Petition for Writ of Certiorari — Intercity Maintenance Co. v. Local 254
Supreme Court brief2001
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Supreme Court of the United States
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INTERCITY MAINTENANCE CO.,
Petitioner,
LOCAL 254, SERVICE EMPLOYEES INTERNATIONAL
UNION; SERVICE EMPLOYEES INTERNATIONAL
UNION, AFL-CIO; VICTOR LIMA;
DONALD COLEMAN,
Respondents.
¢
On Petition For Writ Of Certiorari
To The United States Court Of Appeals
For The First Circuit
a
PETITION FOR WRIT OF CERTIORARI
¢
VINCENT F. Racosta, Jr.
Counsel of Record
MatTHEW T. OLIVERIO
CHRISTINE M. CurLey
Shakespeare Hall - Penthouse
128 Dorrance Street
Providence, Rhode Island 02903
(401) 274-2100; FAX (401) 861-2260
Counsel for the Petitioner
COCKLE LAW BRIEF PRINTING CO., (800) 225-6964
OR CALL COLLECT (402) 342-2831
\}
Il.
Il.
QUESTIONS PRESENTED
Whether Intercity’s State Law Defamation Claims
Are Preempted Pursuant to Linn v. United Plant
Guard Workers of America, 383 U.S. 53, 86 S. Ct. 657
(1966) Where the Lower Courts Found That the
Union Acted With Actual Malice?
Where the Lower Courts Found That the Union Pub-
lished Defamatory Statements About Intercity With
Actual Malice, Does Linn v. United Plant Guard
Workers of America, 383 U.S. 53, 86 S. Ct. 657 (1966)
Require Proof of Special Pecuniary Losses In Addi-
tion to Damages Recoverable Under State Tort Law?
Upon Proof of a Union’s Malicious Libels, Does Gen-
eral Injury to Intercity’s Reputation, Entitling It to
Presumed Damages Under State Tort Law, Satisfy
the Compensable Harm Requirement of Linn v.
United Plant Guard Workers of America, 383 U.S. 53, 86
S. Ct. 657 (1966), Permitting an Award of Punitive
Damages?
ii
TABLE OF CONTENTS
Page
QUESTIONS PRESENTED .............. ‘“eacbun ca i
FABLE OP AUT os eis ok eee ee iv
COP Ee oak: cas does nea een ean 1
PAF ROG oi 6 6ckn cadue cncneen chaedewA meatae 1
STATUTES INVOLVED IN THIS CASE............. 2
STATEOAENT OOF THEE CAGE iis cin nc kcecnskivcnkes 2
REASONS FOR GRANTING THE WRIT ........ Bch
I. The First .Circuit’s Ruling That Intercity’s State
Law Defamation Claims Were Preempted Pur-
suant To Linn v. United Plant Guard Workers Of
America, 383 U.S. 53, 86 S. Ct. 657 (1966), Despite
Its Finding That The Union Acted With Actual
Malice, Conflicts With Federal Labor Policy And
Decisions Of This Court Allowing Redress For
Malicious Libels According To State Law...... 6
II. The First Circuit’s Opinion Eviscerates Linn v.
United Plant Guard Workers Of America, 383 U.S.
53, 86 S. Ct. 657 (1966) And Subsequent Deci-
sions Of This Court Because The Court Required
The Targeted Victim Of Malicious Libels To
Prove Special Pecuniary Losses Despite Evi-
dence Of General Injury To Reputation And The
Availability Of Presumed Damages Under State
Fp MEEEEE CCE Ce ee ee a ee Or er 10
III. The First Circuit’s Opinion Foreclosing An
_Award Of Punitive Damages Where A Defamed
Business Has Suffered Compensable Harm Of
General Injury To Reputation And Presumed
Damages Under State Law Is Destructive Of
Federal Labor Policy As It Permits Unions To
Publish Defamatory Libels With Immunity From
LAGOS usd s icnacens C355 ke vue paen eka 15
iii
TABLE OF CONTENTS - Continued
a Dl 17
I ot oo ats chal atin b bewinaceiinnl App. 1
iv
TABLE OF AUTHORITIES
Page
Cases
Box Tree South, Ltd. v. Bitterman, 873 F. Supp. 833
GRRE BEM 66a sicbodns sh nos banvanesaaesabas ines 8
Briggs & Stratton Corporation ». National Catholic
Reporter Publishing Company, 978 F. Supp. 1195
GRE SNE, SOE ao ws ceksdicndsavennas caaesonessude 8
Caruso v. Local Union 690, 670 P.2d 240 (Wash.
FI nh 0 onde noti os ngeesa cakes s4sdntadacdiawieses 13
Dun & Bradstreet, Inc. v. Greenmoss Builders, Inc.,
472 US. 748, 105 S. Ct. TIBD CAGES) wee essa cccesss 14
Dunn v. Air Line Pilots Association, 193 F.3d 1185
ay gx rr rere ern Pree rrr rrr 4
Gertz v. Welch, 418 U.S. 323, 94 S. Ct. 2997
GREE od van vin dicho chacsandienesanvetesueesven 12, 13
Goldwater v. Ginzburg, 414 F.2d 324 (2d Cir. 1969),
cert. denied, 396 U.S. 1049, 90 S. Ct. 701 (1970)....15
International Brotherhood of Electrical Workers v.
Maye, S79 A.26 1223 GEG. 1977). .sccvcsicnscences 13
Hanlon v. Davis, 545 A.2d 72 (Md. App. 1988)....... 13
Laudati v. Stea, 44 R.I. 303, 117 A. 422 (1922)........ 15
Linn v. United Plant Guard Workers of America, 383
Ses ee ee ee ee ee CE b's Hed w ac kbapanes passim
Memphis Community School District v. Stachura, 477
US. 29, BOG S. Ch. Za? CRs on oe ccdacccnncenss 14
Metheney v. Monarch Rubber Co., 43 F. Supp.2d 588
(S.D.W.Va. 1999)........ esc panenshaeausernnchee ds 8
Vv
TABLE OF AUTHORITIES - Continued
Page
New York Times v. Sullivan, 376 U.S. 254, 84 S. Ct.
FIO CHG oo ks dec dcdasdccivet sabes ieeaeeeuet 8, 13, 16
O’Brien v. Times Pub. Co., 43 A. 101, 21 R.I. 256
CUT oie 26s cis de dicen cadkgasawasneessseuiaee 15
Old Dominion Branch No. 496, National Association
of Letter Carriers v. Austin, 418 U.S. 264, 94S. Ct.
iy, Bt Perey pre rer pre oy r oer yy Po, fe
Sheeran v. Colpo, 460 A.2d 522 (Del. 1983)........... 12
Tosti v. Ayik, 476 N.E. 2d 928 (Mass. 1984)...........8
STATUTES
Labor Management Relations Act, 29 U.S.C. § 185..... 2
National Labor Relations Act, as amended, 29
ULB © Bais ov vc datees etn disvesas tks ersenaenen 2
TREATISES
Prosser, Law of Torts, § 778 (1964)............2-008- 15
PETITION FOR WRIT OF CERTIORARI
Intercity Maintenance Company (“Intercity”) respect-
fully petitions for writ of certiorari to review the decision
and judgment of the United States Court of Appeals for
the First Circuit.
OPINIONS BELOW
The opinion of the United States Court of Appeals for
the First Circuit giving rise to this petition is reported at
241 F.3d 82 (2001). It is reprinted in the Appendix
(“App.”) hereto at App. 1. The decision of the United |
States District Court for the District of Rhode Island
granting the Defendants’ Motion for Judgment as a Mat-
ter of Law is not reported. (App. 18). The initial decision
of the United States District Court for the District of
Rhode Island granting in part and denying in part the
Defendants’ Motions for Summary Judgment is reported
at 64 F. Supp. 2d 483 (1999). (App. 26). |
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JURISDICTION
On April 11, 2000, the United States District Court for
the District of Rhode Island issued a bench decision
granting the Motion for Judgment as a Matter of Law of
Defendants Service Employees International Union, Local
254 and Donald Coleman with respect to Intercity’s
claims. Judgment was entered by the District Court on
April 11, 2000. (App. 25). On April 12, 2000, Intercity filed
its notice of appeal to the United States Court of Appeals
for the First Circuit. In an opinion filed on March 2, 2001,
the First Circuit affirmed the ruling of the District Court
with respect to Intercity’s defamation claims and entered
its judgment on March 2, 2001.1 Pursuant to Supreme
Court Rule 13 (1), this petition has been filed within
ninety (90) days of the entry of judgment.
The jurisdiction of this Court is invoked pursuant to
28 U.S.C. § 1254 (1).
STATUTES INVOLVED IN THIS CASE
This case involves the National Labor Relations Act,
as amended, 29 U.S.C. § 158 (“NLRA”) (reprinted at App.
78), as construed by Linn v. United Plant Guard Workers of
America, 383 U.S. 53, 86 S. Ct. 657 (1966) and the Labor
Management Relations Act, 29 U.S.C. § 185 (“LMRA”)
(reprinted at App. 90).
te
vy
STATEMENT OF THE CASE
Intercity is a small, family-owned, non-union corpo-
ration providing janitorial services. It was formed in 1988
by its president, Michael Bouthillette (“Bouthillette”). In
1995, Intercity was pursued by Local 254 of the Service
Employees International Union (“Local 254”) seeking to
1 The First Circuit reversed the ruling of the District Court
on Intercity’s claims of unlawful secondary activity and
remanded the case for a new trial. (App. 16).
organize Intercity’s workers. Intercity rebuffed Local
254’s demands for voluntary recognition and insisted that
Local 254 seek representational status through the
National Labor Relations Board. In response, Local 254
began a ruthless campaign of intimidation and threats
against Intercity, Bouthillette and his family members.
Local 254 also distributed defamatory letters and hand-
bills to Intercity’s largest customers, Blue Cross/Blue
Shield of Rhode Island (“Blue Cross”) and Women &
Infants Hospital (“WIH”). (Samples of said letters and
handbills are reproduced at App. 92). The defamatory
documents conveyed vicious, grave and false accusations
that Intercity exposed its workers to unsafe and unsani-
tary working conditions as well as chemical and biolog-
ical hazards, including HIV and the Hepatitis B virus.
Local 254 sent two letters to Blue Cross accusing
Intercity of mistreating and endangering the health and
safety of its workers, stating that “a health emergency
exists,” that Intercity was in violation of federal and state
laws and that Intercity had failed to protect its workers
from sickness and hazards caused by chemical contam-
ination. These assertions were presented as factual repre-
sentations of Intercity’s health and safety record. They
were patently false because Intercity provided all neces-
sary manuals, training, protective gear and clothing to its
workers.
In trial testimony, agents of Local 254 admitted they
informed Intercity in March 1995 that they no longer
sought to organize Intercity’s employees. Instead, Local
254 cavalierly admitted that their goal was to run Inter-
city out of business by causing it to lose all of its cus-
tomers.
On March 31, 1995, Local 254 began picketing and
handbilling another of Intercity’s primary customers,
WIH, carrying signs and handing out leaflets to cus-
tomers, patients and other persons passing by the hospi-
tal. The picketing continued for five days. One of the
handbills distributed in front of WIH proclaimed:
INTERCITY HAS INFECTED ITS CLEANERS
AS FOLLOWS:
INTERCITY DOES NOT PAY LIVING WAGES
INTERCITY DOES NOT PAY HOLIDAY PAY
INTERCITY DOES NOT PAY HEALTH
INSURANCE
INTERCITY EXPOSES ITS WORKERS TO
CHEMICAL AND BIOLOGICAL HAZARDS
INCLUDING HIV AND HEPATITIS B.
Local 254 published these proclamations as statements of
fact. But at trial, the evidence exposed their blatant falsity
because Intercity: (1) paid its workers wages above area
standards; (2) provided its workers with paid holidays,
health insurance, vacations, bonuses and low interest
loans; and (3) met requisite health and safety protocols.
Of critical and prominent import to this petition is
the lower courts’ adjudication that Local 254 acted with
actual malice in publishing the false, defamatory letters
and handbills.* The District Court expressly found:
2 The questions presented in this petition have never been
squarely addressed by any other Court of Appeals because the
courts in previous defamation cases involving labor unions
premised their rulings on the determination that the actual
malice test required by Linn v. United Plant Guard Workers of
America, 383 U.S 53, 86 S. Ct. 657 (1966) had not been met.
Compare Dunn v. Air Line Pilots Association, 193 F.3d 1185,
1197-1200 (11th Cir. 1999).
[T]he evidence indicates that Coleman and Sul-
livan [agents of Local 254], and Local 254, made
false statements of fact by writing letters to Blue
Cross and Women & Infants, and by distributing
leaflets at Women & Infants. The evidence is
overwhelming that those statements were either
knowingly false or made with reckless disregard
for truth or falsity.
(App. 20). The District Court further concluded that:
The plaintiff has succeeded in proving that the
defendants, Local 254 and Coleman, and other
employees of the Local, such as Sullivan and
Lima, are lawless, marauding, disingenuous,
character assassins who deserve their comeup-
pance.
(App. 20). These findings were accepted by the Court of
Appeals.
Consequently, the defamatory nature of the pub-
lished statements as well as the actual malice of the union
defendants have been conclusively established for the
purposes of this petition.
Local 254’s defamatory publications sullied Inter-
city’s goodwill and integrity as an employer and service
provider. The resulting harm was general injury to Inter-
city’s professional reputation, entitling it to recover pre-
sumed damages under state law. Nevertheless, the First
Circuit ruled that “plaintiffs who endure even malicious
libels during a labor dispute must present evidence of
harm from defamation in order to recover, notwithstand-
ing the law of states such as Rhode Island in which
damages would otherwise be presumed.” (App. 15). The
First Circuit further concluded that in the absence of
evidence of actual damages, no punitive damages may be
awarded. (App. 16). The First Circuit’s decision stripped
Intercity of a remedy for the general injury to its reputa-
tion. More importantly, it serves to insulate and immu-
nize unions from responsibility for their malicious acts,
contrary to federal labor policy and the rulings of this
Court.
REASONS FOR GRANTING THE WRIT
I. The First Circuit’s Ruling That Intercity’s State Law
Defamation Claims Were Preempted Pursuant To
Linn v. United Plant Guard Workers of America, 383
U.S. 53, 86 S. Ct. 657 (1966), Despite Its Finding That
The Union Acted With Actual Malice, Conflicts With
Federal Labor Policy And Decisions Of This Court
Allowing Redress For Malicious Libels According
To State Law.
The underlying policy of the federal labor laws can-
not be furthered by protecting defamatory speech mali-
ciously published by a labor union. No legitimate federal
labor law objective is advanced by sanctioning a union’s
malicious libels, especially where the intent is neither to
organize an employer nor to truthfully inform the public
of inequitable treatment, but rather to harm the business
reputation of a non-union employer.? This conduct is
3 Each of Local 254’s agents admitted at trial that no labor
dispute existed between Local 254 and WIH or between Local
254 and Blue Cross or between Local 254 and Intercity at the
time the handbills were distributed. These witnesses further
accorded no protection under federal labor law, and
therefore is not governed by the NLRA or the LMRA.
This Court formulated the applicable standard for
applying state defamation law in the labor context in Linn
v. United Plant Guard Workers of America, 383 U.S. 53, 86 S.
Ct. 657 (1966), reiterated in Old Dominion Branch No. 496,
National Association of Letter Carriers v. Austin, 418 U.S.
264, 94 S. Ct. 2770 (1974). The dictates of Linn control this
case:
[T]he most repulsive speech enjoys immunity
provided it falls short of a deliberate or reckless
untruth. But it must be emphasized that mali-
cious libel enjoys no constitutional protection in any
context. After all, the labor movement has grown
up and must assume ordinary responsibilities.
The malicious utterance of defamatory statements in
any form cannot be condoned, and unions should
adopt procedures calculated to prevent such .
abuses.
Id. 383 U.S. at 62, 86 S. Ct. at 663. [Emphasis added].
Where union statements are false and published with
actual malice, that is, made with knowledge of their
falsity or with reckless disregard of whether they are true
or false, a union must be held accountable under state
law. Linn, 383 U.S. at 61, 86 S. Ct. at 662; Old Dominion,
418 U.S. 281, 94 S. Ct. at 2779-2780.4 In cases of malicious
libel this Court has stated:
admitted that as of March 31, 1995, the date the picketing began
at WIH, Local 254 no longer sought to organize or represent
Intercity’s employees, but only wanted to run it out of business.
4 This Court has equated the term actual malice as
shorthand for the “knowledge of falsity or reckless disregard of
The exercise of state jurisdiction here would be
a ‘merely peripheral concern of the Labor Man-
agement Relations Act,’ provided it is limited to
redressing libel issued with knowledge of its
falsity, or with reckless disregard of whether it
was true or false. Moreover, we believe that an
‘overriding state interest’ in protecting its resi-
dents from malicious libels should be recog-
nized in these circumstances.
Linn, 383 U.S. at 61, 86 S. Ct. at 662.
Linn did not federalize state defamation law, but
merely preempted it to a limited degree, where there was
no proof of actual malice. See Box Tree South, Ltd. v.
Bitterman, 873 F. Supp. 833, 842 (S.D.N.Y. 1995). See also
Metheney v. Monarch Rubber Co., 43 F. Supp. 2d 588
(S.D.W.Va. 1999) (NLRA does not completely preempt
state law defamation claims); Tosti v. Ayik, 476 N.E. 2d 928
(Mass. 1984) (state law subject matter jurisdiction over
plaintiff’s libel claim not preempted by federal law).
Thus, proof of “actual malice” removes this case from
the ambit of federal law. Old Dominion, 418 U.S. 264, 94 S.
Ct. 2770 (1974) (actions under state law preempted by
federal law to the extent that the State sought to make
actionable statements in labor disputes which were pub-
lished without knowledge of their falsity or reckless dis-
regard for the truth). See Briggs & Stratton Corporation v.
National Catholic Reporter Publishing Company, 978 F. Supp.
