Day on Torts - New Post: Dismissal of libel and false light invasion of privacy claims affirmed.

 

Dismissal of claims of defamation and false light invasion of privacy by the former CEO of a credit union was affirmed where the email she cited “was not capable of conveying a defamatory meaning” and could not “be considered highly offensive to a reasonable person;” the statement she cited was “not capable of conveying a defamatory meaning” and was not sufficiently publicized; and the audit report she cited was not given the requisite publicity.

In Tidwell v. Holston Methodist Federal Credit Union, No. E2019-01111-COA-R3-CV (Tenn. Ct. App. June 25, 2020), plaintiff had been the CEO of defendant credit union and was fired after an audit by a regulatory agency. Several issues were identified by the audit, and plaintiff claimed “she became the scapegoat for these problems.” Plaintiff brought suit against the credit union, the chairman of the Board of Directors, the chairman of the Supervisory Committee, and an independent auditor for libel, false light invasion of privacy, and retaliatory discharge.

The trial court granted defendants’ motion to dismiss all claims. Plaintiff appealed, the Court of Appeals affirmed dismissal.

After affirming dismissal of plaintiff’s retaliatory discharge claim based on the fact that plaintiff did not report her employer’s alleged wrongful behavior to anyone other than two of the defendants in this suit, the Court turned to plaintiff’s defamation/libel and false light invasion of privacy claims. A plaintiff alleging libel must show that “1) a party published a statement; 2) with knowledge that the statement is false and defaming to the other; or 3) with reckless disregard for the truth of the statement or with negligence in failing to ascertain the truth of the statement,” and the statement “must constitute a serious threat to the plaintiff’s reputation.” (internal citations omitted).  A plaintiff claiming false light must show that the defendant gave “publicity to a matter concerning another that places the other before the public in a false light” and that the “false light…would be highly offensive to a reasonable person, and the actor had knowledge of or acted in reckless disregard as to the falsity of the publicized matter and the false light in which the other would be placed.” (internal citations omitted).

Plaintiff identified three allegedly tortious communications—an email announcing her departure, a statement made at a meeting by the chairman of the Board of Directors, and an audit report submitted by the independent auditor to the credit union. The Court analyzed each of these communications individually.

The email in question was sent to credit union members and stated in part: “For over 62 years our members have put their trust in our staff, including the leadership provided by our Board of Directors and our management team, to serve their financial needs. Today, [we] would like to continue to earn that trust be announcing the departure of Janet Tidwell as CEO.” Based on this wording, the Court held that “the email is not capable of conveying a defamatory meaning.” The Court noted that the email did not say plaintiff was terminated and that the statements contained were “factually true.” Because “the words of the email [were] not reasonably construable as holding Plaintiff up to public hatred, contempt, or ridicule,” the Court affirmed dismissal of the libel claim based on the email. (internal citation omitted).

Regarding false light, the court found that plaintiff had sufficiently pleaded publication, but that “the statements in the email announcement cannot be considered highly offensive to a reasonable person.” (internal citation omitted). Although plaintiff asserted that one defendant knew that the wording used in the email was the same as the wording used by another credit union to announce the termination of an executive who had stolen millions of dollars, the Court pointed out that recipients of this email would have no reason to know of the language similarities and that the email was “not susceptible to inferences that would cast Plaintiff in a false light.” (internal citation omitted). As to that specific defendant, the Court held that she, as the independent auditor, has not given publicity to the email announcement. The email could thus not support a false light claim.

The Court next moved to a statement made by defendant Board Chairman at a meeting. Plaintiff alleged that the chairman falsely stated that income was negative for 2017 with the intention of “cast[ing] the Plaintiff in a false light.” The Court found, however, that this statement was “not capable of conveying a defamatory meaning,” as it was made three months after plaintiff left her position and plaintiff did not allege that the statement connected her to the negative income. Further, because the statement was made at a board meeting, the Court ruled that it did not meet the “publication” element of either libel or false light invasion of privacy. Tennessee law states that “communication among agents of the same corporation made within the scope and course of their employment relative to duties performed for that corporation are not to be considered as statements communicated or publicized to third persons.” (internal citation omitted). Because the statement at issue fit this criteria, it could not support a claim of defamation or false light invasion of privacy.

Finally, the Court considered the audit report prepared by defendant independent auditor, which plaintiff alleged reported false findings that were the basis of her termination. The Court first noted that members of the credit union, the Board of Directors, and Supervisory Committee members had the right to know what was in the audit report, and thus communication of the report to those people did not constitute the requisite publication. Further, plaintiff’s allegations of further publication were vague and failed to identify to whom the information was given, so the Court held that “these bare allegations do not state a claim of libel or false light invasion of privacy against the credit union.” The Court further noted that plaintiff had not made any specific allegations regarding publication by the individual defendants she had named.

Because none of the communications cited by plaintiff could support a claim of either libel or false light invasion of privacy, dismissal was affirmed.

NOTE: This opinion was published less than a month after oral arguments in this case.