A defendant

a ia

App. 27

who answers a compiaint with a general denial has

not committed himself to such a course, because

he bears no initial burden of going forward with evi-

dence. Pleading an affirmative defense, however,

if the defense can be established only with privileged

evidence, will waive the defendant's privilege. The

critical choice being exercised by the pleader is not

whether to sue or defend, but whether to do so with

privileged evidence. The decision to use privileged

evidence should create a waiver of the evidence so

disclosed and of any other evidence with regard to

the same subject matter.’’ 98 Harv.L.Rev. at 1643.

Sinclair asserted through five separate defenses that it had

no malice when it published the letter. Consequently, by as-

serting this view in its answer to the amended complaint rather

than a general denial. under the Hearn analysis the attorney-

client privilege was waived, and the material became dis-

coverable.

Additionally, there is great injustice in permitting the

defendants to collusively hide the information and in effect

deprive a court of the information it needs to avoid improperly

terminating the case by summary judgment. A litigant should

be permitted to diligently pursue discovery for the court to

have the necessary information to effectuate a valid summary-

judgment disposition.

The rule of necessity should be utilized to develop and

reveal the information through discovery needed for the ini-

tial review by a court in a summary judgment proceeding.

“The adversary system of trial is hardly an end in

itself; it is not yet a poker game in which players en-

joy an absolute right always to conceal their cards

until played.’’ Williams v. Florida, 399 U.S. 78, 82,

90 S.Ct. 1893, 26 L.Ed.2d 446 (1970).

Without this necessary information, the court is effectively

presented with only one hand to examine, and the use of the

App. 28

privilege under this joint representation arrangement results

in summary-judgment disposition becoming hardly more than

a sham.

Unsettled by review of the comprehensive briefing and

detailed record, and without defined opinion about what trial

results might be, it is my conclusion that at least as now

presented, this activated and anguished litigation should not

have been concluded by summary judgment. Consequent-

ly, | dissent.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.