1195, 1199 (E.D. Wisc. 1997) (state libel and slander action
the truth” standard, applied under federal constitutional
precepts, originally enunciated in New York Times v. Sullivan, 376
U.S. 254, 84 S. Ct. 710 (1964). Old Dominion, 418 U.S. at 281 94S.
Ct. at 2780.
may be maintained within the context of a labor dispute
where defamatory publication made with reckless disre-
gard of truth or falsity).5
The applicability of the preemption doctrine under
the labor laws must be read in conjunction with federal
labor policy. Linn addressed speech uttered in the context
of a labor dispute, a union organizing campaign. In fol-
lowing Linn, the Supreme Court in Old Dominion, stated:
Whether Linn’s partial preemption of state libel
remedies is applicable obviously cannot depend
upon some abstract notion of what constitutes a
labor dispute; rather application of Linn must
turn on whether the defamatory publication is
made in a context where the policies of the
federal labor laws leading to protection for free-
dom of speech are significantly implicated.
418 U.S. at 279, 94 S. Ct. at 2778.
In this case, the District Court concluded that “[t]he
evidence is overwhelming that those statements [in the
letters and handbills] were either knowingly false or
made with reckless disregard for truth or falsity.” (App.
20). The First Circuit likewise concluded that “Local 254.
made scant effort to investigate the veracity” of the state-
ments set forth in the letters and handbills. (App. 12). The
dictates of Linn required that once actual malice was
established, Intercity’s state law defamation claims
> In fact, in its initial ruling on the preemption issue, the
District Court correctly found that “the key to this particular
species of preemption analysis is malice,” and accordingly,
Intercity’s state law defamation claims as well as its claim for
punitive damages would not be preempted by federal labor law
if actual malice was established. (App. 64).
10
should have been determined by the jury in accordance
with Rhode Island law.
Defendants’ malicious speech and unlawful objective
simply cannot be said to fall within the penumbra of
protected speech under the guise of a legitimate labor
dispute, as such speech obviously does not further any
legitimate federal labor policy. Accordingly, Intercity’s
defamation claims should have been analyzed with fidel-
ity to Rhode Island tort law, which permits the recovery
of presumed damages for general injury to reputation
and punitive damages.
II. The First Circuit’s Opinion Eviscerates Linn v.
United Plant Guard Workers of America, 383 U.S. 53,
86 S. Ct. 657 (1966) And Subsequent Decisions Of
This Court Because The Court Required The Tar-
geted Victim Of Malicious Libels To Prove Special
Pecuniary Losses Despite Evidence Of General
Injury To Reputation And The Availability Of Pre-
sumed Damages Under State Law.
Despite acknowledging Linn’s exception to the Gar-
mon preemption rule for defamatory statements made
with actual malice, the First Circuit concluded that Linn
preempts reliance on the presumption of damages allow-
able under state law even where actual malice has been
incontrovertibly proven. (App. 13-15). This conclusion
misapprehends Linn and is patently wrong - a plaintiff
should not be required to “endure even malicious libels”
without recourse to state law simply because the mali-
cious actor is a union. (App. 15).
To superimpose a requirement of proof of specific
monetary losses as a condition to recover for malicious
11
defamation in the labor context, will have the practical
effect of licensing unions to employ an arsenal of defama-
tory weapons capable of destroying non-union busi-
nesses, without any fear of repercussions. Such an
evidentiary hurdle was never mandated by Linn. Quite
the contrary, Linn allowed for optional forms of proof of
harm:
[A] complainant may not recover except upon
proof of such harm, which may include general
injury to reputation, consequent mental suffer-
ing, alienation of associates, specific items of
pecuniary loss, or whatever form of harm would be
recognized by state tort law.
Linn, 383 U.S. at 65, 86 S. Ct. at 664. [Emphasis added].
It is inherently improbable for a business smeared by
a union’s calculated, malicious vitriol to ascertain the
identity of dissuaded customers to attest that defamatory
publications deterred them from doing business. The
practical reality of this case is that prospective customers
simply walked away and dismissed Intercity from consid-
eration for work. To preclude recovery in such a circum-
stance where injury to reputation is presumptive and
obvious, would contort federal labor policy and the dic-
tates of Linn (which emphasize that “malicious libel
enjoys no constitutional protection in any context”). Linn,
383 U.S. at 62, 86 S. Ct. at 663. This result is manifestly
unjust and simply wrong.
Linn’s proof of harm requirement is not limited to
proof of quantifiable pecuniary loss or special damages.
Rather, proof of general injury to reputation or any other
form of harm compensable under state law is sufficient. A
jury may take into account probable as well as proven
12
injury to a plaintiff’s reputation based upon the nature of
the libel, the extent of the distribution, and the probable
effect on the persons who may have read it. Sheeran v.
Colpo, 460 A.2d 522 (Del. 1983).
As stated by the United States Supreme Court in
Gertz v. Welch, 418 U.S. 323, 349, 94 S. Ct. 2997, 3012
(1974):
Suffice to say that actual injury is not limited to
out of pocket loss. Indeed the more customary
types of actual harm inflicted by defamatory
falsehood include impairment of reputation and
standing in the community, personal humilia-
tion, and mental anguish and suffering. Of
course, juries must be limited by appropriate
instructions, and all awards must be supported
by competent evidence concerning the injury,
although there need be no evidence which assigns a
dollar value to the injury.
Id. [Emphasis added].
In Linn, the Supreme Court carefully noted the dis-
tinction between state law actions which were actionable
per se and the availability of presumed damages. The
Court did not foreclose the availability of presumed dam-
ages, but concluded “Linn must show that he was injured
by the circulation of the statements; this necessarily
includes proof that the words had a defamatory mean-
ing.” Linn, 86 S. Ct. 663, 383 U.S. at 58, n.2. Thus, pur-
suant to Linn, once actual malice has been established, a
plaintiff is entitled to compensation for injury to its repu-
tation where the words published by the union were
defamatory on their face.
13
This conclusion comports with the First Amendment
law of New York Times v. Sullivan, 376 U.S. 254, 84 S. Ct.
710 (1964) and its progeny which affirm that damages
may be presumed from the specific language used, so
long as the actual malice standard has been met and the
words are defamatory on their face, thereby implicating a
person’s business or professional reputation. Gertz v.
Welch, 418 U.S. 323, 349, 94 S. Ct. 2997, 3011-3012 (1974)
(holding “It is necessary to restrict defamation plaintiffs
who do not prove knowledge of falsity or reckless disre-
gard for the truth to compensation for actual injury).® See
also Caruso v. Local Union 690, 670 P.2d 240 (Wash. 1983)
(recognizing jury could award presumed damages
against union where actual malice established); Interna-
tional Brotherhood of Electrical Workers v. Mayo, 379 A.2d
1223 (Md. 1977) (permitting recovery of presumed and
punitive damages against union where actual malice
standard met); Hanlon v. Davis, 545 A.2d 72 (Md. App.
1988) (same).
The language of the letters and handbills specifically
targeted Intercity’s business and reputation with its cus-
tomers. Both the character of the words and the circum-
stances of the publication establish legal injury in fact,
entitling Intercity to presumed damages for general
6 On remand, the Eighth Circuit affirmed the award of
$100,000 in compensatory damages and $300,000 in punitive
damages, summarizing that because there was evidence of
actual malice in the publication of the defamatory statements,
which were defamatory on their face, the Constitution would
not prohibit presumed damages. Gertz v. Robert Welch, Inc., 680
F.2d 527, 540 (1982).
14
injury to its reputation, whether or not such damages are
precisely quantifiable.
As acknowledged by the Supreme Court:
The rationale of the common-law rules has been
the experience and judgment of history that
‘proof of actual damage will be impossible in a
great many cases, where from the character of
the defamatory words and the circumstances of
the publication, it is all but certain that serious
harm has resulted in fact.’
Dun & Bradstreet, Inc. v. Greenmoss Builders, Inc., 472 U.S.
749, 760, 105 S. Ct. 2939, 2946 (1985). (citations omitted).
Moreover, the Supreme Court has consistently recognized
that presumed damages are appropriate when a plaintiff
seeks compensation for an injury that is likely to have
occurred but difficult to ascertain or impossible to mea-
sure. Memphis Community School District v. Stachura, 477
U.S. 299, 310-311, 106 S. Ct. 2537, 2545 (1986).
Intercity proved general injury to its reputation
resulting from the distribution of the defamatory letters
and handbills. Bouthillette testified credibly about Inter-
city’s reputational harm, inquiries from nurses,
employees and doctors about Intercity’s treatment of its
workers and their conditions of employment, and the
considerable efforts expended to preserve its existing cus-
tomer base.
However, despite expressly finding that “Intercity
presented evidence of harm to its business reputation
based on statements that are defamatory on their face”
(App. 14), the First Circuit concluded that Intercity could
not recover compensatory damages unless it presented
15
evidence that Local 254’s malicious accusations caused
the loss of specific contracts. (App. 15-16).
The Court of Appeals’ determination that Linn
requires proof of specific or special damages in addition
to proof of actual malice to recover for defamation in the
labor context was erroneous. The Court confused Linn’s
requirement of proving some compensable harm as
requiring proof of specific damages. (App. 15-16). The
Court of Appeals failed to recognize that “special dam-
ages” in a defamation case, that is, proof of pecuniary
loss apart from general injury to reputation, is required
only in those circumstances where there has been slander
or the words used are not defamatory on their face.
Prosser, Law of Torts, § 778 (1964). This case involved
libel which was defamatory on its face, as the handbills
accused Intercity of infecting its workers and attacked its
business reputation. Therefore, proof of special damages
was not required. Laudati v. Stea, 44 R.I. 303, 117 A. 422
(1922); O’Brien v. Times Pub. Co., 43 A. 101, 21 R.I. 256
(1899).
Ill. The First Circuit’s Opinion Foreclosing An Award
Of Punitive Damages Where A Defamed Business
Has Suffered Compensable Harm Of General
Injury To Reputation And Presumed Damages
Under State Law Is Destructive Of Federal Labor
Policy As Its Permits Unions To Publish Malicious
Libels With Immunity From Liability.
In the defamation context, punitive damages are
intended for the protection of the libeled individual's
reputation as well as the protection against like abuse of
all other persons similarly situated. Goldwater v. Ginzburg,
16
414 F.2d 324 (2d Cir. 1969), cert. denied, 396 U.S. 1049, 90 S.
Ct. 701 (1970).
Without the counterbalancing deterrent of punitive
damages when unions cross the line into actual malice,
they will continue to publish malicious libels against non-
union businesses with impunity. The First Circuit’s hold-
ing eliminating the availability of punitive damages to
deter a union’s malicious libels, must be rectified by this
Court. Such a precedent effectively green-lights
unbridled, malicious defamation by labor unions to the
detriment of small businesses nationwide.
In Linn the Court held that in order to protect the
objectives of federal labor policy “the defamed party
must establish that he had suffered some sort of compen-
sable harm as a prerequisite to the recovery of additional
punitive damages”. Linn, 383 U.S. at 65, 86 S. Ct. at 665.
Thus, all that it required for an award of punitive dam-
ages is proof of compensable harm, which may be general
injury to reputation or be presumed, and proof of “actual
malice” under the New York Times standard, as analyzed
supra. Nevertheless, the First Circuit erroneously con-
cluded “absent evidence of actual damages, however, no
punitive damages may be awarded”. (App. 16).
Intercity convincingly proved harm to its business
reputation, entitling it to compensatory damages on its
defamation claims. Since Intercity adduced sufficient evi-
dence to meet both the actual malice standard under
federal law and compensable harm resulting from the
defamatory publications, Intercity’s claim for punitive
17
damages should have been submitted to the jury. Linn,
2 383 U.S. at 66, 86 S. Ct. at 665. :
+
CONCLUSION
For the reasons set forth herein, the petition for writ
of certiorari should be granted.
Respectfully submitted,
VincENT F. Racosta, Jr.
MatTHEw T. OLIVERIO
CHRISTINE M. CurLey
Shakespeare Hall - Penthouse
128 Dorrance Street
Providence, Rhode Island 02903
(401) 274-2100; FAX (401) 861-2260
Counsel for the Petitioner
App. i
APPENDIX TO PETITION FOR WRIT OF CERTIORARI
UNITED STATES SUPREME COURT
OPINION OF THE FIRST CIRCUIT COURT OF
GEPRRED ssekssscc ete ee App. 1
JUDGMENT ENTERED BY THE FIRST CIRCUIT
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DECISION OF DISTRICT COURT GRANTING
DEFENDANTS MOTION FOR JUDGMENT AS
Fe Se Ce Pe BA oss kk kos ce App. 18
FINAL JUDGMENT ENTERED BY DISTRICT
SAE 9 0545 Cad yaces bi Acuea eee uae App. 25
SUMMARY JUDGMENT OPINION OF DISTRICT
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PEGS Ne akicheke cnoc woke ie uk ess Lace App. 78
HANDBILLS DISTRIBUTED BY
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App. 1
United States Court of Appeals,
First Circuit.
INTERCITY MAINTENANCE COMPANY,
Plaintiff, Appellant,
Vv.
LOCAL 254, SERVICE EMPLOYEES INTERNATIONAL
UNION; SERVICE EMPLOYEES
INTERNATIONAL UNION, AFL-CIO; Victor Lima
and Donald Coleman, Defendants, Appellees.
No. 00-1522.
Heard Nov. 9, 2000.
Decided March 2, 2001.
Vincent F. Ragosta Jr., with whom Matthew T.
Oliverio and Christine M. Curley were on brief, for appel-
lant.
John B. Lawlor Jr., with whom Daniel V. McKinnon
and Dean J. Wagner were on brief, for appellees Local
254, Victor Lima and Donald Coleman.
Steven K. Hoffman, with whom Richard M. Peirce,
Adam C. Robitaille and Christy Hoffman were on brief,
for appellee Service Employees International Union.
Before SELYA, Circuit Judge, COFFIN, Senior Circuit
Judge, and STAHL, Circuit Judge.
COFFIN, Senior Circuit Judge.
This case stems from a labor dispute in which local
union officials used heavy-handed tactics in an attempt to
unionize a company. Appellant Intercity Maintenance
Company (Intercity), a non-union janitorial service, sued
the Service Employees International Union (SEIU), its
App. 2
local affiliate (Local 254), and two of the affiliate’s offi-
cers, Victor Lima and Donald Coleman, for unlawful sec-
ondary activity in violation of § 303 of the Labor
Management Relations Act (LMRA), 29 U.S.C. § 187, and
a variety of state tort claims, two of them alleging defa-
mation. Summary judgment was granted to the SEIU and
Lima on all counts, and to Coleman on all but the defa-
mation claims. Local 254 went to trial on the federal claim
and, along with Coleman, on the two remaining state law
counts for defamation. After the close of the plaintiff’s
evidence, the court in a bench ruling granted defendants’
Rule 50 motion for judgment as a matter of law on the
three outstanding counts. We affirm the summary judg-
ment in all respects and the Rule 50 judgment on the
defamation claims, but remand the LMRA claim for
retrial.
We are in full agreement with the district court’s
convincing resolution of the summary judgment issues
and adopt its reasoning as articulated in its published
opinion. See Intercity Maint. Co. v. Local 254 Serv.
Employees Int'l Union, 62 F.Supp.2d 483 (D.R.I.1999). We
therefore focus our review on the Rule 50 judgment
granted at trial. Our brief recitation of the pertinent facts
is culled from the district court’s ruling, as well as rele-
vant trial testimony, and presented in the light most
favorable to Intercity. See Russo v. Baxter Healthcare Corp.,
140 F.3d 6, 8 (1st Cir.1998).
Background
Intercity provided janitorial services to Women and
Infants Hospital (Women & Infants) and Blue Cross/Blue
App. 3
Shield (Blue Cross) in Providence, Rhode Island, since
1989 and 1990, respectively. Beginning in late 1994, Local
254, acting through its director of organizing, Coleman,
and his assistant, Lima, made repeated attempts to per-
suade Intercity to unionize its eighty employees and let
Local 254 be their collective bargaining representative.
Intercity President Michael Bouthillette rebuffed these
overtures, refusing to sign the proposed collective bar-
gaining agreement because, he said, it was up to his
workers, not him, to decide whether to unionize.
In January and February 1995, Lima repeatedly
warned Bouthillette to sign the collective bargaining
agreement, or else Local 254 would drive Intercity out of
business by picketing in front of its two major customers,
Women & Infants and Blue Cross.! On March 28th, Cole-
man reiterated this threat to Blue Cross attorney Gary St.
Peter, who testified that Coleman had told him he would
throw up a picket line in front of Blue Cross “wheth-
er... it’s illegal or not.”
On March 20, 1995, Coleman sent two letters to Blue
Cross’s director of facilities management, John Leite, who
was in charge of procuring janitorial services. The first
letter, addressed to Bouthillette and copied to Leite,
accused Intercity of violating federal and state laws and
regulations in handling hazardous substances, and
demanded information about Blue Cross’s ventilation
? The threats made against Bouthillette personally were
such that the Rhode Island Superior Court granted him a
temporary restraining order, enjoining Lima from coniacting
him or his family.
App. 4
system. The second letter, sent the same day directly to
Leite, requested the same information from Blue Cross.
On May 5th, Blue Cross put its cleaning services
contract out to bid, and Intercity lost it to a unionized
bidder. Bouthillette testified that the bid Intercity submit-
ted, $6,597 per month, was the same price it had charged
since 1990 when it first started the Blue Cross account.
Bouthillette also testified that Leite had told him “we’re
going to go with the union contractor, and if you can
resolve things with [Local 254], there’s a good chance
you'll get [the contract] back, but if not. . . . if you don’t,
there’s not much of a chance.” At one point, Lima told
Bouthillette that Local 254 no longer wanted to organize
his workers; it just wanted to drive Intercity out of busi-
ness. By August 1995, Intercity was no longer servicing
Blue Cross.
Local 254 did not limit its interference with Inter-
city’s customers to Blue Cross. On March 31, 1995, Local
254 began a week-long picket line outside of Women &
Infants, distributing printed handbills that contained
grave accusations, including false references to Intercity
not providing health insurance or holiday pay to its
employees and paying less than the prevailing wage. In
fact, Intercity did provide those benefits and paid its
employees more than the union wage contemplated in the
proposed collective bargaining agreement. Bouthillette
testified that his contact at Women & Infants, Mark Neal,
told him on the day picketing started, “We can’t have this
here. . . . We’ll do what we have to do, but this doesn’t
look very good for you in the future.” Nearly two years
App. 5
later, in 1997, Intercity lost the contract for three build-
ings at Women & Infants, but continued to perform ser-
vices at seven others.
The original complaint, filed in 1995, alleged the
LMRA claim along with state tort causes of action and
was amended in 1997 to add separate counts for defama-
tion involving Blue Cross (Count IV) and Women &
Infants (Count V). As we have noted, only the LMRA
claim against Local 254, and the defamation claims
against Local 254 and Coleman, went to trial.
At trial, Bouthillette testified that Intercity suffered
pecuniary damage not only from losing the accounts, but
also from defendants besmirching its reputation, which
diverted Bouthillette from developing new business due
to the inordinate amount of time he spent reassuring
customers that they would not be targeted for picketing.
Plaintiff also introduced into evidence an accounting
report, which quantified Intercity’s loss from the Blue
Cross account at roughly $30,000 per year.
In a bench ruling issued at the close of the plaintiff’s
evidence, the court granted defendants’ Rule 50 motion
on all three claims. It held the evidence in support of
Intercity’s LMRA claim insufficient as a matter of law
because, even if Local 254’s actions were proscribed ille-
gal secondary activity (which was assumed for purposes
of the decision), Intercity failed to show how that activity
caused it to lose the Blue Cross and Women & Infants
accounts. As for the two defamation counts, the court
held that, although the evidence of knowing or reckless
false statements was “overwhelming,” Intercity presented
App. 6
“no evidence that the plaintiff lost business at Blue Cross
or at Women & Infants as a result of the defamation.”
Appellant argues that it presented sufficient evidence
on both fronts to reach the jury. On the LMRA claim,
appellant asserts that the jury should have been afforded
an opportunity to find that Intercity lost both the Blue
Cross and Women & Infants accounts due to Local 254’s
illegal interference. On the defamation claims, appellant
argues that it did not need to present evidence to prove
damages and, even if it did, its proof on damages was
sufficient. It also assigns error to the court’s refusal to
admit evidence of Local 254’s assets in support of a claim
for punitive damages.
We review Rule 50 challenges to the sufficiency of
evidence presented at trial de novo, affirming entry of
judgment as a matter of law “only if there ‘is no legally
sufficient evidentiary basis for a reasonable jury to find
for [the non-moving party].’ ” Tang v. Rhode Island Dep’t of
Elderly Affairs, 163 F.3d 7, 11 (1st Cir.1998) (quoting
Fed.R.Civ.P. 50(a)(1)). When judgment is entered before
the jury is called upon to render its verdict, we examine
the legal sufficiency of the evidence in the light most
favorable to the non-moving party, and require more than
a mere scintilla of evidence or speculation to justify the
submission of an issue to the jury. Id. And, of course, we
must ensure that the trial court has refrained from mak-
ing credibility determinations or weighing the evidence.
Discussion
Appellant challenges the court’s Rule 50 judgment,
arguing that its claims of unlawful secondary activity and
App. 7
defamation should have gone to the jury. We agree, in
part. As for the LMRA claim, we conclude that the evi-
dence linking Intercity’s loss of the Blue Cross account to
Local 254’s interference was sufficient to merit consider-
ation by a fact finder, but the evidence of losses attendant
to the union’s activities at Women & Infants was inade-
quate as a matter of law, particularly because that account
was not terminated until almost two years later. As for
the defamation claims, Intercity failed to introduce more
than a scintilla of evidence of reputational harm or other
specific damages. Accordingly, we remand the LMRA
claim for trial, limited to liability for, and damages stem-
ming from, Intercity’s loss of the Blue Cross account, and
affirm the district court’s judgment on the defamation
claims.
Unlawful Secondary Activity
Section 8(b) of the LMRA makes it an unfair labor
practice for unions to threaten, coerce, or restrain a com-
pany by forcing it to cease doing business with another
company. See 29 U.S.C. § 158(b)(4)(ii)(B).2 Direct efforts to
2 “(b) It shall be an unfair labor practice for a labor
organization or its agents —
(4) (ii) to threaten, coerce, or restrain any person engaged in
commerce or in an industry affecting commerce, where in either
case an object thereof is -
(B) forcing or requiring any person to cease . . . doing business
with any other person, or forcing or requiring any other
employer to recognize or bargain with a labor organization as
the representative of his employees unless such labor
organization has been certified as the representative of such
employees under the provisions of section 159 of this title:
App. 8
pressure an employer with whom a union has a dispute
are acceptable, but indirect efforts to pressure a second-
ary employer are unfair labor practices. Abreen Corp. v.
Laborers’ Int'l Union, 709 F.2d 748, 754-55 (1st Cir.1983).
Here there was no dispute that Blue Cross was a second-
ary employer. Coleman, acting on behalf of Local 254,
threatened to picket Blue Cross unless it ceased doing
business with Intercity, a threat made not only to Bou-
thillette, but repeated to his attorney and the attorney for
Blue Cross. The district court recognized this as “epito-
miz{ing] the classic description of coercion within the
labor law context.” Intercity, 62 FSupp.2d at 496 (“The
evidence presented by plaintiff is not subtle; it reveals a
transparent intention by Local 254 to pressure Blue Cross
improperly.”).
Despite this strong evidence of Local 254’s improper
secondary activity, the court did not let the claim go to
the jury. It entered judgment for Local 254 on the ground
that Intercity had failed to offer sufficient evidence that it
lost the Blue Cross account because of Local 254’s unlaw-
ful conduct. In analyzing Intercity’s loss of the Blue Cross
account, the court reasoned:
There is not one shred of evidence produced at
this trial to indicate why Blue Cross elected to
put its janitorial contract out to bid. No one
from Blue Cross testified. The Court and the
jury can draw the inference that the failure of
the plaintiff to produce Leite, who was the key
Provided, That nothing contained in this clause (B) shall be
construed to make unlawful, where not otherwise unlawful, any
primary strike or primary picketing. ...” 29 U.S.C. § 158.
App. 9
man in this area, and probably made the deci-
sion, was because his testimony would have
been of no value to the plaintiff. The point is
that Blue Cross did put all of its janitorial work
out to bid. The Plaintiff did bid, and didn’t
receive the bid and didn’t receive the contract.
The inference is that the plaintiff was not the
low bidder. In any event, there’s no evidence
from Blue Cross as to why the plaintiff was not
chosen. The jury should not be allowed to spec-
ulate because it is the plaintiff that has the bur-
den of proof, and it is the plaintiff’s obligation
to produce witnesses who will support its cause
of action. In this case the plaintiff has failed to
do so.
This reasoning was in error because the court imper-
missibly drew negative inferences against Intercity. It
inferred that the failure to call Leite “was because his
testimony would have been of no value” and that Inter-
city lost the Blue Cross contract because “plaintiff was
not the low bidder.” The jury could have reasonably
concluded otherwise.
As to the sufficiency of the evidence, the court simply
noted that there was no basis for a finding of proximate
cause. Neither it nor the parties attempted to give this
term further definition. In our own jurisprudence dealing
with unlawful activity, we have had three occasions to
consider when, in accordance with the statutory wording,
damages may be said to have been sustained “by reason
of” the illegal activity. 29 U.S.C. § 187(b).3 But in this case
3 In Abreen, our first such case construing the “by reason
of” element, we held that where predominantly secondary
App. 10
any difference between these standards is irrelevant, for
under either formulation Intercity presented enough evi-
dence at trial to warrant submission to the jury.
Bouthillette testified that Intercity lost its account
with Blue Cross, not because it overbid,* but because of
Local 254’s threatened picket. Blue Cross attorney St.
Peter corroborated Bouthillette’s testimony about the
union’s unlawful threat. Bouthillette further testified that
Blue Cross’s own procurement officer, Leite, told him that
Intercity would likely lose the account if it did not resolve
activity is at issue, losses traceable to that unlawful union
conduct may be recovered. 709 F.2d at 759. Our two subsequent
cases, however, invoked a more exacting standard adopted from
the Ninth Circuit’s decision in Mead v. Retail Clerks Int'l Ass’n,
523 F.2d 1371 (9th Cir.1975), which held that injury occurs “by
reason of” particular unlawful conduct only if that conduct
“materially contributes” to the injury or is a “substantial factor”
in bringing it about. Id. at 1376; see John B. Cruz Constr. Co., Inc. v.
United Bhd. of Carpenters and Joiners, 907 F.2d 1228, 1232 (1st
Cir.1990); Tresca Bros. Sand & Gravel, Inc. v. Truck Drivers Union,
19 F.3d 63, 65 (1st Cir.1994). Although we did not explicitly note
the distinction, Cruz and Tresca are distinguishable from Abreen
because they involved both lawful and unlawful union activity.
The Mead rule, and our cases applying it, do not apply where
only prohibited secondary activity is at issue.
4 At trial, defense counsel suggested in his opening
statement that Intercity’s bid was nearly double the amount to
which Bouthillette later testified, and more than that of the
unionized bidder who won the contract. Of course, since the
judgment entered before defendants put on their case, they had
no opportunity to substantiate this claim. Because counsel’s
statement was not evidence, we, like a jury, may not consider it,
see, e.g., United States v. Brassard, 212 F.3d 54, 57 (1st Cir.2000),
and therefore must credit Bouthillette’s testimony.
App. 11
the dispute with the union.5 Although plaintiff did not
call Leite to testify, the jury was entitled to consider
Bouthillette’s uncorroborated testimony. Indeed, assum-
ing favorable and permissible inferences and that Bou-
thillette was to be believed, there was no other competing
cause for Intercity’s loss of business.
Moreover, the timing of events permitted the jury to
infer that Intercity’s loss was caused by Local 254’s con-
duct. The last readily identifiable unlawful act was Cole-
man’s threat made to attorney St. Peter on March 28th;
Blue Cross put its contract out to bid on May 5th. The
court foreclosed jury consideration of a permissible infer-
ence, i.e., that these two events - which occurred just five
weeks apart — were causally related. This it may not do.
Because the timing and Bouthillette’s testimony, if
believed, would have sufficed as a matter of law to prove
that Intercity’s loss of the Blue Cross account occurred by
reason of Local 254’s unlawful activity, the LMRA claim
should have been decided by the jury.
Intercity’s loss of the Women & Infants account, by
contrast, is unsupported by such an inference. The nearly
two-year gap between Local 254’s picketing and leaflet-
ing there and Women & Infants’s curtailment of its busi-
ness with Intercity was too attenuated on its own to
permit an inference of some causal connection between
these events. Bouthillette’s testimony that his contact at
Women & Infants, Neal, had made a reference to the
union activity not boding well for Intercity’s future, was
> The court admitted this hearsay testimony over an
objection and without a limiting instruction. Neither party takes
exception to this ruling on appeal.
App. 12
too opaque to rise above the scintilla level, especially in
light of the timing of adverse action. The district court
correctly found the evidence insufficient as a matter of
law to prove Intercity lost any part of the Women &
Infants account by reason of Local 254’s activity.
Defamation
Intercity pleaded its defamation claim in two counts,
one involving Blue Cross (Count IV) and the other
involving Women & Infants (Count V). In support of
Count IV, Intercity relied on Coleman’s March 20, 1995,
letter to Blue Cross’s Leite, which announced that “Inter-
City [wa]s in violation of both Federal and State laws and
regulations.” Count V alleged defamation from handbills
distributed at Women & Infants, which claimed that
“INTERCITY expose [d] its cleaners to chemical and bio-
logical hazards including HIV and Hepatitis B virus,” and
that Intercity did not provide certain benefits or pay a
living wage. Local 254 made scant effort to investigate the
veracity of these charges.
‘ In its summary judgment ruling, the district court
correctly found these assertions to be statements of fact,
not opinion, requiring a jury to determine whether they
were false and made with malice. See Intercity, 62
F.Supp.2d at 504-05. As the court stated in its Rule 50
6 The court also rightly noted that certain other statements
— characterizing Intercity as a “sweatshop,” a “plague,” and an
“infestation,” and Bouthillette as a “bloodsucking, plantation-
minded boss” — were non-actionable opinion, “rhetorical
hyperbole” typical of labor disputes and protected under the
LMRA. Id. at 503. .
App. 13
decision, the evidence presented at trial was “over-
whelming that those statements were either knowingly
false or made with reckless disregard for truth or falsity.”
The judge remarked, “plaintiff has succeeded in proving
that the defendants . . . are lawless, marauding, disin-
genuous, character assassins who deserve their comeup-
pance.” Despite the strong evidence of malice, however,
the court ruled there was “no basis for submitting this
cause of action to the jury” because plaintiff failed to
“allege and prove specific or special damages.”
Relying on Linn v. United Plant Guard Workers, Local
114, 383 U.S. 53, 86 S.Ct. 657, 15 L.Ed.2d 582 (1966), the
court held that Intercity could not rest on the common
law presumption of damages, in which the existence of
injury is presumed from the fact of publication without
evidence of actual loss. See generally Gertz v. Robert Welch,
Inc., 418 U.S. 323, 349, 94 S.Ct. 2997, 41 L.Ed.2d 789
(1974); Carey v. Piphus, 435 U.S. 247, 262 & n. 18, 98 S.Ct.
1042, 55 L.Ed.2d 252 (1978). Appellant argues that the
court misread Linn, and contends in the alternative that it
did present sufficient evidence of damages even without
the presumption. We agree with the court's reading of the
law and view of the evidence.
State tort claims are generally preempted by the
LMRA. See San Diego Bldg. Trades Council v. Garmon, 359
U.S. 236, 243-44, 79 S.Ct. 773, 3 L.Ed.2d 775 (1959). In
Linn, the Court carved out an exception to the Garmon
preemption rule for defamatory statements made with
actual malice, adopting the standard applicable to public
officials from New York Times Co. v. Sullivan, 376 U.S. 254,
280, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964) (defining mali-
cious libel as a statement published “with knowledge that
App. 14
it was false or with reckless disregard of whether it was
false or not”). See Linn, 383 U.S. at 65, 86 S.Ct. 657; see also
Old Dominion Branch No. 496, Nat'l Ass'n of Letter Carriers
v. Austin, 418 U.S. 264, 273, 94 S.Ct. 2770, 41 L.Ed.2d 745
(1974); Barss v. Tosches, 785 F.2d 20, 21 (1st Cir.1986).
In addition to malice, Linn requires “proof of []
harm, which may include general injury to reputation,
consequent mental suffering, alienation of associates,
specific items of pecuniary loss, or whatever form of
harm would be recognized by state tort law.” 383 U.S. at
65, 86 S.Ct. 657; accord Belknap, Inc. v. Hale, 463 U.S. 491,
509, 103 S.Ct. 3172, 77 L.Ed.2d 798 (1983); Farmer v. United
Bhd. of Carpenters & Joiners, Local 25, 430 U.S. 290, 299, 97
S.Ct. 1056, 51 L.Ed.2d 338 (1977). In explicitly requiring
proof of harm, Linn preempts not only non-malicious
libels, but also reliance on the common law presumption,
of damages in those jurisdictions where libel is actionable
per se. 383 U.S. at 58 & n. 2, 65, 86 S.Ct. 657.7 Therefore,
7 In Rhode Island, a common law action for defamation
requires proof of “damages, unless the statement is actionable
irrespective of special harm.” Swerdlick v. Koch, 721 A.2d 849,
859-60 (R.1.1998). Under the common law rule damages are
presumed, and the need to offer evidence obviated, if the
defamatory statement is libelous per se. See id. at 861 (“[FJor
statements to qualify as libel per se, the publication must
impute insolvency, financial embarrassment, unworthiness of
credit, or failure in business to a plaintiff, but to make them so it
is essential that such imputation relate to or affect the plaintiff
in his business.”) (internal quotation marks and alterations
omitted). Since Intercity presented evidence of harm to its
business based on statements that are defamatory on their face,
it would have been able to take advantage of the common law
presumption of damages if the statements had not been made in
the context of a labor dispute.
App. 15
plaintiffs who endure even malicious libels during a labor
dispute must present evidence of harm from defamation
in order to recover, notwithstanding the law of states
such as Rhode Island in which damages would otherwise
be presumed. Cf. Dunn v. Air Line Pilots Ass'n, 193 F.3d
1185, 1210-11 (11th Cir.1999) (Tjoflat, J., dissenting)
(“Under federal law, [ ] a libel action arising out of a labor
dispute requires proof of injury, regardless of state libel
law.” (citing Linn, 383 U.S. at 64-65, 86 S.Ct. 657)).
Under Linn, Intercity could not rest on an unsubstan-
tiated allegation of injury to its reputation. Having cor-
rectly concluded that Linn preempted Intercity from
relying on the common law presumption of damages, the
district court held that the evidence of actual loss due to
reputational harm and consequent lost profits was insuf-
ficient as a matter of law. We agree that Intercity offered
no more than a scintilla of evidence to prove losses stem-
ming from diminished reputation. However, in its
amended complaint Intercity also sought to substantiate
its claim for defamation with evidence of specific dam-
ages apart from reputation: the loss of the Blue Cross and
Women & Infants accounts.
Had appellant shown that it lost the contracts as a
result of Coleman’s libelous letters or the defamatory
handbills, then such proof of a “specific item of pecuniary
loss” would have satisfied the damages element required
by Linn. 383 U.S. at 65, 86 S.Ct. 657. But Intercity pre-
sented no evidence — not even hearsay testimony from
Bouthillette - to show the loss of the contracts resulted
from Local 254’s malicious accusations. The only such
testimony related to threats of union retaliation. The evi-
dence in support of specific damages pleaded in Counts
App. 16
IV and V was therefore inadequate to merit jury consider-
ation.
Intercity also argues that it should have been permit-
ted to recover punitive damages and introduce evidence
of Local 254’s assets in support of that claim. Absent
evidence of actual damages, however, no punitive dam-
ages may be awarded. See Linn, 383 U.S. at 66, 86 S.Ct. 657
(“[A] defamed party must establish that he had suffered
some sort of compensable harm as a prerequisite to the
recovery of additional punitive damages.”). Because
plaintiff failed to present evidence from which the jury
could have found that Intercity suffered actual harm due
to defamation, the district court properly refused to
admit evidence of punitive damages.
Conclusion
We remand for retrial Count II of the Amended Com-
plaint, the LMRA claim; in all other respects, the judg-
ment is affirmed.
Affirmed in part, vacated in part and remanded. No costs.
App. 17
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
No. 00-1522
INTERCITY MAINTENANCE COMPANY,
Plaintiff, Appellant,
V.
LOCAL 254, SERVICE EMPLOYEES INT ERNATIONAL
UNION; SERVICE EMPLOYEES INTERNATIONAL
UNION, AFL-CIO; VICTOR LIMA AND
DONALD COLEMAN,
Defendants, Appellees.
JUDGMENT
Entered: March 2, 2001
This cause came on to be heard on appeal from the
United States District Court for the District of Rhode
Island, and was argued by counsel.
Upon consideration whereof, it is now here ordered,
adjudged and decreed as follows: The judgment of the
district court is affirmed in Part, vacated in part and
remanded to the district court in accordance with the
opinion issued this day. No costs.
By The Court
Phoebe D. Morse
Clerk.
[cc: Messrs. Ragosta, Jr., Lawlor, Jr., & Hoffman]
App. 18
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
2 Me he he he he ee a a a a a a a a a a a a OO a a a
INTERCITY MAINTENANCE CO.
V.
LOCAL 254 SERVICE
~ EMPLOYEES INTERNATIONAL PROVIDENCE, RI
UNION, SERVICE EMPLOYEES 11 APRIL 2000
INTERNATIONAL UNION,
AFL-CIO, VICTOR LIMA and
DONALD COLEMAN
2 De a a ee a a a OO a a OO a OO OO Oh OO
C.A. NO. 95-630 L
BEFORE HONORABLE DISTRICT JUDGE
RONALD R. LAGUEUX
(AND A JURY)
APPEARANCES:
FOR THE PLAINTIFF: VINCENT F. RAGOSTA, JR.,
ESQ.
MATTHEW T. OLIVERIO,
ESQ.
128 Dorrance St.
Providence, RI 02903
274-2100
CHRISTINE M. CURLEY,
ATTY.
275 Beacon Drive
North Kingstown, RI 02852
294-0847
App. 19
FOR THE DEFENDANTS: DANIEL V. MC KINNON,
ESQ.
DEAN J. WAGNER, ESQ.
1168 Newport Avenue
Pawtucket, RI 02861
723-9655
Court Reporter: JOSEPH A. FONTES
Two Exchange Terrace
Providence, RI 02903
401-273-0344
Proceeding reported and produced by
computer-aided stenography
” * -
[32] THE COURT: All right. This is the motion of
the defendants, Local 254 and Coleman, for judgment as a
matter of law after the presentation of the plaintiff’s case
on the three remaining counts of this amended complaint.
Count II charges a violation of 303 (a), illegal second-
ary activity; and Counts IV and V are the defarnation
counts. Count IV relating to publication to Blue Cross,
and Count V, publication to Women & Infants.
In deciding a motion of this type, the Court must
view the evidence in the light most favorable to the
plaintiff and draw all reasonable inferences in favor of
the plaintiff. I will first deal with the defamation counts.
I made a comprehensive ruling on this matter yester-
day at a premature stage in the litigation because I had to
decide whether certain evidence was admissible. To
determine the [33] admissibility of that evidence, I had to
determine whether a prima facie case of defamation had
been made out and, in addition, if one had been made
App. 20
out, whether a prima facie case for punitive damages had
been made out. So I had to analyze the state of the
evidence at that time. The state of the evidence has not
changed. The plaintiff has succeeded in proving that the
defendants, Local 254 and Coleman, and other employees
of the Local, such as Sullivan and Lima, are lawless,
marauding, disingenuous, character assassins who
deserve their comeuppance. However, plaintiff has failed
to prove every element of a defamation cause of action in
this context. Proving some of the elements of defamation
is not enough to send that cause of action to a jury.
As I indicated yesterday, the evidence indicates that
Coleman and Sullivan, and Local 254, made false state-
ments of fact by writing letters to Blue Cross and Women
& Infants, and by distributing leaflets at Women &
Infants. The evidence is overwhelming that those state-
ments were either knowingly false or made with reckless
disregard for truth or falsity. But in a situation where the
Supreme Court has occupied the field, that’s not enough.
It’s not enough even to add that the [34] defamations
were made with actual malice in the common law sense,
that is, with the intent to do harm to the plaintiff.
The Supreme Court has made it clear in Linn, and in
other cases, that the per se libel rule that is in effect in
most states is not applicable in this context and, there-
fore, the plaintiff must allege and prove specific or spe-
cial damages.
In this case, there is no evidence from which the jury
could conclude that the plaintiff has succeeded in prov-
ing special damages arising out of the defamation. It
would be sheer speculation for the jury to conclude that
App. 21
the plaintiff suffered some type of loss as a result of these
libelous statements. There’s absolutely no evidence that
the plaintiff lost business, because the plaintiff is a corpo-
ration here, and that’s a very important consideration in
the case. It is the plaintiff who has brought this suit for
defamation. There is no evidence that the plaintiff lost
business at Blue Cross or at Women & Infants as a result
of the defamation, therefore, there’s no basis for submit-
ting this cause of action to the jury. The jury simply
cannot come back with a verdict for the plaintiff on this
defamation cause of action and, [35] therefore, as I stated
yesterday, I have to grant a directed verdict to the defen-
dants, Local 254 and Coleman, on Counts IV and V. It’s
now called judgment as a matter of law, and that’s what
will be entered, a judgment for those defendants on
Counts IV and V.
Now let’s get to the claim for a 303 violation, illegal
secondary activity. It is clear that this cause of action
implicates two little words, “proximate cause”. That’s
where the horse is buried in this case. The weakness in
plaintiff’s case in this area was evident from the very
beginning. I will assume, for purposes of deciding the
motion on that count, that the plaintiff has made out
enough of a case to go to the jury on whether there were
sufficient threats and coercion exercised by the Local on
Blue Cross and Women & Infants. The question, however,
is whether that illegal secondary activity proximately
caused the plaintiff to lose business.
First, let’s take Blue Cross. The evidence is clear that
plaintiff had a business relationship with Blue Cross
which was an at-will relationship. Blue Cross could ter-
minate it at anytime, as could the plaintiff. There is not
App. 22
one [36] shred of evidence produced at this trial to indi-
cate why Blue Cross elected to put its janitorial contract
out to bid. No one from Blue Cross testified. The Court
and the jury can draw the inference that the failure of the
plaintiff to produce Leite, who was the key man in this
area, and probably made the decision, was because his
testimony would have been of no value to the plaintiff.
The point is that Blue Cross did put all of its janitorial
work out to bid. The plaintiff did bid, and didn’t receive
the bid and didn’t receive the contract. The inference is
that the plaintiff was not the low bidder. In any event,
there’s no evidence from Blue Cross as to why the plain-
tiff was not chosen. The jury should not be allowed to
speculate because it is the plaintiff that has the burden of
proof, and it is the plaintiff's obligation to produce wit-
nesses who will support its cause of action. In this case
the plaintiff has failed to do so.
Therefore, there is no evidence before this jury from
which they could find that the defendant Local's illegal
secondary activity was the proximate cause of the plain-
tiff losing the Blue Cross business.
The same situation obtains with Women & [37]
Infants business. As a matter of fact, it couldn’t be any
more clear that there is a complete lack of proof of
proximate cause in the Women & Infants situation. The
evidence is that there was a picket line thrown up at
Women & Infants by the defendant, but that was over by
early April 1995. It wasn’t until almost 2 years later that
Women & Infants decided to change its janitorial arrange-
ments, but plaintiff didn’t lose out completely. It kept
some of the business. There is absolutely no evidence in
the record as to why Women & Infants did that at that
App. 23
time. It would be sheer speculation for a jury to conclude
that it was because of some picketing that occurred
almost two years before.
Again, it is the plaintiff’s obligation to produce evi-
dence on proximate cause, and plaintiff has utterly failed
to do so in this respect. This is the weakness in plaintiff's
case. It was a weakness that should have been evident
throughout this trial. It was an issue that the Court was
watching very carefully because the Court saw this issue
by reading the pretrial memoranda. The plaintiff has just
failed to prove a case. Maybe there’s some solace in the
fact that there has been some proof that defendant Local
acts in a reckless and unlawful way [38] when it suits its
purposes. But unfortunately for plaintiff, there’s been no
showing that the Local must respond in damages in this
case.
So the motion of the defendant Local for judgment as
a matter of law on Count II is granted. This wraps up this
whole case. The Court has previously granted summary
judgment. So all five counts of the complaint have been
disposed of. Judgment will be entered for the defendants
on all five counts of the complaint.
To recapitulate, all defendants were granted sum-
mary judgment with respect to Counts I, III and VI.
Actually, there were six counts in the complaint.
On Count II, the Court granted summary judgment
to the International, Lima and Coleman, and now grants
the motion for judgment as a matter of law of the Local.
So judgment will be entered for all defendants on Count
II, as well.
App. 24
On Counts IV and V of the amended complaint, the
motions of the International and Lima were granted, and
now the motion for judgment as a matter of law by Local
254 and Coleman are granted. So the clerk can put it in
shorthand form, judgment for all defendants on all six
counts of the amended [39] complaint will be entered.
The clerk will enter that judgment forthwith. The plaintiff
may have an objection to the Court’s ruling for preserva-
tion of its appellate rights. Bring the jury in and I'll
discharge them.
App. 25
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
Intercity Maintenance Co. CA No. 95-630L
Vs.
Local 254, Service Employees Int'l
Union, Victor Lima and Donald
Colement
Judgment
[ ] Jury Verdict. This action came before the Court for a
trial by jury. The issues have been tried and the jury
has rendere
[X] Decision by the Court. This action came to trial or
hearing before the Court. The issues have been tried
or heard an
IT IS ORDERED AND ADJUDGED:
Judgment for the Defendants on all counts of the
Amended Complaint
/s/ Barbara J. D’Amico
Deputy Clerk
April 11, 2000
App. 26
United States District Court,
D. Rhode Island.
INTERCITY MAINTENANCE CO., Plaintiff,
V.
LOCAL 254 SERVICE EMPLOYEES INTERNATIONAL
UNION, Service Employees International Union,
AFL-CIO, Victor Lima, and Donald Coleman,
Defendants.
No. 95-630.
July 29, 1999.
Vincent F. Ragosta, Jr., Matthew Oliverio, Providence,
RI, Christine M. Curley, N. Kingstown, RI, for plaintiff.
Daniel V. McKinnon, McKinnon & Harwood,
Pawtucket, RI, Richard M. Peirce, Roberts, Carroll, Felds-
tein & Peirce, Inc., Providence, RI, Eunice Harris Wash-
ington, Service Employees Int’l Union, AFL-CIO, CLC,
Washington, DC, Steven K. Hoffman, James & Hoffman,
Washington, DC, for defendants.
OPINION AND ORDER
LAGUEUX, Chief Judge.
This litigation embodies the classic struggle between
employer and union. In this labor dispute, like in many
others that escalate to such a dramatic level of contention,
the former is committed to operating on a non-union
basis while the latter is equally devoted to challenging
that employer’s labor policy. Economic philosophies
clashed. An often personal battle of wills ensued, replete
with threats, posturing, and collateral damage. Plaintiff
Intercity Maintenance Co. (“Intercity”) alleges that the
App. 27
union defendants crossed the bounds of acceptable
behavior established by the labor laws that govern orga-
nizing campaigns. Most importantly, Intercity avers dam-
age to its business from improper secondary boycotting
orchestrated by defendants. Plaintiff also presses a vari-
ety of state tort claims, including tortious interference
with its business relationsh:ps, defamation, and violation
of its privacy rights. Plaintiff seeks to hold liable union
actors all along the chain of command, from the Service
Employees International Union, AFL-CIO (“Interna-
tional” or “SEIU”) and Local 254 Service Employees
International Union (“Local 254”) to individual union
officials Victor Lima (“Lima”) and Donald Coleman
(“Coleman”). Defendants counter with a raft of defenses
and move for summary judgment on all counts of the
Amended Complaint. For the reasons stated below,
defendants’ Motions for Summary Judgment are granted
in part and denied in part.
BACKGROUND
On a motion for summary judgment, the Court must
view all evidence and related reasonable inferences in the
light most favorable to the nonmoving party. See Spring-
field Terminal Ry. Co. v. Canadian Pac. Ltd., 133 F.3d 103,
106 (1st Cir.1997). The following factual recital is con-
structed with that instruction in mind.
Intercity, a small corporation based in Cumberland,
Rhode Island, provides janitorial services to commercial
buildings in the Providence, Rhode Island area. Michael
Bouthillette (“Bouthillette”), president of Intercity, hoped
to establish the company as an important provider of
App. 28
janitorial services to the health care sector in Providence.
To this end, Intercity secured work at the Providence
facilities of Women & Infants Hospital (“Women &
Infants”) and Blue Cross/Blue Shield of Rhode Island
(“Blue Cross”). As of late 1994, none of Intercity’s
employees were unionized. Local 254 wished to change
that.
In December 1994, Lima, an employee of Local 254
assigned to the task of organizing janitorial workers in
Providence, telephoned Bouthillette to announce that
Local 254 planned to organize Intercity’s employees
working at the Blue Cross site. Lima requested that Inter-
city voluntarily recognize Local 254 as the workers’ col-
lective bargaining agent. Bouthillette refused the offer
and explained that the decision would have to be made
by the workers themselves. The two parties jousted over
the telephone without resolution for some time. Lima
approached Intercity employees at their Blue Cross job
site and encouraged them to sign union affiliation cards.
Some apparently did so. Bouthillette, learning of this
intrusion into the employees’ work day, ordered Lima to
leave Intercity’s employees alone when they were work-
ing. In January 1995, Lima and Bouthillette agreed to
meet face to face.
At the meeting between Bouthillette and Lima, also
attended by Robert Richard, Bouthillette’s friend, Lima
presented Bouthillette with signed affiliation cards from
Intercity employees working at the Blue Cross site. Lima
insisted that Local 254 was only interested in represent-
ing Intercity’s employees working at that facility, and not
those working at other buildings in the area. According
to Bouthillette, Lima insisted that if Intercity did not
App. 29
comply with Local 254’s request for voluntary recogni-
tion, the union would cause the company to lose the Blue
Cross job, harass people associated with Intercity, and
eventually drive Intercity out of business. Bouthillette
recalls that Lima boasted that the union would use “Lat-
ino terrorist organizations,” ex-convicts, and homeless
people to accomplish its goals. To lend credence to these
threats, Bouthillette maintains, Lima explained that Local
254 had severely damaged the business of another local
janitorial services company, Aid Maintenance, for resist-
ing the union’s efforts to organize. Nonetheless, Bou-
thillettte remained steadfast in his refusal to knuckle
under.
Undeterred, the persistent Lima and Local 254
pressed on with their organizing campaign. Attempts by
Lima to speak to Intercity employees at the Blue Cross
site were rebuffed by Intercity and Blue Cross security.
Local 254 also renewed its efforts to convince Bouthillette
to voluntarily recognize the union. Coleman, the director
of organizing for the local, and Lima, Coleman’s assis-
tant, spoke to the company president on several occasions
in January and February 1995. Unknown to the union
representatives, Bouthillette recorded many of those con-
versations. Bouthillette now presents the transcripts of
those audio recordings as evidence.
During these telephone discussions, Lima and Cole-
man first tried to cajole Bouthillette into coming around
to their position. As Bouthillette stood firm, the two
union officials eventually turned up the heat. During one
conversation, Lima responded to Bouthillette’s continued
defiance with the following threat: “Well, then we’re
going to fight you all the way on this. We’re going to call
App. 30
Blue Cross/Blue Shield and put a picket line up.” Later in
that same conversation, Lima offered the following:
“Well, I’m just going to tell you what’s going to happen
now. I don’t know how long you'll probably stay at Blue
Cross, but I’m going to call them up right after I talk to
you.” Lima soon thereafter made his intentions express:
“I guarantee you, Blue Cross ain’t going to tolerate a
picket line up there because we’ve picketed them in Bos-
ton before and all the other unions. We’re going to put a
nationwide boycott there, you think they’re going to like
that?” Bouthillette inferred a threat of violence from
Lima’s warning that he knew where Bouthillette lived
and from Lima’s boast that Local 254 could rely on the
aid of “terrorists” to achieve their objectives. On Febru-
ary 21, 1995, Bouthillette obtained from Rhode Island
Superior Court a restraining order against Lima and any
agents acting on his behalf.
By early March, Blue Cross officials had become con-
cerned. John Leite (“Leite”), the Director of Facilities
Management for Blue Cross and the official responsible
for selecting janitorial contractors, called Bouthillette to
ask about Intercity’s confrontations with Local 254 at the
Blue Cross facility. Leite ordered Bouthillette to settle the
dispute. Plaintiff alleges that several weeks later Leite
explained to Bouthillette that Intercity would be dis-
missed unless they agreed to the union’s demands.
According to plaintiff, Leite was primarily concerned
with putting a halt to the disruptions within the Blue
Cross facility.
Lima continued to call Bouthillette in March. Bou-
thillette maintains that Lima threatened to put Intercity
out of business unless he complied with the wishes of
App. 31
Local 254. There is also evidence that officials of the
union directly threatened Blue Cross. In an affidavit filed
in support of plaintiff’s cause, Gary St. Peter (“St.Peter”),
a labor relations attorney for Blue Cross, describes a
telephone conversation he had with Coleman on March
28, 1995. St. Peter claims that Coleman identified himself
as an agent of Local 254. Coleman explained that the
union was engaged in an organizing campaign of Inter-
city employees. St. Peter states that Coleman then threat-
ened retaliation. The affidavit explains that Coleman said
“[t]hat if Blue Cross/Blue Shield of Rhode Island did not
pressure Intercity into recognizing Local 254 as the exclu-
sive bargaining representative for Intercity’s employees,
[Local 254] would throw up a picket line at [Blue Cross’s]
premises.” St. Peter contends that he warned Coleman
that such action would constitute prohibited secondary
activity and that Coleman responded that the union
would do it anyway.
Local 254 launched a new tactic against Intercity in
late March 1995. In a March 20, 1995 letter to Bouthillette,
copied to Leite, Coleman declared that “a health emer-
gency exists at Blue Cross Blue Shield and Women and
Infants Hospital.” Coleman alleged that Intercity was in
violation of federal and state health laws by failing to
provide employees with safety books or federally-
approved safety training for handling hazardous sub-
stances. The letter specifically noted that Intercity regu-
larly violated the “Blood Born Pathogen Act in that its
cleaners on a daily basis are being exposed to urine,
excrement and vomit that could contain contaminated
blood.” Coleman asserted that the company had not pro-
vided employees with proper protective clothing and
EL eR te a
App. 32
equipment. The letter concluded by asking a series of
questions mainly related to a work site’s ventilation sys-
tem, though it is unclear from the letter to which site the
questions relate.
That same day, Coleman wrote a letter to Leite
explaining that Intercity had refused his request for infor-
mation. Coleman, stated that “the union has a duty to
protect its members along with the employyes [sic] of
Bluecross [sic] from sickness and hazzards [sic] caused by
chemical contamination.” The letter demanded answers
to the union’s questions immediately.
Plaintiff alleges that the union’s actions damaged its
business relationship with Blue Cross. Intercity entered
into a contract to provide janitorial! services to Blue Cross
in 1990. The one-year pact was renewed by Blue Cross the
next year and each subsequent year until 1995. The par-
ties often dispensed with contract formalities. They never
executed new written agreements, but continued the rela-
tionship according to the terms of the 1990 writing. Each
year Blue Cross sent Intercity a new purchase order for
janitorial services for the upcoming year and Intercity
continued its work without the necessity of bidding or
negotiations. Plaintiff alleges that Blue Cross officials
were thoroughly satisfied with the company’s perfor-
mance.
In the midst of Intercity’s conflict with Local 254 in
the early months of 1995, Bouthillette discussed with
Leite a plan to provide Blue Cross with janitorial services
during its planned construction project, expected to last
for two years. By May, however, Leite’s attitude had
changed. Blue Cross decided to request competing bids
App. 33
on the janitorial services contract, something it had not
done since first hiring Intercity in 1990. Bouthillette testi-
fied at his deposition about a conversation he had with
Leite after learning that the Intercity contract would not
be automatically renewed as had been done in the past,
even though Intercity had not increased its proposed
charges for the next year. Bouthillette claims that Leite
explained that the contract was being bid because of
Intercity’s union troubles. Furthermore, Bouthillette
alleges that Leite expressed an ultimatum: Intercity had a
good chance at winning the contract if it agreed to Local
254’s request, but it had no chance at all if Intercity
continued to snub the union. Still, Bouthillette refused to
negotiate with Local 254.
Blue Cross did not select Intercity for the cleaning
contract. On June 29, 1995, Edward T. Sullivan, Jr., Local
254’s Business Manager, wrote to John J. Sweeney, Presi-
dent of the International, touting Local 254’s achieve-
ments in the region. Sullivan proudly reported “that
Intercity has been expelled at Blue Cross/Blue Shield and
replaced by a Local 254-contracted cleaner.”
The union’s strategy for organizing Intercity was not
limited to pressuring Blue Cross. Plaintift claims that in
late March or early April 1995, Lima spoke to Intercity
employees working at Women & Infants. Beginning at the
end of March, Local 254 picketed Intercity at Woman &
Infants for one week. Picketers distributed handbills to
all who entered the hospital, including employees of
Women & Infants, patients, and other visitors. The leaf-
lets were clearly identified as the work of Local 254, and
at least two of them were styled as letters to the public
from Sullivan.
App. 34
One handbill depicted a large bug encircled and
crossed out by a diagonal line accompanied by the head-
line “Women and Infants TICKS us off.” The leaflet read
as follows:
INTERCITY MAINTENANCE COMPANY is an
infestation that sucks the blood of Latino
workers. Janitors at Women and Infants’ Hospi-
tal are human beings and should not be treated
as animals. INTERCITY has infected its cleaners
as follows:
INTERCITY does not pay a living wage
INTERCITY does not pay Holiday pay
INTERCITY does not pay health insurance
INTERCITY exposes its cleaners to chemical and
biological hazards including HIV and Hepatitis
B virus
WE DEMAND JUSTICE FOR JANITORS!
STOP THE SPREAD OF THE INTERCITY
PLAGUE!!
In another leaflet, Sullivan labeled Intercity “a noto-
rious company.” The handbill continued by claiming that
the cleaning company pays
its workers well below area standards, with lit-
erally no health insurance, paid holidays, vaca-
tion, pension, or job security rights. Intercity has
turned back the clock, infesting your shop with
the kind of sweatshop conditions you and your
Unions fought so hard to exterminate.
The leaflet concluded by explaining that Local
254’s intention here at Women and Infants is to
stop the spread of the Intercity Plague and pro-
tect your workplace from sweatshop infection.
App. 35
We regret that the Hospital’s insensitivity to the
plight of Intercity workers forced us to involve
you in this dispute, but, as you well know,
sometimes dramatic measures are necessary to
gain attention.
A final leaflet, dated April 7, 1995, was distributed
after the hospital “notified Local 254 that Intercity Clean-
ing has no employees working here at Women and
Infants!” At that point, the union ended its picketing and
thanked the hospital’s administration for “exterminating
Intercity and its bloodsucking, plantation-minded boss,
Michael Bouthilette [sic].”
Bouthillette claims that soon before the picketing at
Women & Infants, several people called the Intercity
office and left messages for him, referring to him as a
“bug.” One of the callers is identified by Bouthillette as
Coleman. Bouthillette maintains that at about this same
time, his secretary received a call from Lima who told her
that the union was no longer interested in organizing the
company and that they now aimed only to force Intercity
out of business.
According to plaintiff, Local 254’s actions against the
cleaning company were not isolated incidents. Intercity
urges this Court to view defendants’ behavior in light of
other campaigns to organize workers orchestrated by the
union defendants. In 1993, Local 254 targeted workers of
Aid Maintenance, a janitorial services firm operating in
Rhode Island and southeastern Massachusetts. According
to Coleman, the union picketed Aid Maintenance at the
site of one of the company’s cleaning clients. Coleman
explained at his deposition that the picketing was
designed to protest the wages paid by Aid Maintenance,
App. 36
which the union believed were below the area standard.
Coleman also admitted that the union was intent on
driving the company out of the region if it could not be
organized. The undeveloped record is unclear, however,
whether the picketing constituted improper secondary
activity. Coleman denied that the union pressured the
client to encourage Aid Maintenance to negotiate with
Local 254. Eventually, the cleaning company lost its con-
tract with this client.
Local 254’s efforts to organize janitorial workers in
Rhode Island and Massachusetts were encouraged and
supported by the International. The International devel-
oped a nationwide organizing campaign called “Justice
for Janitors” aimed at unionizing independent contrac-
tors that supply janitorial services. Coleman testified at
his deposition that the International encouraged locals to
create community-wide coalitions, including civic and
religious groups, to spread the word about employers
who paid wages and set work conditions deemed unfair
by the coalition. The purpose of this publicity was to
pressure employers to adopt the union’s standards for
wages and benefits.
The International also subsidized Local 254’s orga-
nizing activities in southeastern Massachusetts. In 1993,
the International infused Local 254 with $10,000 each
month for eight months for organizing projects. This
financial support ended in February 1994. In exchange for
its material assistance, the International required that the
local provide it with summaries of its activities, accom-
plishments, and expenditures. One such three-page
report dated October 22, 1993 sketches in broad strokes
App. 37
the local’s campaign to organize janitorial services con-
tractors in Massachusetts and Rhode Island. While the
report lists picketing and leafleting as activities engaged
in and lists the employment sites targeted, few details
regarding the type, content, or intent of the activities are
provided.
The International also played an important role in
marking the jurisdictional boundaries of Local 254’s
activities. Although Local 254 is based in Boston and
concentrates its efforts on workers in Massachusetts, its
jurisdiction was expanded by the International during the
course of its campaign to organize janitorial workers in
the borderland region of northern Rhode Island and
southeastern Massachusetts. During its 1993 campaign to
organize Aid Maintenance, a Rhode Island-based com-
pany operating in Massachusetts, Local 254 received the
nonexclusive right from the International to organize
building services contractors in Rhode Island. This deci-
sion was issued by the president of the International,
pursuant to the SEIU’s Constitution and Bylaws, which
governs the relationship between the International and
local affiliates.1 A jurisdictional dispute ensued between
Local 254 and Local 134, an SEIU local based in Rhode
Island. The International dispatched a hearing officer to
resolve the conflict. The specifics of the dispute and its
eventual resolution are complicated and largely irrelevant
to this inquiry. What is relevant, however, is that in the
end, the International successfully refereed the tussle and
? Article XIII of the SEIU Constitution and Bylaws provides
that the International Executive Board is empowered to
“determine all questions of jurisdiction between Local Unions.”
App. 38
Local 254 was allowed some rights to operate within
Rhode Island.
Plaintiff has presented no other evidence of involve-
ment by officials of the International in the efforts of
Local 254 to organize Intercity, Aid Maintenance, or any
other janitorial services company in the southern New
England area. Certainly, there is no evidence of direct
participation by officials of the International in the acts
denounced by plaintiff. There is also no evidence in the
record revealing the extent of the International’s knowl-
edge of the methods used by Local 254 to organize Inter-
city or Aid Maintenance. This is not surprising given the
substantial autonomy that locals are granted under the
SEIU’s Constitution and Bylaws. This document gives
locals the power to elect officers, negotiate and execute
collective bargaining agreements, rule on membership
applications, maintain their own financial affairs, and
establish independent rules and regulations. According to
Joseph Buckley, Eastern Regional Director of the SEIU
and the International employee best acquainted with the
organization of SEIU locals in the northeast, Local 254
exercises all of these rights. He also declares in an affi-
davit that no employees of Local 254, including Coleman
and Lima, are authorized agents of the International.
Furthermore, Article XXI of the International’s Constitu-
tion and Bylaws expressly limits the liability of the Inter-
national for the acts of local unions.?
2 The International’s liability is limited by Article XXI of its
Constitution and Bylaws:
Except as is otherwise specifically provided in this
Constitution, no Local Union, or affiliated body, nor
App. 39
Plaintiff, concluding that the behavior of these labor
organizations rises to the level of actionable violations of
Intercity’s legal rights, responded by commencing the
instant lawsuit. The original pleading in this case was
filed in 1995. That complaint alleged several causes of
action grounded in federal labor law and state tort law.
Senior Judge Raymond J. Pettine of this Court presided
over this controversy until 1997, when the case was reas-
signed to this writer. In November 1997, this Court
granted plaintiff’s Motion to Amend by adding three
additional state law counts. The Amended Complaint sets
forth six causes of action, one based on federal labor law
and five based on state law. Plaintiff seeks to hold each
defendant liable on all counts.
Count I alleges that defendants tortiously interfered
with the contractual relationship between plaintiff and
Blue Cross. Count II alleges that defendants violated
§ 303(a) of the Labor Management Relations Act
(“LMRA”), 29 U.S.C. § 187, by engaging in prohibited
secondary activity that harmed plaintiff. Count III alleges
that defendants tortiously interfered with the advan-
tageous business relationship between plaintiff and Blue
Cross. Count IV alleges that defendants defamed plaintiff
to Blue Cross. Count V alleges that defendants defamed
plaintiff to Women & Infants. Count VI alleges that
defendants violated the Rhode Island Privacy Act,
any officer, employee, organizer or representative of a
Local Union or affiliated body or of this International
Union shall be authorized to make contracts or incur
liabilities for or in the name of the International
Union unless authorized in writing [by the
International].
App. 40
R.I.Gen.Laws § 9-1-?8.1, by placing plaintiff’s business
operations in a false light through defendants’ actions at
a Women & Infants facility. The Amended Complaint
demands compensatory and punitive damages, as well as
interest and costs. Subject matter jurisdiction is premised
on the federal question doctrine and the supplemental
jurisdiction provision of 28 U.S.C. § 1367. Before the
Court now are the Motions for Summary Judgment on all
counts filed by all defendants.
DISCUSSION
I. Standard of Review
Rule 56(c) of the Federal Rules of Civil Procedure sets
forth the standard for ruling on a motion for summary
judgment:
The judgment sought shall be rendered forth-
with if the pleadings, depositions, answers to
interrogatories, and admissions on file, together
with the affidavits, if any, show that there is no
genuine issue as to any material fact and that
the moving party is entitled to a judgment as a
matter of law.
Fed.R.Civ.P. 56(c). The critical inquiry is whether a genu-
ine issue of material fact exists. “Material facts are those
‘that might affect the outcome of the suit under the
governing law.’ ” Morrissey v. Boston Five Cents Sav. Bank,
54 F.3d 27, 31 (1st Cir.1995) (quoting Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d
202 (1986)). “A dispute as to a material fact is genuine ‘if
the evidence is such that a reasonable jury could return a
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App. 41
verdict for the nonmoving party.’ ” Id. (quoting Anderson,
477 U.S. at 248, 106 S.Ct. 2505).
On a motion for summary judgment, the Court must
view all evidence and related reasonable inferences in the
light most favorable to the nonmoving party. See Spring-
field Terminal Ry. Co., 133 F.3d at 106. “[W]hen the facts
support plausible but conflicting inferences on a pivotal
issue in the case, the judge may not choose between those
inferences at the summary judgment stage.” Coyne v.
Taber Partners I, 53 F.3d 454, 460 (1st Cir.1995). Similarly,
“[s]ummary judgment is not appropriate merely because
the facts offered by the moving party seem more plaus-
ible, or because the opponent is unlikely to prevail at
_ trial.” Gannon v. Narragansett Elec. Co., 777 F.Supp. 167,
169 (D.R.1.1991).
Il. The Secondary Pressure Claim
A. The Law of Improper Secondary Pressure
The law recognizes that labor disputes often create
friction and unease among the warring parties. Given the
realities of these struggles, much of the consequent strife
is not actionable in a court of law. However, Congress has
delimited the bounds of fair play in such conflicts. The
universal marker of this limit is the “unfair labor prac-
tice.” Although both antagonists in a labor dispute are
restrained by the bit and bridle of the unfair labor prac-
tice rules, in this case the Court is concerned only with
the prohibitions applicable to labor organizations.
Through its landmark Labor Management Relations Act
App. 42
(“LMRA”), 29 U.S.C. §§ 141 et seq., Congress has pro-
scribed that labor organizations may not use certain orga-
nizing tactics deemed too costly to social and economic
peace to achieve even appropriate ends. See id. § 158(b)
(defining unfair labor practices by labor organizations).
Among the tactics prohibited by the federal labor
laws is the application of an unlawful secondary boycott.
The rule is found in § 8(b)(4)(ii)(B) of the LMRA:
It shall be an unfair labor practice for a labor
organization or its agents —
(4) ... (ii) to threaten, coerce, or restrain any
person engaged in commerce or in an industry
affecting commerce, where in either case an
object thereof is -
(B) forcing or requiring any person to cease...
doing business with any other per-
son... Provided, That nothing contained in this
clause (B) shall be construed to make unlawful,
where not otherwise unlawful, any primary
strike or primary picketing.
29 U.S.C. § 158(b)(4)(ii)(B). Underlying this prohibition is
the Congressional intent to balance the resources of the
partisans “by ‘preserving the right of labor organizations
to bring pressure to bear on offending employers in pri-
mary labor disputes and [by] shielding unoffending
employers and others from pressures in controversies not
their own.’ ” Local 20, Teamsters Union v. Morton, 377 U.S.
252, 259, 84 S.Ct. 1253, 12 L.Ed.2d 280 (1964) (quoting
NLRB v. Denver Bldg. & Constr. Trades Council, 341 U.S.
App. 43
675, 692, 71 S.Ct. 943, 95 L.Ed. 1284 (1951)). The real bite
of this provision is found at § 303 of the LMRA, which
provides that “[wJhoever shall be injured in his business
or property by reason of any violation” of the improper
secondary pressure ban “may sue therefor in any district
court of the United States.” 29 U.S.C. § 187(b). Damages
may be recovered if plaintiff is able to prove that they
occurred “by reason of” the improper secondary activity.
See Morton, 377 U.S. at 261, 84 S.Ct. 1253.
To understand the reach of this statutory rule, several
important distinctions must be recognized. The first is
between primary and secondary pressure, for a union
runs afoul of the law only when it engages in the latter.
Theoretically, the distinction is a simple one to draw.
Pressure is primary when its target is the employer with
whom the union has a labor dispute. Pressure is second-
ary when its target is some employer other than the one
engaged in a labor dispute with the union applying the
pressure. To make this distinction, courts inquire into the
“object” of a union’s activity. If “the object of the union’s
conduct, taken as a whole, is to bring indirect pressure on
the primary employer by involving neutral or secondary
employers in the dispute, the conduct is secondary and
prohibited.” Abreen Corp. v. Laborers’ Int'l Union, 709 F.2d
748, 754-55 (1st Cir.1983). A plaintiff need not prove that
the union’s sole or primary object is to employ secondary
pressure, only that one of its objects is the use of second-
ary pressure. See Pye v. Teamsters Local Union No. 122, 61
F.3d 1013, 1023 (1st Cir.1995); see also Abreen Corp., 709
F.2d at 755 (holding that plaintiff must show that the
secondary pressure is not “merely incidental[] to the
pressure imposed on the primary employer”). Intent,
an a RC ern
App. 44
therefore, is the first necessary element of a cause of
action under § 8(b)(4)(ii)(B). See Pye, 61 F.3d at 1021;
Pepsi-Cola Co. v. Rhode Island Carpenters Dist. Council, 962
F.Supp. 266, 273 (D.R.I.1997). Direct evidence of intent, a
rare commodity, is not required, for intent may “logically
be inferred from the nature of the conduct, evaluated in
light of the practical realities of a given situation.” Pye, 61
F.3d at 1022.
The distinction is muddied as the relationship
between employers becomes more complex. Often a criti-
cal determination in resolving a secondary pressure claim
involves the definition of secondary, or neutral,
employers. No bright line rule governs this issue. A court
must apply a totality of the circumstances test. See
National Woodwork Mfrs. Ass'n v. NLRB, 386 U.S. 612, 644,
87 S.Ct. 1250, 18 L.Ed.2d 357 (1967). However, the United
States Court of Appeals for the First Circuit has
announced a useful test for making such determinations.
The key inquiry is “whether there is actual or active
common control sufficient to denote an appreciable inte-
gration of operations and management policies” between
the two employers. John B. Cruz Constr. Co. v. United Bhd.
of Carpenters, Local 33, 907 F.2d 1228, 1231 (1st Cir.1990).3
3 Another potential difficulty in making out a claim for
improper secondary activity occurs when the primary
employer’s work site is also occupied by secondary employers.
In these cases, union activity at the common situs may implicate
the secondary activity prohibition unless the union can
demonstrate that its conduct was purely primary. See Cranshaw
Constr. of New England, L.P. v. International Ass’n of Ironworkers,
Local No. 7, 891 F.Supp. 666, 672 (D.Mass.1995). Courts resort to
the four-factor Moore Dry Dock test, deemed a useful
App. 45
The second major distinction that must concern a
court faced with a secondary boycott claim is the one
between proper and improper secondary activity. It is
well-settled that not all secondary pressure exerted by a
labor organization is prohibited by law. “Unions may
make peaceful appeals for support from the management
of companies dealing with the primary employer.” Abreen
Corp., 709 F.2d at 757. The federal reports are replete with
explanations of the distinction between proper and
improper secondary pressure. See Edward J. DeBartolo
Corp. v. Florida Gulf Coast Bldg. & Constr. Trades Council,
485 U.S. 568, 577-79, 108 S.Ct. 1392, 99 L.Ed.2d 645 (1988)
(holding that prohibited secondary pressure involves
coercion or threats); NLRB v. Servette, Inc., 377 U.S. 46,
93-54, 84 S.Ct. 1098, 12 L.Ed.2d 121 (1964) (same); Abreen
Corp., 709 F.2d at 757 (same); see also BE&K Constr. Co. v.
United Bhd. of Carpenters, 90 F.3d 1318, 1330 (8th Cir.1996)
(“Even if the purpose of the activity is to force an
employer to stop doing business with another, a union
may attempt peacefully to persuade, induce, or encour-
age it to cease the relationship.”). The defining charac-
teristic of improper secondary pressure is coercion. ” ‘[A]
union is free to approach an employer to persuade him to
“evidentiary tool” by the courts, to “aid in the line-drawing
necessary in such cases.” Abreen Corp., 709 F.2d at 755; see
Sailors’ Union of the Pacific (Moore Dry Dock), 92 N.L.R.B. 547
(1950). In the case sub judice, plaintiff’s claims of improper
secondary activity do not arise from union conduct at acommon
situs, although some union picketing in this case did occur at a
Women & Infants facility where both plaintiff and neutral
employers worked.
App. 46
engage in a boycott, so long as it refrains from the speci-
fically prohibited means of coercion through inducement
of employees.’ ” Morton, 377 U.S. at 259, 84 S.Ct. 1253
(quoting Local 1976, United Bhd. of Carpenters v. NLRB, 357
U.S. 93, 99, 78 S.Ct. 1011, 2 L.Ed.2d 1186 (1958)).
Coercion, therefore, is the second necessary element
of a secondary boycott cause of action under
§ 8(b)(4)(ii)(B) of the LMRA. See Pye, 61 F.3d at 1022;
Pepsi-Cola Co., 962 F.Supp. at 273. Courts have declined to
impart a rigid and technical meaning to this term. Coer-
cion, within this context, is a flexible concept, potentially
encompassing many types of conduct. See Pye, 61 F.3d at
1024 (discussing a range of conduct that meets the statu-
tory requirement). Mindful that the First Circuit advised
that the secondary boycott provision is “pragmatic in its
application,” Pye, 61 F.3d at 1024, this Court will allow
common sense to be the guide. Accordingly, there can be
no dispute that picketing, or threatening to picket, a
neutral employer to achieve a result in a labor dispute
with some other employer satisfies the coercion test. See
Pepsi-Cola Co., 962 F.Supp. at 275.
B. Statute of Limitations
Defendants pose as a bar to plaintiff's secondary
boycott count the six-month statute of limitations applied
to § 301 actions by the United States Supreme Court in
DelCostello v. International Brotherhood of Teamsters, 462
U.S. 151, 172, 103 S.Ct. 2281, 76 L.Ed.2d 476 (1983). This
attempt to forestall Intercity’s federal cause of action is
unavailing. The argument for applying the six-month
limit has been rejected by the four circuit courts of
App. 47
appeals who have considered the question. See BE & K
Constr. Co. v. Will & Grundy Counties Bldg. Trades Council,
156 F.3d 756, 763 (7th Cir.1998); Prater v. United Mine
Workers, Dists. 20 & 23, 793 F.2d 1201, 1209-10 (11th
Cir.1986); Carruthers Ready-Mix, Inc. v. Cement Masons
Local Union No. 520, 779 F.2d 320, 327 (6th Cir.1985);
Monarch Long Beach Corp. v. Soft Drink Workers, Loce? 812,
762 F.2d 228, 231 (2d Cir.1985). This Court finds the
reasoning of those decisions persuasive. Therefore, the
applicable statute of limitations for plaintiff’s § 303 action
is “the most closely analogous state limitations period.”
BE & K Constr. Co., 156 F.3d at 763.
Plaintiff commenced this action on December 5, 1995,
less than one year after the occurrence of the key events
in this controversy. The most closely analogous state-law
statute of limitations is that applied to actions for tortious
interference with business relationships. A ten-year lim-
itations period is applicable to such causes of action. See
R.I.Gen.Laws § 9-1-13(a) (1997); McBurney v. Roszkowski,
687 A.2d 447, 449 (R.I.1997) (applying the ten-year limit
to an action for tortious interference with a business
relationship). Clearly, plaintiff’s action falls well within
the requirements of this rule. Therefore, this Court may
address the substance of plaintiff’s claim.
C. Liability of the Individuals
Plaintiff seeks to hold liable both Coleman and Lima
for damages it suffered from defendants’ alleged
improper secondary boycotting. This effort was doomed
from the start. The law on this question could not be
more clear. Civil liability for damages resulting from
App. 48
prohibited secondary pressure is premised upon 29
U.S.C. § 187. The grant of that right of action comes with
an explicit proviso. The right to sue for damages is “sub-
ject to the limitations and provisions of section 185 of this
title.” See 29 U.S.C. § 187(b). Turning to § 185, even a less
than diligent researcher discovers that “[a] money judg-
ment against a labor organization in a district court of the
United States shall be enforceable only against the orga-
nization as an entity and against its assets, and shall not
be enforceable against any individual member or his
assets.” See id. § 185(b). Many courts have explained that
on the basis of that quoted language, § 303 of the LMRA
does not support individual liability. See Prater, 793 F.2d
at 1207; Charles D. Bonanno Linen Serv., Inc. v. McCarthy,
708 F.2d 1, 8 (1st Cir.1983); Cranshaw Constr. of New Eng-
land, L.P., 891 F.Supp. at 673; R.M. Perlman Inc. v. New York
Coat, Suit, Dresses, Rainwear & Allied Workers’ Union Local
89-22-1, 789 F.Supp. 127, 133 (S.D.N.Y.1992); see also Com-
plete Auto Transit, Inc. v. Reis, 451 U.S. 401, 414, 101 S.Ct.
1836, 68 L.Ed.2d 248 (1981) (explaining that in § 185
Congress intended to shield individuals from liability in
LMRA § 301 and § 303 actions). Therefore, the Motions
for Summary Judgment of Coleman and Lima are granted
with respect to Count II of the Amended Complaint.
D. Liability of Local 254
Plaintiff has placed more than enough material facts
in dispute to defeat the motion of Local 254 on the
question of liability for improper secondary activity.
According to the St. Peter affidavit, Coleman threatened
to boycott Blue Cross unless it ceased doing business
with Intercity. There is no dispute that Coleman acted as
App. 49
Local 254’s agent in this matter; he was in charge of the
union’s organizing efforts. There is also no dispute that
Blue Cross was a secondary employer. Defendants have
not argued that Blue Cross is an alter ego of Intercity or
that Blue Cross effectively controlled the cleaning com-
pany.
Plaintiff has adduced sufficient evidence that Local
254 intended to involve Blue Cross in the Intercity labor
dispute by empleying prohibited organizing tactics. The
St. Peter affidavit is itself sufficient to satisfy this element
of the secondary boycott cause of action. When warned
by St. Peter that his threat of picketing Blue Cross consti-
tuted prohibited secondary activity, Coleman brazenly
responded that he didn’t care. But there is more evidence
from which this Court easily can infer an intent to exert
unlawful pressure. During his deposition, Bouthillette
explained that Lima, also an authorized agent of Local
254, told him during a recorded Phone conversation that
Local 254 would contact Blue Cross in order to sabotage
Intercity’s relationship if the cleaning company did not
accede to the union’s wishes. This testimony is bolstered
by the transcriptions of those calls. Bouthillette’s conver-
sation with Lima provides insight into Local 254’s reasons
for calling St. Peter and corroborates St. Peter’s state-
ment. See Abreen Corp., 709 F.2d at 756 (holding that a
union official’s comments may be used to infer the object
of union activity). The evidence presented by plaintiff is
not subtle; it reveals a transparent intention by Local 254
to pressure Blue Cross improperly.
The threat to St. Peter also satisfies the coercion
element of a secondary pressure cause of action. Cole-
man’s promise to picket Blue Cross epitomizes the classic
or
App. 50
description of coercion within the labor law context. See
NLRB v. Denver Bldg. & Constr. Trades Council, 341 U.S.
675, 687, 71 S.Ct. 943, 95 L.Ed. 1284 (1951) (describing the
classic forms of unlawful secondary activity). Plaintiff
alleges that Blue Cross was cowed by these threats of
labor disturbance and eventually choose [sic] to jettison
Intercity rather than endure further troubles from Local
254. Bouthillette has testified that Leite admitted as much
to him when he informed the Intercity president that the
cleaning contract would not be automatically renewed.
Whether there was a causal relationship between Inter-
city’s loss of the Blue Cross contract and the threats of
Local 254 is a matter reserved for the trier of fact. There-
fore, Local 254’s Motion for Summary Judgment with
respect to Count II of the Amended Complaint is denied.
E. Liability of the International
Plaintiff attempts to hoist liability up one more rung
of the union hierarchy. The International, according to the
Amended Complaint, must also answer for Intercity’s
damages resulting from Local 254’s alleged improper sec-
ondary activity. Plaintiff argues that the International
encouraged, ratified, and knowingly tolerated Local 254’s
prohibited behavior. However, the evidence adduced by
plaintiff fails to support this argument.
Liability for a local union’s actions does not attach to
an international affiliate merely because of the hierarchi-
cal link between the two unions. See Carbon Fuel Co. v.
United Mine Workers, 444 U.S. 212, 216-17, 100 S.Ct. 410,
62 L.Ed.2d 394 (1979). Rather, a plaintiff must satisfy the
traditional rules of agency law to saddle an international
App. 51 aa
union with responsibility for acts carried out directly by a
locai in violation of § 303 of the LMRA. See United Mine
Workers v. Gibbs, 383 U.S. 715, 736, 86 S.Ct. 1130, 16
L.Ed.2d 218 (1966) (holding that § 303 liability is estab-
lished according “to ordinary doctrines of agency”); see
also 29 U.S.C. § 185(e). The United States Court of
Appeals for the First Circuit explained that to hold an
international union liable for the improper secondary
activity of a local, a plaintiff must “show that the local
acted as the international’s agent or that the international
independently participated in the unlawful conduct.”
Borowiec v. Local No. 1570, 889 F.2d 23, 26 (1st Cir.1989); see
Abreen Corp., 709 F.2d at 757; see also Cranshaw Constr. of
New England, L.P., 891 F.Supp. at 673 (“To be liable under
§ 303, a union must have instigated, supported, ratified,
or encouraged the complained-of activity. . . . ”).
Plaintiff’s evidence fails completely to establish a
factual link between the specifically alleged acts of sec-
ondary activity and any officer or agent of the Interna-
tional. There is no evidence in the record that any officer
of the International actively participated in the threats
made to Blue Cross. The only direct evidence of conduct
prohibited by § 303 adduced by plaintiff is contained in
St. Peter’s description of Coleman’s telephone threat.
However, St. Peter makes no mention of the International.
Neither Coleman nor Lima, Local 254’s point men for the
Intercity campaign, even hint at participation by the
International. Plainly, Intercity cannot identify a genuine
dispute of material fact regarding actual participation by
the International.
Plaintiff fares no better by relying on theories of
agency law. No evidence in the record establishes an
App. 52
express agency relationship between the International
and Local 254 in organizing matters. In fact, the Interna-
tional’s Constitution and Bylaws explicitly limits the
International's liability to those acts expressly authorized
by the International’s governing body. Furthermore,
according to Buckley, the International’s regional official,
the scheme of decentralized power within the SEIU
grants Local 254 independent authority in matters involv-
ing organizing.
Apparent agency is another fruitless theory pro-
pounded by plaintiff. Turning to bedrock agency law,
“{ajpparent authority is the power to affect the legal
relations of another person by transactions with third
persons, professedly as agent for the other, arising from
and in accordance with the other’s manifestations to such
third persons.” Restatement (Second) of Agency § 8 (1958).
To create such authority “the principle . . . must manifest
to the third party . . . that he or she ‘consents to have the
act done on his [or her] behalf by the person purporting
to act for him [or her].’” Parrillo v. Chalk, 681 A.2d 916,
919 (R.1.1996) (quoting Restatement (Second) of Agency
§ 27). A third party may properly rely on an apparent
authority relationship if that party’s belief in the princi-
pal’s authorization of the agent was reasonable. See Paul
Revere Life Ins. Co. v. Fish, 910 F.Supp. 58, 64 (D.R.1.1996)
(applying Rhode Island law). Plaintiff has failed to iden-
tify any act taken by the International and known to
Intercity or Blue Cross that would lead a reasonable
person to believe that Lima, Coleman, or Local 254 acted
as the International’s agent with respect to organizing
App. 53
matters. Statements made by Lima or Coleman to Bou-
thillette identifying themselves as agents ot the Interna-
tional are insufficient to establish apparent authority. The
agency relationship is created by the manifestations of
the principal, not of the alleged agent. See Parrillo, 681
A.2d at 919.
Nevertheless, piaintiff argues that the International
did act in several ways that created an agency relation-
ship binding on the International. It is unclear from plain-
tiff’s argument whether it advocates that these actions
established an express or an apparent authority relation-
ship. That ambiguity is academic. None of the actions of
the International spotlighted by plaintiff has any legal
significance to the agency analysis.
First, plaintiff notes that the International subsidized
Local 254’s organizing campaign for janitorial workers to
the tune of $10,000 per month for several months. Left
unmentioned by plaintiff, however, is that the subsidy
program ended six months before Local 254 began its
efforts to unionize Intercity. Furthermore, there is no
evidence that any official of Intercity or Blue Cross was
aware of the subsidy before it was unearthed during the
discovery process. Consequently, there could have been
no reliance on the subsidy as a manifestation of an appar-
ent agency relationship.
The subsidy also is not evidence of an express agency
relationship. Although the International requested the
most basic of periodic reports on the use of the funds, the
evidence in the record is clear that the International never
controlled the tactics used by Local 254 or advised the
local on organizing strategy. Plaintiff has failed to adduce
App. 54
any evidence that the International even knew of Local
254’s tactics. An agency relationship may not be con-
structed on the basis of mere “normal union functions”
such as reporting general activities to an affiliate. Gibbs,
383 U.S. at 738, 86 S.Ct. 1130; see Federal Prescription Serv.,
Inc. v. Amalgamated Meat Cutters, 527 F.2d 269, 276-77 (8th
Cir.1975) (involving reporting between a local and an
international union). Therefore, the subsidy is irrelevant
to the question of agency in the Intercity organizing
campaign.
Likewise, the International’s resolution of a jurisdic-
tional dispute between Local 254 and Local 134 has no
bearing on this question. Plaintiff endeavors to show that
in granting Local 254 jurisdiction over Providence-area
cleaners, the International assumed the position of princi-
pal for all of the local’s actions. However, it is well
established in the field of labor law that the exercise of
supervisory powers by an international union in some
matters of jurisdiction and governance is insufficient to
establish a general agency relationship between the inter-
national and a local for all other matters. See Rodonich v.
House Wreckers Union Local 95, 817 F.2d 967, 974 (2d
Cir.1987). The Borowiec Court rejected an argument simi-
lar to the one advanced here by plaintiff. In that case, the
Court held that supervisory control by an international
union over some aspects of a local union’s governance
does not subject the international to liability for the
local’s organizing activity where the local was afforded
significant autonomy in many areas of its operations,
including organizing. See Borowiec, 889 F.2d at 28. In the
= te eee” ae ee
App. 55
case sub judice, Local 254 enjoys autonomy in the con-
duct of its organizing activities according to the undis-
puted testimony of Buckley. Plaintiff’s argument based on
the jurisdictional settlement must fail.
Next, plaintiff clings to a meaningless scrap of evi-
dence for support of a ratification theory. In June 1995,
Sullivan sent a letter to the International’s president
informing him that Intercity had been “expelled” from
Blue Cross. Plaintiff urges this Court to turn the law of
ratification on its head by concluding that a letter from
Local 254 to the International can have the effect of
associating the International to prior acts of Local 254
described in summary fashion in the letter. Clearly, the
letter can reasonably have no such effect. The Supreme
Court has counseled that “it would be inconsistent with
the fabric of national labor policy to infer ratification
from the mere fact that [the international union] involved
itself in the dispute after the violence had occurred.”
Gibbs, 383 U.S. at 738, 86 S.Ct. 1130. Here, plaintiff’s
evidence fails even to demonstrate that the International
“involved itself” after the fact. This Court will not resort
to such an attenuated inference based on the paltry evi-
dence of Sullivan’s letter.
Finally, plaintiff hopes to pin liability on the Interna-
tionai based on a theory of “knowing tolerance.” Accord-
ing to this argument, the International should have
known that Local 254 used improper secondary boycott
tactics when it attempted to organize Aid Maintenance.
Stretching an assumption into a precarious theory of lia-
bility, plaintiff maintains that having done nothing to
dissuade the local from using prohibited tactics after the
Aid Maintenance dispute, the International is responsible
App. 56
for Local 254’s use of those same improper means of
organizing Intercity. This reasoning suffers from several
flaws.
First, no evidence in the record supports the conten-
tion that officials of the International were aware of acts
of illegal secondary activity committed by agents of Local
254 in organizing Aid Maintenance. Plaintiff cannot rely
on a theory of “knowing tolerance” when it has produced
no evidence that officials of the International had knowl-
edge of improper activities committed by Local 254 at any
time. Second, no rule of law required the International to
condemn improper acts committed by a local union with
which it had no agency relationship for organizing mat-
ters. See Gibbs, 383 U.S. at 739, 86 S.Ct. 1130 (“There can
be no rigid requirement that a union affirmatively dis-
avow such unlawful acts as may previously have
occurred.”). For either of these reasons, plaintiff's final
argument for International liability fails. Therefore, the
Motion for Summary Judgment by the International on
Count II of the Amended Complaint is granted.
III. Supplemental Jurisdiction
With the secondary boycott claim against the Interna-
tional and the two individual defendants resolved, no
federal cause of action remains against these three defen-
dants. Because plaintiff has not alleged diversity of the
parties, this Court can only base subject matter jurisdic-
tion over plaintiff’s state law claims against these three
parties under the supplemental jurisdiction provision of
28 U.S.C. § 1367. That statute provides that
App. 57
in any civil action of which the district courts
have original jurisdiction, the district courts
shall have supplemental jurisdiction over all
other claims that are so related to claims in the
action within such original jurisdiction that they
form part of the same case or controversy under
Article III of the United States Constitution.
28 U.S.C. § 1367(a). Supplemental jurisdiction
extends to pendent parties as well as pendent claims. See
id. (“Such supplemental jurisdiction shall include claims
that involve the joinder or intervention of additional par-
ties.”). This Court has power to hear both state and
federal claims if they all would ordinarily be expected to
be tried in one judicial proceeding. See Penobscot Indian
Nation v. Key Bank of Maine, 112 F.3d 538, 563-64 (1st
Cir.1997); Coastal Fuels of Puerto Rico, Inc. v. Caribbean
Petroleum Corp., 79 F.3d 182, 190 (1st Cir.1996). In particu-
lar, “[t]he state and federal claims must derive from a
common nucleus of operative fact.” Gibbs, 383 U.S. at 725,
86 S.Ct. 1130; Rodriguez v. Doral Mortgage Corp., 57 F.3d
1168, 1175 (1st Cir.1995).
However, the exercise of supplemental jurisdiction is
discretionary. See Penobscot, 112 F.3d at 564; Roche v. John
Hancock Mut. Life Ins. Co., 81 F.3d 249, 256-57 (1st
Cir.1996). In determining whether to exercise this discre-
tion, the district court should “ ‘take into account con-
cerns of comity, judicial economy, convenience, fairness,
and the like.’ ” Penobscot, 112 F.3d at 564 (quoting Roche,
81 F3d at 257). The supplemental jurisdiction statute
itself provides four grounds for declining the exercise of
this jurisdiction:
App. 58
(1) the claim raises a novel or complex issue of
State law,
(2) the claim substantially predominates over
the claim or claims over which the district court
has original jurisdiction,
(3) the district court has dismissed aii claims
over which it has original jurisdiction, or
(4) in exceptional circumstances, there are
other compelling reasons for declining jurisdic-
tion.
28 U.S.C. § 1367(c).
This Court can identify no compelling reason to
decline supplemental jurisdiction over the state law
claims advanced by plaintiff. The causes of action
involved, tortious interference, defamation, and false
light, are of the rather ordinary variety. This Court has
considerable experience applying the well-worn rules of
Rhode Island law in these areas. Despite the presence of
these several state law claims, the federal claim of
improper secondary pressure still predominates in this
dispute. The state torts are ancillary to the central contro-
versy regarding the quality and kind of defendants’
unionization struggle with Intercity. Furthermore, given
this Court’s significant investment of time in deciding a
number of preliminary issues in this long-running litiga-
tion, the interests of judicial economy militate in favor of
the exercise of supplemental jurisdiction. Therefore, this
Court will now address the viability of these state law
actions.
App. 59
IV. The Tortious Interference Claims
Two of plaintiff’s state law claims invoke the law of
tortious interference with business relationships. In the
first of these, plaintiff contends that defendants tortiously
interfered with Intercity’s contract to provide janitorial
services to Blue Cross. The second claim is a gloss on the
first. Plaintiff argues that defendants tortiously interfered
with Intercity’s advantageous business relationship with
Blue Cross. The strongest argument raised by defendants
in rebuttal calls into doubt the sufficiency of plaintiff’s
evidence of causation. However, this Court need not test
the merits of this pair of claims because both are pre-
empted by federal labor law.
State law may not encroach upon the system of fed-
eral laws governing labor relations; local laws that
attempt to occupy the same or similar ground as the
national scheme are preempted. See Morton, 377 U.S. at
259-60, 84 S.Ct. 1253. Federal predominance in this area is
necessary to ensure that “the balance of power between
labor and management expressed in our national policy”
is not upset. Id. at 260, 84 S.Ct. 1253. Preemption is
necessary “[w]hen it is clear or may fairly be assumed
that the activities which a State purports to regulate are
protected by § 7 of the National Labor Relations Act, or
constitute an unfair labor practice under § 8.” San Diego
Bldg. Trades Council v. Garmon, 359 U.S. 236, 244, 79 S.Ct.
773, 3 L.Ed.2d 775 (1959). Claims of tortious interference
with contractual relations,4 when based on conduct that is
* The two types of tortious interference alleged by plaintiff
are equivalent causes of action for the Purposes of preemption
analysis. Although Rhode Island law recognizes as independent
App. 60
regulated by the LMRA, are subject to the preemption
doctrine. See BE&K Constr. Co., 90 F.3d at 1330 (preempt-
ing state law tortious interference claim); Ehredt Under-
ground, Inc. v. Commonwealth Edison Co., 90 F.3d 238,
240-41 (7th Cir.1996) (same); Allied Int'l, Inc. v. Interna-
tional Longshoremen’s Ass'n, 640 F.2d 1368, 1381 (1st
Cir.1981) (preempting federal common law claim of tor-
tious interference).
Plaintiff readily acknowledges the authority of this
general rule. However, Intercity urges that its claim fits
within a well-established exception to the federal pre-
emption doctrine carved out by the United States
Supreme Court in its San Diego Building Trades Council
decision. According to the Court, states may “grant com-
pensation for the consequences, as defined by the tradi-
tional law of torts, of conduct marked by violence and
imminent threats to the public order” San Diego Bldg.
Trades Council, 359 U.S. at 247, 79 S.Ct. 773; see Lodge 76,
Int'l Ass'n of Machinists v. Wisconsin Employment Relations
Comm'n, 427 U.S. 132, 136, 96 S.Ct. 2548, 49 L.Ed.2d 396
(1976). Violence alters the federalism balance and trumps
the interests of preemption because of the “compelling
actions claims of tortious interference withcontract and tortious
interference with advantageous business relations, only one
element, irrelevant for preemption purposes, separates the two.
See Mesolella v. City of Providence, 508 A.2d 661, 669-70 (R.I.1986)
(explaining that a plaintiff need not prove the existence of a
contract when the claim is based on interference with a
prospective business relationship); Ed Peters Jewelry Co. v. C & J
Jewelry Co., 51 FSupp.2d 81, 101 (D.R.1.1999) (explaining that
“the legal requirements for establishing these two torts are
identical” except for the difference identified in Mesolella).
App. 61
State interest in the maintenance of domestic peace.”
Gibbs, 383 U.S. at 721, 86 S.Ct. 1130. Furthermore, state
regulation of such activity, outside of the bounds of con-
duct protected by the federal labor laws, does not com-
promise the national scheme of labor relations policy. See
San Diego Bldg. Trades Council, 359 US. at 247, 79 S.Ct.
773. Violent picketing is “[t]he paradigmatic example” of
conduct that may be actionable under State law. Palm
Beach Co. v. Journeymen’s & Prod. Allied Servs., 519 F.Supp.
705, 713 (S.D.N.Y.1981). However, courts have allowed
state law causes of action alleging other types of violent
activity to proceed as well, including claims based on
sabotage and vandalism. See Printpack, Inc. v. Graphic
Communications Union, Local 761-S, 988 F.Supp. 1201, 1204
(S.D.Ind.1997) (involving sabotage); Cranshaw Constr. of
New England, L.P., 891 F.Supp. at 675 (involving vandal-
ism).
This limited exception is inapplicable to plaintiff's
claim because the only threats of violence found within
the record were directed at Bouthillette and were entirely
unrelated to Blue Cross. Plaintiff does not allege that
defendants committed any acts of actual violence.
Instead, plaintiff directs the Court’s attention to com-
ments made by Lima, and by others alleged to be Lima’s
associates, to Bouthillette and to Bouthillette’s secretary.
For instance, one of plaintiff's phone call transcriptions
records Lima warning that he knows where Bouthillette
lives. Bouthillette also testified at his deposition that
Lima boasted about his access to “Latino terrorist organi-
zations” employed to enforce the union’s will. Based on
these and similar allegations, Bouthillette received a
App. 62
restraining order against Lima and others working on
Lima’s behalf.
The problem with plaintiff's argument is apparent.
None of the threats attributed to defendants are in any
way related to Intercity’s relationship with Blue Cross.
There is no evidence that any official of Blue Cross was
ever threatened with violence. Furthermore, there is no
evidence that Blue Cross officials were even aware of the
threats allegedly directed at Bouthillette. Plaintiff may
not escape the impact of the important federal policy of
preemption by alleging threats of violence that are totally
irrelevant to its state cause of action.
The Gibbs Court emphasized the limited nature of the
violence exception. In that case the Court agreed with the
petitioner that “the permissible scope of state remedies in
this area is strictly confined to the direct consequences of
such conduct, and does not include consequences result-
ing from associated peaceful picketing or other union
activity.” Gibbs, 383 U.S. at 729, 86 S.Ct. 1130. Restating its
holding from a previous decision, the Court continued by
stressing the centrality of causation to this preemption
exception. A state law cause of action may proceed only
when there exists “a proximate relation between the vio-
lence and threats of force and violence complained of, on
the one hand, and the [damages] allegedly suffered, on
the other.” Id. at 730, 86 S.Ct. 1130.
Although causation is typically a matter within the
jury’s realm, this Court recently recognized that “a court
may properly intervene” if plaintiff fails entirely to
adduce evidence supporting this vital element. See Ed
Peters Jewelry Co. v. C & J Jewelry Co., 51 F.Supp.2d 81, 101
App. 63
(D.R.1.1999) (citing Russo v. Baxter Healthcare Corp., 140
F.3d 6, 12 (1st Cir.1998)). No evidence within the record
would permit any finder of fact to conclude that the
threats alleged by plaintiff caused Blue Cross to end its
business relationship with Intercity. The only evidence of
violence adduced by plaintiff is irrelevant to these two
tort counts. Consequently, the two state causes of action
for tortious interference do not fit within the narrow
confines of the violence exception to the general preemp-
tion rule. Therefore, the preemption doctrine applies to
both counts. Defendants’ motions as to Counts I and III
are granted.
V. The Defamation Claims
A. Defamation Law in the Labor Context
Counts IV and V of the Amended Complaint allege
that defendants defamed Intercity through various com-
munications with Blue Cross and Women & Infants.
Plaintiff contends that statements made by defendants to
Blue Cross “implied that Intercity conducted its business
in an unlawful and unsanitary manner endangering Blue
Cross and its patrons and employees.” Amended Com-
plaint J 58. Similarly, the pleading argues that statements
made to patrons and employees of Women & Infants also
implied that Intercity “conducted its business in an
unlawful and unsanitary manner, spreading infectious
diseases endangering Women and Infants and its patrons
and employees.” Amended Complaint J 64. The offend-
ing statements, discussed in detail above, were contained
in two letters penned by Coleman and sent to a Blue
Cross official and three handbills created by Local 254
App. 64
and distributed to the public near a Women & Infants
facility.
To avoid defamation liability, defendants first seek
the shelter of the preemption doctrine. This effort is
futile. In Linn v. United Plant Guard Workers, 383 U.S. 53,
86 S.Ct. 657, 15 L.Ed.2d 582 (1966), the United States
Supreme Court held that a state law defamation action is
not preempted by the LMRA “provided it is limited to
redressing libel issued with knowledge of its falsity, or
with reckless disregard of whether it was true or false.”
Id. at 61, 86 S.Ct. 657. Federal preemption in such cases is
inappropriate because of the “overriding state interest in
protecting . . . residents from malicious libels.” Id. The
key to this particular species of preemption analysis is
malice. Causes of action based on state law are pre-
empted to the extent to which they seek to make action-
able defamatory statements that were made without
malice. See Old Dominion Branch No. 496, Nat'l Ass'n of
Letter Carriers v. Austin, 418 U.S. 264, 272-73, 94 S.Ct. 2770,
41 L.Ed.2d 745 (1974).
The malice rule imposed by Linn reflects the Supreme
Court's desire to preserve the special status of free speech
rights under federal labor law. See Old Dominion, 418 U.S.
at 272, 94 S.Ct. 2770. Concern for “unwarranted intrusion
upon free discussion envisioned by the” labor laws led
the Court to fashion limits on the reach of state defama-
tion actions. Linn, 383 U.S. at 65, 86 S.Ct. 657. The Linn
Court explained that “[l]abor disputes are ordinarily
heated affairs; the language that is commonplace there
might well be deemed actionable per se in some state
jurisdictions.” Id. at 58, 86 S.Ct. 657. In contrast to such
App. 65
state laws, federal labor law “tolerates intemperate, abu-
sive and inaccurate statements made by the union during
attempts to organize employees.” Id. at 61, 86 S.Ct. 657.
But the line is drawn at malicious defamation. Therefore,
to serve both the objectives of federal labor law and state
anti-defamation law, the Court imported into the labor
context the standards for defamation actions involving
public figures enunciated by the Court in New York Times
Co. v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686
(1964).
The Sullivan standard requires that a plaintiff prove
that a publication was made “with knowledge that it was
false or with reckless disregard of whether it was false or
not.” Sullivan, 376 U.S. at 280, 84 S.Ct. 710; see Old Domin-
ion, 418 U.S. at 281, 94 S.Ct. 2770 (applying the Sullivan
test to a labor dispute). This is the definition of malice
applicable in the case sub judice. Whether defendants
harbor any ill will or spite toward plaintiff is irrelevant to
this analysis. See Old Dominion, 418 US. at 281, 94 S.Ct.
2770.
Given the special role of the federal government in
promoting national labor policy, the Supreme Court has
attempted to provide the lower courts with some guid-
ance in determining whether certain specific statements
are protected from state condemnation when made in the
heat of a labor dispute. Much of the hyperbolic language
typical of bitter struggles between zealous organizers and
defiant managers is protected by federal law. Language
that might ordinarily offend the civility of polite com-
pany is tolerated and absolutely protected by law within
the labor context. “[Flederal law gives a union license to
use intemperate, abusive, or insulting language without
App. 66
fear of restraint or penalty if it believes such rhetoric to
be an effective means to make its point.” Old Dominion,
418 U.S. at 283, 94 S.Ct. 2770. Even the “most repulsive
speech enjoys immunity” if its speaker passes the malice
test. Linn, 383 U.S. at 63, 86 S.Ct. 657. For example, the
Court has protected union defendants from liability for
using terms such as “scab,” even when the word was
defined in the publication as a person with “rotten princi-
ples” who lacks “character” and for whom “Angels weep
in Heaven, and the Devil shuts the gates of hell to keep
him out.” See Old Dominion, 418 U.S. at 268, 283-84, 94
S.Ct. 2770 (quoting union literature attributed to the
author Jack London).
The shield of federal immunity extends even beyond
instances of abusive language and name calling to “loose
language” and exaggerated use of slogans. Id. at 284, 94
S.Ct. 2770. For example, labeling a union opponent a
“traitor” or “fascist” is generally a protected act. See id.
Even though a defendant cannot prove that its target fits
the legal or common definitions of these words, the state-
ments are not actionable because they are properly
understood as expressions of opinion and not of fact. See
id. “[T]o use loose language or undefined slogans that are
part of the conventional give-and-take in our economic
and political controversies —- like ‘unfair’ or ‘fascist’ — is
not to falsify facts.” Cafeteria Employees Union Local 302 v.
Angelos, 320 U.S. 293, 295, 64 S.Ct. 126, 88 L.Ed. 58 (1943).
Many of the statements made by defendants that
form the basis of plaintiff’s grievance fall well within the
immunized category of “rhetorical hyperbole.” They are
simply “lusty and imaginative expression[s] of the con-
tempt felt by union members” towards a stubborn owner.
App. 67
Old Dominion, 418 U.S. at 286, 94 S.Ct. 2770. So protected
are the references in the handbills distributed at the
Women & Infants facility to “bloodsucking, plantation-
minded boss,” “notorious company,” “the Intercity
plague,” the Intercity “infestation,” and Intercity’s
“sweatshop conditions.” Also protected as a matter of
opinion is the statement in the March 20, 1995 letter to
Bouthillette and Leite that “a health emergency exists” at
both Blue Cross and Women & Infants based on Inter-
city’s lax procedures in handling hazardous materials.
This statement might refer to any number of conditions at
the work site and is not a matter that can be proved or
disproved by resort to objective data.
More problematic for defendants are specific state-
ments made in the first letter sent on March 20, 1995 and
in two of the handbills distributed at Women & Infants.
These remaining statements can be divided into two cate-
gories: one set relates to wages and benefits provided
Intercity employees and the other relates to the health
and safety conditions under which Intercity employees
work.
With regard to the statements in the first group, there
are some triable issues of fact that this Court is unable to
resolve at this stage of the litigation. Although the state-
ment that Intercity does not pay a “living wage” is a
protected matter of opinion, the statement that the com-
pany pays its employees “well below area standards” is
an assertion of fact that can be verified by objective data.
Bouthillette contends that Intercity paid its employees
above area standards. Coleman testified at his deposition
that the statement was based on his assumption that
Intercity employees working at Women & Infants were
App. 68
paid comparably to those working at Blue Cross. How-
ever, he admits that little, if any, investigation was con-
ducted prior to publishing the statements. The relevant
portions of Coleman’s deposition testimony follow:
Q.: At the time that you prepared and distrib-
uted this handbill, you did not have that infor-
mation as to what Intercity was paying its
janitorial workers assigned to Women and
Infants?
A.: That's correct. I hadn’t talked to the people
- there.
Q.: And so, you published and prepared this
document in disregard as to what the actual
facts were with respect to Intercity’s employees
A.: Well, I published -
Q.: - assigned to Women and Infants?
A.: Well, I published it in regards to whatever
information was available to me that I could put
in it.
Q.: But you didn’t have any information about
what the compensation and benefits were of
Women and Infants employees — of strike — at
the time you prepared Plaintiff’s 12, you just
told us that you didn’t have any information
about the terms and conditions of employment
of Intercity’s workers assigned to Women and
Infants?
App. 69
A.: Well, I made an assumption that they were
probably paid similarly as they were paid at
Blue Cross.
Q.: And that assumption was not based on
facts?
A.: It was an assumption. That’s correct.
A genuine dispute as to the truth of these statements
regarding wages exists. The evidence regarding holiday
pay, vacation time, health insurance, and job security
rights is similarly disputed. These conflicts in the record
over material facts cannot be resolved on the motions
before the Court. Furthermore, even if proved to be false,
the question of malice is too close a call for this Court to
make now given Coleman’s shaky testimony about his
efforts to investigate the facts.
In the second group of actionable statements are
allegations concerning the adequacy of Intercity’s safety
program. By declaring Intercity in violation of federal
and state laws, Local 254 left behind the realm of opinion
and assumed the position of a reporter of fact. Statements
intended to be factual representations of Intercity’s health
and safety record were contained in both the letters to
Leite and in one of the handbills. The first letter from
Coleman, copied to Leite, made the following factual
assertions regarding Intercity’s employment practices at
the Blue Cross site: 1) Intercity was in violation of both
federal and state laws by failing to provide safety man-
uals and approved training to its employees, 2) Intercity
was in violation of the Blood Born Pathogen Act by
App. 70
exposing its workers to hazardous human waste, 3) Inter-
city failed to provide its employees with appropriate
safety equipment and clothing. One of the handbills also
contains the factual representation that Intercity exposes
its workers at the Women & Infants site to “chemical and
biological hazards including HIV and Hepatitis B virus.”
In an affidavit, Bouthillette denies that Intercity was ever
in violation of federal or state law and asserts that the
company provided its employees with appropriate train-
ing and equipment. Therefore, there is a triable issue of
material fact with respect to the falsity of these state-
ments.
There is also some evidence that these statements
were made with malice. According to his deposition testi-
mony, before writing the letters to Leite, Coleman never
actually investigated the working conditions of Intercity
employees at the Women & Infants site. To the contrary,
he substituted assumption for actual observation. Cole-
man assumed that conditions at Women & Infants were
equivalent to those at Blue Cross. Compounding the
problem, Coleman’s testimony raises a serious question
regarding the extent of his investigation into working
conditions at Blue Cross, the very conditions that under-
lie his assumptions about the Women & Infants site. The
relevant portion of his deposition follows:
Q.: In Plaintiff’s Exhibit 12, you state Intercity
exposes its cleaners to chemical and biological
hazards, including HIV and Hepatitis B virus?
A.: Yes, I did.
Q.: Upon what information did you base that
statement?
_—
App. 71
A.: Based on the fact that he doesn’t provide
rubber gloves to his cleaners.
Q.: How do you know that at the time you
wrote this? :
A.: From my observations as to his practices at
Blue Cross.
Q.: But at the time you didn’t locate or secure
any of Intercity’s workers at Women and
Infants?
A.: That’s correct. Yes, it was an assumption.
Q.: And the assumption that you made was
not based upon facts?
A.: It is, yeah, you could say that.
Q.: And it was not made based upon an inves-
tigation?
A.: Well -
Q.: - of Intercity workers at Blue Cross?
A.: As best I could investigate.
Q.: And the investigation was never con-
cluded?
A.: No. I didn’t actually - wasn’t able to locate
the people.
Q.: And despite that, you made all of the state-
ments set forth -
A.: Yes.
Q.: - in Exhibit 12?
App. 72
A.: Yes.
Based on this evidence, plaintiff has demonstrated
that a genuine dispute of material fact exists regarding
Coleman’s malicious intent in making these statements.
B. Liability for the Defamation Claims
Liability for these alleged defamations does not
extend to all of the defendants named in plaintiff’s law-
suit. Clearly, Coleman is responsible for the statements in
his letter of March 20, 1995 alleging safety violations by
Intercity. Local 254 is liable as a principal for the state-
ments made by Sullivan and Coleman regarding Intercity
wages and benefits as well as safety violations. However,
there is no evidence in the record linking any of the
actionable statements to Lima. Therefore, of these three
defendants, only Lima is entitled to summary judgment
on Counts IV and V.
The liability of the International deserves a special, if
brief, discussion. The standard of proof for imposing
liability on an international union for the acts of a local
affiliate that may violate state law is more demanding
than the traditional rule of civil liability. Under § 6 of the
Norris-LaGuardia Act:
No officer or member of any association or
organization . . . participating or interested in a
labor dispute, shall be held responsible or liable
in any court of the United States for the unlaw-
ful acts of individual officers, members, or
agents, except upon clear proof of actual partici-
pation in, or actual authorization of, such acts,
App. 73
or of ratification of such acts after actual knowl-
edge thereof.
29 U.S.C. § 106. Although the normal rules of agency
law apply to determine the liability of a union for acts of
secondary boycotting by affiliate unions, the special stan-
dard of § 6 applies to state law actions such as the
defamation claims before the Court. See Gibbs, 383 U.S. at
736, 86 S.Ct. 1130 (explaining the application of the differ-
ent standards of liability for § 303 actions and state law
actions). The “clear proof” rule is a “higher” standard for
imposing liability than that provided by traditional
agency law. Johnson v. Teamsters Local 559, 102 F.3d 21, 27
(1st Cir.1996). The Gibbs Court explained that in order to
satisfy this heightened standard, a plaintiff “is required
to persuade by a substantial margin, to come forward
with ‘more than a bare preponderance of the evidence to
prevail.’” Gibbs, 383 U.S. at 737, 86 S.Ct. 1130 (quoting
Schneiderman v. United States, 320 U.S. 118, 125, 63 S.Ct.
1333, 87 L.Ed. 1796 (1943)).
Given this exacting standard and this Court’s pre-
vious discussion of the lack of evidence associating the
International to any of the acts of Local 254, plaintiff
cannot maintain causes of action for defamation against
the International. To link the International to the state-
ments at issue, plaintiff relies on the same evidence that
this Court deemed inadequate to hold the International
liable under § 303. Plaintiff identifies no additional evi-
dence supporting liability of the International. Therefore,
even under traditional agency principles, plaintiff cannot
establish the liability of the International, to say nothing
of the problems facing plaintiff under the clear proof
App. 74
standard. The International’s Motion for Summary Judg-
ment as to Counts IV and V is granted.
VI. The False Light Claim
Plaintiff further seeks to hold defendants liable under
the Rhode Island Privacy Act, R.I.Gen.Laws § 9-1-28.1, for
publicly portraying Intercity in a false light. The Rhode
Island statute allows a false light action when “[t]here has
been some publication of a false or fictitious fact which
implies an association which does not exist” and when
“{t]he association which has been published or implied
would be objectionable to the ordinary reasonable man
under the circumstances.” R.I].Gen.Laws § 9-1-28.1(a)(4)(i).
The Rhode Island legislature borrowed the Privacy
Act’s scheme of four privacy torts, including the tort of
false light, from the doctrine of privacy torts promulgated
by the Restatement (Second) of Torts. See Liu v. Striuli, 36
F.Supp.2d 452, 479 (D.R.I.1999); Restatement (Second) of
Torts §§ 652B-E (establishing the four privacy torts).
Accordingly, Rhode Island courts have often turned to
the Restatement as an authority on the matter of privacy
torts. See Swerdlick v. Koch, 721 A.2d 849, 861-62 (R.I.1998);
Pontbriand v. Sundlun, 699 A.2d 856, 863 (R.1.1997). The
Restatement defines the scope of the right to privacy:
“Except for the appropriation of one’s name or likeness,
an action for invasion of privacy can be maintained only
by a living individual whose privacy is invaded.” Restate-
ment (Second) of Torts § 6521. Under this rule of tort law, a
corporation does not enjoy privacy rights. See id. cmt. c.
“It has therefore no cause of action for any of the four
forms of invasion covered by §§ 652B to 652E.” Id.; see id.
App. 75
§ 652E (false light tort). Given the respect with which the
Rhode Island state courts accord the Restatement on mat-
ters of privacy law otherwise unresolved by state law,
this Court has no qualms in concluding that the Rhode
Island courts would adopt the Restatement’s rule on cor-
porate privacy. Therefore, Count VI of the Amended
Complaint fails as a matter of law.
VI. Punitive Damages
Finally, this Court will address defendants’ argument
that plaintiff may not recover punitive damages in this
lawsuit. The only causes of action remaining are those for
improper secondary activity under 29 U.S.C. § 187 and
for defamation under Rhode Island common law. Plaintiff
may not recover punitive damages on its claim of unlaw-
ful secondary activity. See International Bhd. of Elec.
Workers v. Foust, 442 U.S. 42, 52, 99 S.Ct. 2121, 60 L.Ed.2d
698 (1979); Morton, 377 U.S. at 260-61, 84 S.Ct. 1253;
Amoco Oil Co. v. Local 99, Int'l Bhd. of Elec. Workers, 536
FSupp. 1203, 1224 (D.R.I.1982). As the LMRA makes
clear, plaintiff’s recovery for unlawful secondary pressure
is limited to compensatory damages. See 29 U.S.C.
§ 187(b) (“Whoever shall be injured in his business or
property . . . shall recover the damages by him sus-
tained. . . . ”); Morton, 377 U.S. at 260, 84 S.Ct. 1253
(holding that recovery is limited “to actual, compensatory
damages”). Accordingly, defendants’ Motions for Sum-
mary Judgement with respect to the punitive damages
claims contained in Count II of the Amended Complaint
are granted.
App. 76
However, punitive damages are available for the def-
amation claims. As this Court discussed above, federal
labor law does not preempt this state law cause of action.
Under Rhode Island law, punitive damages may be recov-
ered in defamation suits. See Johnson v. Johnson, 654 A.2d
1212, 1217 (R.1.1995). Such exemplary damages must be
based on a finding of malice or bad faith. See Palmisano v.
Toth, 624 A.2d 314, 318 (R.1.1993). This Court had occasion
recently to address the standard for an award of punitive
damages under Rhode Island law in Ross-Simons of War-
wick, Inc. v. Baccarat, Inc., 182 F.R.D. 386, 400 (D.R.1.1998).
In that decision, this Court explained that “[t]he Rhode
Island Supreme Court has discussed with approval this
Court’s formulation of the test: the plaintiff must allege
that the defendant intended to cause harm.” Id.
Given the evidence currently in the record, this Court
can only conclude that a dispute of material fact exists
regarding the “willfullness, recklessness or wickedness”
of the defendants in making the offending statements.
Sherman v. McDermott, 114 R.I. 107, 329 A.2d 195, 196
(1974). There is some evidence that Local 254, Lima, and
Coleman wished to drive Intercity out of business. If the
offending statements were made to damage plaintiff for
the sake of causing it harm, then plaintiff may recover
exemplary damages. Such a determination, necessarily
entangled in questions of credibility and motivation, is
not an appropriate matter for summary judgment dispo-
sition given the varying accounts of the circumstances
surrounding this dispute. Defendants’ Motions for Sum-
mary Judgment with respect to the requests for punitive
damages within Counts IV and V of the Amended Com-
plaint are denied.
-
App. 77
CONCLUSION
For the foregoing reasons, defendants’ Motions for
Summary Judgment are granted in part and denied in
part. The Motions of all defendants are granted with
respect to Counts I, III, and VI of the Amended Com-
piaint. On Count II of the Amended Complaint, the
Motions of the International, Lima, and Coleman are
granted and the Motion of Local 254 is denied. On Counts
IV and V of the Amended Complaint, the Motions of the
International and Lima are granted and the Motions of
Local 254 and Coleman are denied. Finally, plaintiff's
claim for punitive damages contained in Count II of the
Amended Complaint is dismissed. No judgments shall
enter until all claims are resolved.
It is so ordered.
App. 78
29 U.S.C. § 158
§ 158. Unfair labor practices
(a) Unfair labor practices by employer
It shall be an unfair labor practice for an employer -
(1) to interfere with, restrain, or coerce employees
in the exercise of the rights guaranteed in section 157 of
this title;
(2) to dominate or interfere with the formation or
administration of any labor organization or contribute
financial or other support to it: Provided, That subject to
rules and regulations made and published by the Board
pursuant to section 156 of this title, an employer shall not
be prohibited from permitting employees to confer with
him during working hours without loss of time or pay;
(3) by discrimination in regard to hire or tenure of
employment or any term or condition of employment to
encourage or discourage membership in any labor orga-
nization: Provided, That nothing in this subchapter, or in
any other statute of the United States, shall preclude an
employer from making an agreement with a labor organi-
zation (not established, maintained, or assisted by any
action defined in this subsection as an unfair labor prac-
tice) to require as a condition of employment membership
therein on or after the thirtieth day following the begin-
ning of such employment or the effective date of such
agreement, whichever is the later, (i) if such labor organi-
zation is the representative of the employees as provided
in section 159(a) of this title, in the appropriate collective-
bargaining unit covered by such agreement when made,
and (ii) unless following an election held as provided in
App. 79
section 159(e) of this title within one year preceding the
effective date of such agreement, the Board shall have
certified that at least a majority of the employees eligible
to vote in such election have voted to rescind the author-
ity of such labor organization to make such an agreement:
Provided further, That no employer shall justify any dis-
crimination against an employee for nonmembership in a
labor organization (A) if he has reasonable grounds for
believing that such membership was not available to the
employee on the same terms and conditions generally
applicable to other members, or (B) if he has reasonable
grounds for believing that membership was denied or
terminated for reasons other than the failure of the
employee to tender the periodic dues and the initiation
fees uniformly required as a condition of acquiring or
retaining membership;
(4) to discharge or otherwise discriminate against
an employee because he has filed charges or given testi-
mony under this subchapter;
(5) to refuse to bargain collectively with the repre-
sentatives of his employees, subject to the provisions of ©
section 159(a) of this title.
(b) Unfair labor practices by labor organization
It shall be an unfair labor practice for a labor organi-
zation or its agents -
(1) to restrain or coerce (A) employees in the exer-
cise of the rights guaranteed in section 157 of this title:
Provided, That this paragraph shall not impair the right
of a labor organization to prescribe its own rules with
respect to the acquisition or retention of membership
App. 80
therein; or (B) an employer in the selection of his repre-
sentatives for the purposes of collective bargaining or the
adjustment of grievances;
(2) to cause or attempt to cause an employer to
discriminate against an employee in violation of subsec-
tion (a)(3) of this section or to discriminate against an
employee with respect to whom membership in such
organization has been denied or terminated on some
ground other than his failure to tender the periodic dues
and the initiation fees uniformly required as a condition
of acquiring or retaining membership;
(3) to refuse to bargain collectively with an
employer, provided it is the representative of his
employees subject to the provisions of section 159(a) of
this title;
(4)(i) to engage in, or to induce or encourage any
individual employed by any person engaged in com-
merce or in an industry affecting commerce to engage in,
a strike or a refusal in the course of his employment to
use, manufacture, process, transport, or otherwise handle
or work on any goods, articles, materials, or commodities
or to perform any services; or (ii) to threaten, coerce, or
restrain any person engaged in commerce or in an indus-
try affecting commerce, where in either case an object
thereof is -
(A) forcing or requiring any employer or self-
employed person to join any labor or employer organiza-
tion or to enter into any agreement which is prohibited by
subsection (e) of this section;
App. 81
(B) forcing or requiring any person to cease using,
selling, handling, transporting, or otherwise dealing in
the products of any other producer, processor, or manu-
facturer, or to cease doing business with any other per-
son, or forcing or requiring any other employer to
recognize or bargain with a labor organization as the
representative of his employees unless such labor organi-
zation has been certified as the representative of such
employees under the provisions of section 159 of this
title: Provided, That nothing contained in this clause (B)
shall be construed to make unlawful, where not other-
wise unlawful, any primary strike or primary picketing;
(C) forcing or requiring any employer to recognize
or bargain with a particular labor organization as the
representative of his employees if another labor organiza-
tion has been certified as the representative of such
employees under the provisions of section 159 of this
title;
(D) forcing or requiring any employer to assign par-
ticular work to empl
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